COLUMBUS - Commissioners were given an informational presentation on a new medical office building to be built as part of a medical complex in Galena.
The project will go in two phases and is being financed through the issuance of industrial revenue bonds by the City of Galena.
According to Ray Barmby, who is advising the development group, Galena MOB Partners LLC., in the financing of the building, the project will be in total about $10 million with the first phase, of about $5 million.
The first phase will be a 30,000 square-foot two-story office building which will house about 10 doctors and assorted staff.
Accompanying the request for the issuance of the bonds will be a request for a 10-year tax abatement from the City of Galena.
Barmby stressed the abatement was only for new construction and existing property taxes would continue to be paid.
Barmby said the bonds, though issued by the City of Galena, will not be a city obligation, but will have to be paid by Galena MOB Partners, which was formed by Joe Caputo, Orthopaedic Specialists of the Four States Business Manager and Ivan Crossland Jr., president and CEO of Crossland Construction.
The second phase of construction, which will begin if and when the first phase is full, would be another $5 million project and would have room for another 10 doctors and associated support staff. Each phase is expected to add 40-50 staff in addition to the doctors.
It will be located near the new specialty hospital currently under construction in Galena and is in part a response to office needs for the new hospital, but also in response to the destruction of much of the Joplin, Mo., medical district in the May 22, 2011 tornado.
"This project is a text book example of economic development," Barmby said in prepared remarks. "One new project begets another project - the office building will support the new hospital but one of them wouldn't be coming out of the ground without the other."
Commissioner Pat Collins took some exception to the tax abatement noting the abatement will theoretically cost the county about $665,000 in tax revenues and the city of Galena $544,000.
Caputo noted since building in Galena the $12 million Ortho-4States facility has paid about $200,000 a year in property taxes and neither it nor the current hospital project has an abatement.
He also noted there will be other projects on the 120 acres owned by the development group.
Galena Mayor Dale Oglesby said he had no issues with the tax abatement.
"If anyone understands tax issues it's me," he said. "We're not actually losing anything because we're not losing tax base. We're gaining jobs."
Oglesby said this is the most transformational opportunity Galena has had since the demise of the mining industry.
"We're excited about it," he said. "We're just delighted. I think it's going to affect the entire county."
Collins said his reservations about tax abatements not withstanding, he is solidly behind the project.
"This is great for the county," he said. "It's huge."