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Cherokee to expand health facilities

The planned long-term care campus would feature stunning views and allow residents easy access to the hospital next door. EBCI rendering The planned long-term care campus would feature stunning views and allow residents easy access to the hospital next door. EBCI rendering

The Cherokee Tribal Council approved more than $110 million for new health facilities on the Qualla Boundary and in Cherokee County, giving unanimous endorsement to two separate projects during its Aug. 5 meeting. 

The largest project, the first phase of a long-term care facility to be constructed on land adjacent to the Cherokee Indian Hospital, is expected to start construction in March with an opening date planned for early 2025. 

Of the estimated $105 million cost, site work covering other phases of the project in addition to the first phase — including utilities and earthwork — is expected to cost $28 million. Permitting, planning and design will also require a significant up-front outlay — actual construction will account for only about $60 million of the $105 million total cost, Cherokee Indian Hospital Authority Director of Engineering Damon Lambert told the Health Board during a July 21 meeting. 

“It’s going to be better if we do all the permitting for all of the project now, and the federal agency has made that very clear,” said Lambert. 

The estimate also includes $5 million in potential cost escalation. That figure comes from the construction managers, said CIHA CEO Casey Cooper, and they are at risk for that estimate.

The $105 million figure also includes expenses such as furniture, medical and kitchen equipment, landscaping and artwork.

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Once complete, the first phase of construction will add a 100-bed skilled nursing facility, a 24-bed memory care center and a dialysis facility to tribal healthcare facilities, a total of 154,000 square feet. The final project will total 300,000 square feet and also include an adult day care, 24 assisted living apartments, 18 independent living cottages and 42 independent living apartments. 

It’s a plan that’s been under discussion since 2019, when Tribal Council passed a resolution directing the hospital to form a long-term plan for a new senior living campus. In that same year, the hospital hired an architecture and engineering firm and conducted community and Tsali Care input sessions to gather ideas. 

“We got great information,” said Lambert. “We got a lot of good ideas from the community and the residents that are at Tsali about what they want to see in the project.”

The master plan was finalized in February 2020 and presented to the hospital’s governing board in March. After a lengthy discussion, the board selected an option from the menu presented, and Tribal Council endorsed that same option during a July 2020 work session. Since that time, hospital leaders have refined the plan and broken the project down into phases, completing pre-construction work following the hospital governing board’s March approval of up to $125,000 for those efforts. There may still be slight changes to the design as final planning wraps up — geotechnical borings must still be completed, for instance — but major changes are not expected.

Right now, the plan is to execute contracts in November and to complete construction between March 2022 and December 2024, with the facilities opening in early 2025. However, Lambert said, that schedule is a “bit conservative,” and it’s possible the project could finish faster. 

“Our goal would be to do an early release package for site work,” he said. “Site work is the biggest part of the project. It will take the longest to complete. The sooner we can get that going, the quicker the project can get done, and it will actually save us money the faster we can do it.”

 

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A proposed replacement building for the current Cherokee County Clinic would feature upgraded and modernized facilities. EBCI rendering

 

The second, smaller health project Council approved last month is a new $5.4 million facility for the Cherokee County Clinic. Lambert said he’s “pretty confident” about the accuracy of the $5.4 million figure, as the hospital reached out to multiple vendors for pricing and received “almost identical” responses. 

“I think anyone who’s been to the Cherokee County clinic would agree it’s in desperate need of a new facility,” Cooper told Council in August. 

The property that holds the existing facility is too constrained to accommodate a new, larger building as well, said Lambert at the July meeting, so the plan is to build the facility on tribally owned property along Tomotla Road. It’s located about 3 miles northeast from the Valley River Casino. The tribe owns four parcels at the proposed location totaling 329 acres.

“If all the regulatory requirements can be met, this would be a really ideal location,” Cooper said. 

The new facility would include two exam rooms, three dental exam rooms, a telehealth room, an exam/procedure room and a triage room. Design would occur from October through December, with construction planned for January 2022 through January 2023, and the facility opening in mid-2023. 

The resolutions for both projects state that funding would come from “available sources and debt financing.” And while the tribe would certainly be responsible for coming up with the money for construction costs, Cooper said he’s optimistic that the hospital could pay those costs back extremely quickly through leases with the federal government. 

Section 105-L of the Indian Self-Determination and Education Assistance Act allows tribes and tribal organizations to lease their facilities to the federal government to carry out government functions. The 105-L leasing program has allowed the hospital to reimburse the tribe completely for the cost of its $80 million hospital, completed in 2015. The 105-L leasing program is currently included in both the U.S. House and White House versions of the federal budget. 

“We think the chances of qualifying for a 105-L lease for this project are very, very high,” Cooper said. 

The hospital has not yet conducted an operational pro forma for the Cherokee County site to see how the operations side might pan out financially — it is being considered as a replacement facility. However, much analysis has been conducted on the long-term care project, with a detailed pro forma concluding that “most likely scenario” would take the tribe’ annual loss on long-term care operations down to $1-1.5 million from this year’s $2.5 million. The loss could total as little as $800,000 if the proportion of Medicaid patients reaches 75% of the total beds, Cooper said. 

“We think we can have a world-class facility and have an annual burden on the tribe that’s much less than what it is now,” said Cooper. 

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