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Finances keep new Janesville hospital on hold

JANESVILLE — Plans for a new Janesville hospital and clinic exist on paper, and it's that paperwork that's keeping officials busy as they wait for credit markets to thaw so they can lock in financing for the $150 million project.

Three months after breaking ground for the new hospital and physician office complex on Janesville's east side, officials of SSM Health Care of Wisconsin and Dean Health System announced in February that unfavorable credit markets had delayed the project by at least a year.

Mary Starmann-Harrison, SSM's president, said Monday that SSM and Dean are fully committed to the project.

"We're still working on the plans, still moving forward," she said, although she won't predict an opening date for St. Mary's Janesville Hospital and Dean Clinic Janesville.

Starmann-Harrison said the delay is tied to the system's ability to obtain financing at favorable interest rates. SSM is including the Janesville project with other SSM projects in one larger bond issue.

The tax-exempt bond market, however, is generally one of the last to emerge from a recession in a creditor's favor, she said.

In April 2008, SSM and Dean announced plans for the project near the intersection of Interstate 90/39 and Highway 11. The project is expected to provide 344 direct and 155 indirect jobs and have a $164 million annual economic impact.

Originally, the complex was to open in late 2010, a date that was pushed back well into 2011 by the financing delay.

Since the original announcement, Dean has increased the size of its physician office complex from 120,000 square feet to 150,000 square feet.

That has resulted in changes to the project's footprint, which includes the 175,000-square-foot hospital.

The Madison-based Erdman Co. will join with the Boston-based Shepley Bulfinch and J.P. Cullen & Sons of Janesville to design and build the facility.