Aurora: We are headed to Oconomowoc

Judge finds city move blocking construction was invalid

Waukesha Freeman, May 26, 2006

By Erik Brooks
Freeman Staff

OCONOMOWOC Aurora Health Care will move ahead with plans to build a 360,000-squarefoot, 88-bed hospital at Pabst Farms following a judges ruling declaring invalid the citys efforts to use zoning to block construction of the same facility in 2001.

Aurora handed over preliminary plans for the hospital and a 100,000-square-foot medical office building under the same roof to city officials Thursday afternoon, capping a dizzying day of events that began with a court victory for the health care system and starting anew a likely contentious review process.

Sue Ela, vice president of the Kettle Moraine Region for Aurora, called the zoning and other decisions by Waukesha County Circuit Court Judge James R. Kieffer a significant victory and said Aurora is anxious to move ahead with what may be a $166 million development on 43.5 acres northeast of Interstate 94 and Highway 67.

We want to build in western Waukesha County, and if this is the site that provides us the greatest opportunity to do that, then we will move ahead with that plan, Ela said. We are hoping that maybe the judges ruling today provides another opportunity to look at the proposed hospital in a fresh way.

The decision to attempt to build in Oconomowoc throws into doubt plans Aurora has to build a similar 88-bed hospital on 53 acres in Pabst Farms southeast of I-94 and Highway 67 in the town of Summit. Aurora had focused on those plans recently after the Oconomowoc project fell through in 2001. Aurora had also put its five-year-old lawsuit against the city on hold while it pushed ahead with the town of Summit project.

Then, in April 2005, the Waukesha County Board rejected plans for the town of Summit hospital leading to a separate lawsuit in that case and Aurora decided to restart its suit against Oconomowoc. Kieffers rulings Thursday were the first significant decisions in the Oconomowoc case since Aurora reinstated it last fall.

The town of Summit has been our preferred site, but the only avenue available to us right now is construction in the city of Oconomowoc, Aurora spokesman Jeff Squire said. That is where we are headed.

Aurora is hoping to begin construction on the Oconomowoc hospital this fall in time for a spring 2008 opening, according to plans.

Aurora officials declined to speculate on the cost of the new hospital.

However, an expert hired by Aurora in the Oconomowoc lawsuit put the cost of building a hospital with a Dec. 31, 2008 opening at $166 million, including land, building and equipment costs.

A spokeswoman for rival ProHealth Care a vocal critic of Auroras decision to build at Pabst Farms criticized the hospital plans, and said it remains undeterred in its recently announced $36.7 million renovation and expansion of Oconomowoc Memorial Hospital, less than three miles from the planned Aurora facility.

Spokeswoman Sandra Peterson said the health system stands behind its project, saying, We dont base our planning on what Aurora may or may not do.

We will meet the health care needs of our community for $37 million, without the need for a $166 million redundant hospital and its purely duplicative services, she said.

Oconomowoc Mayor Maury Sullivan who was not mayor at the time of the 2001 lawsuit confirmed that the city received a request from Aurora seeking a special use permit for the hospital Thursday afternoon. He said city officials still must finish a review the courts decision and meet with city attorneys before deciding on a course of action.

Even so, Sullivan said he expects to join city staff members in meeting with Aurora officials within the next two weeks on the new hospital project.

There are any number of possibilities here, Sullivan said. I understand Aurora wants to be there, so well have to decide whether were going to permit that or not permit it.

Sullivan said Auroras renewed interest in Oconomowoc took him by surprise.

Apparently, we need to get used to that because the decision is made, he said.

Sullivan said he was told that Kieffer, in deeming the entire rezoning process invalid, in effect removed the suburban industrial zoning that the city council put on the Aurora parcel in 2001 making the entire tract of land once again suburban commercial, which allows for construction of a hospital.

That zoning determination was one of a number of rulings Kieffer handed down Thursday as he spoke for more than an hour on motions filed in the case.

Most of the decisions favored Aurora and countered those made by two previous judges Judge Kathryn W. Foster and Judge Lee S. Dreyfus Jr. who heard the case before it was put on hold.

In one key ruling, Kieffer ruled Oconomowoc officials violated the states open meetings law in not properly posting in public a meeting where the potential construction of the Aurora hospital was discussed.

Kieffer also ruled Oconomowoc will not be exempt from damages in the case if Aurora can prove what it is alleging that the Oconomowoc Common Council acted in conjunction with ProHealth to block the hospital construction.

If the citys rezoning was for the sole and illegal purpose of protecting ProHealth, then the city has no justification or excuse for its actions, Kieffer said.

Armed with the rulings, Ela said Aurora plans to move ahead with the lawsuit against Oconomowoc because there are certainly damages that are still at play.

In court filings, Aurora has said the decision to block the Oconomowoc construction has cost the hospital system $59 million in lost revenues and higher construction costs.

Ela, however, reiterated Auroras hopes for settlement talks with Oconomowoc.

Sullivan said the city has not yet engaged in such talks and declined comment when asked if the city would consider taking part in settlement discussions.

In fact, Sullivan indicated he is not completely convinced Aurora even wants to move ahead with building a hospital in his city. I dont know whether we are going to go through the process or are not going to go through the process, he said.

Squire said Aurora is indeed serious about the Oconomowoc effort, which before late Thursday morning seemed all but dead. We are moving ahead, he said.