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Multi-Million Dollar Hospital Expansion Project Is Dead

By David Howell


WATER VALLEY – A $5 million hospital expansion that has been in the planning stages for years and has gone out to bid twice is officially dead following a decision from hospital officials and a vote by supervisors.

Supervisors voted last Friday to relinquish a $640,000 Community Development Block Grant allocated from the state for the project after learning that a deadline was approaching to utilize the funding and Yalobusha Health Services had decided not to move forward with the plan that included adding 8,000 square feet with a second floor addition at the hospital that would house a geropsych unit. The plan also included a long overdue lab renovation as well as interior and exterior renovations. 

Friday’s decision follows earlier input from YHS Administrator Terry Varner, who told supervisors last November that the hospital trustees were split on the project – four in favor and three against. Varner explained that one of the trustees was uncomfortable with borrowing money and the other two cited obstacles pertaining to environmental issues on the property.

“I am disappointed,” District 3 Supervisor Lee McMinn said about the decision to scrap the project at last week’s meeting, adding that multiple hospital board members were in favor of the project.

Financing for the project initially included the grant, along with New Market Tax Credits and a USDA loan. The financing package was in place in 2017 and, with full approval from the hospital board, supervisors awarded a $5 million bid for the work to Century Construction Group, LLC, in Sept. 2017. That bid was rejected by supervisors two months later after environmental concerns surfaced about the use of tiers to support the second floor addition. The piers would require deep penetration in the ground and could disturb the trichloroethylene (TCE) in the soil and ground water. The environmental problems stem from a decades old chemical spill on property adjacent to the hospital. 

After the first bid was rejected by supervisors, county supervisors and hospital trustees convened in late 2017 in a joint meeting to map out construction details, including a possible change to the plans that would scrap the second floor addition and instead only use ground floor space for the planned geropsych unit.  

During that meeting, both groups decided to forge ahead with the original two-story plan after learning the Mississippi Department of Environmental Quality (MDEQ) would approve the plan if steps were taken to address the potential TCE threat – steps that included monitoring the air and other precautions as part of the construction at the hospital.

However it took another six months for that MDEQ approval to become a reality and it came in the form of an environmental covenant executed by the county, MDEQ and other parties on the 12-acre tract of hospital property. 

After the covenant was finalized, the project was rebid in August, 2018. Century Construction was the low bidder at $5.3 million, but the bid was not awarded and last Friday’s vote will end the project. 

During last November’s supervisor meeting, Varner told supervisors the hospital had already spent $600,000 on the project.

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