Avera announces new hospital, development plan for 69th & Louise

By Jodi Schwan

Avera will build a new surgical hospital in southwest Sioux Falls as part of $174 million in planned projects in the next two and a half years.

The first phase will include a 24-bed hospital and a connected medical office building that comprise 260,000 square feet on the property Avera owns on the southeast corner of 69th Street and Louise Avenue. The health campus will focus on specialties that include orthopedics and sports medicine, gastroenterology, rheumatology and internal medicine.

“I’m absolutely thrilled,” said Dr. Dave Kapaska, regional president and CEO of Avera McKennan Hospital & University Health Center, calling the project a “bold, transformative campus” that is part of a “broad and unified development plan to meet the rapidly growing needs of Sioux Falls and the region.”

This 82-acre property will become the Avera on Louise Health Campus.

Avera has owned the 82-acre property for the past several years. It had been used as farmland, and construction is expected to start later this year. The hospital is scheduled to open in 2020. It will sit on 30 acres on the northwest side of the site in a campus-like setting that also will include additional clinic buildings.

“It’s the largest investment ever in the history of Sioux Falls,” said Dick Molseed, executive vice president of strategy and governance for Avera Health.

“This campus is going to be able to be developed with ease of access right off the interstate, with high visibility, and it will be designed that the clinical portions of it will be able to be added on to as needs see fit.”

In addition to orthopedics, the hospital will have the capacity for gastroenterology procedures and potentially other lower-risk surgeries and procedures. It will include an outpatient gastroenterology unit and be connected to a multi-story commons space with dining options, a gift shop and a chapel. Other services will include physical therapy, laboratory, imaging and pharmacy.

It took three or four years to determine which specialties would be involved in the Avera on Louise campus, chief administrative officer of Avera Medical Group Dave Flicek said.

“We had multiple plans and multiple constituencies to talk to. We finally settled on orthopedics and GI,” he said. “They were specialties that were growing with the population, so it was logical to share some services between the two of them.”

Rheumatology patients often struggled to walk around the McKennan campus and will find the Louise site more convenient, he added.

Avera estimates more than 600 construction workers will work on the project, with a two-year payroll of nearly $28 million.

The Avera McKennan campus in central Sioux Falls, which sits on 52 acres, will undergo substantial renovation starting this year. That will include new rehabilitation units, expanded intensive care capabilities, new in-patient surgical suites and expanded clinic space.

“Health care of the future must be convenient and easily accessible, so Avera is revisioning what care we offer where,” Kapasaka said.

That means more complex procedures, such as transplants, will be performed at the central McKennan campus, while the Avera on Louise campus is designed for easy access.

Avera likely will add some retail to its campus at 69th and Louise, including a potential hotel.

“Sixty percent of our inpatients in Sioux Falls come from more than 60 miles away, so convenient access is important,” Molseed said. “This is a growth opportunity for Avera. We have a mission to take care of people, and our facilities in Sioux Falls have to keep up with the population in the region.”

The focus on orthopedics meshes with the overall and anticipated growth of the field within health care. An aging population combined with people’s desire to become more active and stay active longer is driving demand for orthopedic services. Sanford Health has identified orthopedics as a growth area on its central Sioux Falls campus, and Orthopedic Institute has started offering its services in partnership with GreatLIFE Golf & Fitness.

Avera recently split with seven orthopedic physicians who had been part of CORE Orthopedics. Those physicians sold their Prairie State Surgical Center to Sioux Falls Specialty Hospital, and Avera subsequently hired seven other orthopedic surgeons. The plan is to continue to grow the specialty. And the new hospital is part of the strategy.

“This is an unflinching example of the unified, strategic effort Avera is making to enhance health services in the region by providing greater and easier access to convenient, high-end health services like orthopedics and gastroenterology,” Kapaska said.

Campus plan

While the overall plan for the Avera on Louise campus has gone through several iterations and is still being finalized, a few details have emerged.

It has a park on the east side, and it’s being designed to include a water feature and a walkable layout.

Don’t expect Avera to stray too far from the aesthetics used in previous projects, either.

“Avera has worked off a prairie design in the exterior of our buildings, so expect to see that continuity,” Molseed said. “The interior design will be modern and efficient and welcoming and intuitive.”

Avera likely will add sports facilities on the site as well, Kapaska said. Its basketball program currently is located at 85th Street and Minnesota Avenue, and its volleyball is located near 41st Street and Grange Avenue.

“They’ve been in existence over four years and I promised back then … to build a pipeline to our orthopedics and give credibility both to patients and to our new recruits interested in participating in sports medicine and therapy,” he said.

The 82-acre property also sits in an increasingly commercial area of southwest Sioux Falls. That makes it prime land for other development – a fact not lost on Avera, which Molseed said will consider using some of the property for non-medical purposes.

“We’re evaluating that … whether other kinds of guest amenities like restaurants and hotels (make sense),” he said. “We would see our own retail needs, though, for medical equipment and things like that, as a natural fit.”



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Avera announces new hospital, development plan for 69th & Louise

Avera will build a new surgical hospital in southwest Sioux Falls as part of $174 million in planned projects in the next two and a half years.

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