Star Tribune
University of Minnesota intends to buy teaching hospital from Fairview
The University of Minnesota is taking a major step toward buying back its teaching hospital in Minneapolis from Fairview Health Services.
Regents at the U are expected Friday to approve a letter of intent for a deal that would close by the end of 2027, roughly 31 years after Fairview purchased the U hospital in a financial bail out.
Boards at Fairview and University of Minnesota Physicians already have agreed to the letter, but key elements of the proposed transaction — including a purchase price — aren’t yet clear.
The move comes about 15 months after Fairview proposed an ill-fated merger with South Dakota-based Sanford Health. U officials opposed the move as it would have transferred control of University of Minnesota Medical Center to an out-of-state entity.
University of Minnesota Medical Center is the primary teaching venue for the state’s largest and only public medical school. About 70% of physicians practicing in Minnesota trained at the U.
The letter of intent specifies a first closing date by the end of this year, at which point the U would pay Fairview 51% of the negotiated purchase price. Funds for the health system’s remaining stake would be placed in escrow.
While negotiating the acquisition in the coming months, Fairview and the U will also continue talks on revamping their affiliation agreement for the large M Health Fairview network of hospitals and clinics.
For now, nothing changes with patient care and day-to-day operations. In a joint statement, the U and Fairview said no layoffs are expected and staff transitions are being planned to minimize disruptions.
“We are grateful for the collaboration and shared successes we have experienced with Fairview Health Services over the years — M Health Fairview patients and all Minnesotans are better off because of the work of our talented teams,” U interim president Jeffrey Ettinger said in a statement. “We also agree we will need to step up in new and different ways for the future health of our state.”
The U’s plan to regain ownership of the hospital is bound to be scrutinized, considering the potential expense and the university’s difficulty operating it in the 1990s.
Last summer, Janie Mayeron, chair of the Board of Regents, acknowledged this history, saying she understood one reason the U stopped running the medical center was “we weren’t doing it very well and we thought there were others who had better expertise.” The comment came during a board retreat when Mayeron asked Cliff Stromberg, a long-time consultant to the U, if other universities had taken back their teaching hospitals — an idea that she described as potentially “dicey.”
Stromberg replied that some universities had done so, but he also advised: “Your cautionary observations are exactly right.”
University of Minnesota Medical Center had more than 750 beds staffed for patients during 2022, making it the state’s second largest inpatient facility behind Mayo Clinic Hospital in Rochester.
The facility consists of four large and distinct operations including, on the U’s East Bank campus, an inpatient hospital for adult patients as well as a clinic and outpatient surgery center. Across the Mississippi River and adjacent to the U’s West Bank campus, the complex includes Masonic Children’s Hospital and an inpatient facility that’s one of the state’s largest sources of inpatient mental health care.
Fairview, which is based in Minneapolis and ranks as Minnesota’s fourth largest nonprofit group, owns all three hospital facilities and has a financial interest in the clinic and outpatient surgery center. The deal would provide the U with ownership of all four facilities.
“This is a critical first step towards a new and reimagined relationship that will better meet the current and future needs of our patients and our community…,” said James Hereford, the Fairview chief executive officer, in a statement. “Today’s announcement is designed to provide clarity on our collaborative path forward.”
After the first closing, a new board, with membership split between Fairview and the university, would then run the hospital during a two-year transition period. This would lead to a second closing date by the end of 2027, when the remaining funds would transfer and the U would take full control.
The deal must be approved by regulators, a process that could stretch into 2025.
Meanwhile, the U, Fairview and University of Minnesota Physicians will keep negotiating a new definitive affiliation agreement for running M Health Fairview. These negotiations are crucial because large teaching hospitals typically rely on a network of affiliated hospitals and clinics to refer enough patients for advanced specialty services like those offered at University of Minnesota Medical Center.
The letter of intent sets Sept. 30 as the deadline for this new affilation deal, although there is an option for an extension.
“While this [letter of intent] is a critical first step, there still remain important conversations around the long-term alignment between our organizations…,” Fairview and the U said in a letter distributed Friday to employees. “We will continue to operate as M Health Fairview for the foreseeable future.”
Toward the end of last year, Fairview provided notice that it didn’t want to renew its current agreement with the U, which is set to expire on Dec. 31, 2026. It specifies Fairview’s ongoing financial support for academic health programs at the U, a sum that reached about $100 million last year. The health system says it can no longer afford payments at that level and the university also provided notice that it wanted to negotiate a new deal, as well.
The university floated in January 2023 the idea of building a state-of-the-art replacement hospital on the East Bank campus as part of a five-point plan for its academic health care programs. The letter of intent says the U will pursue analysis, planning and obtaining funding for this new hospital, which officials have said could cost between $1 billion and $2 billion.
The U’s medical school has seen improvements in its national rankings and university officials say the don’t want to jeopardize the reputation with outdated facilities.
In recent weeks, the U sought support for its hospital ambitions and five-point plan from a state task force convened by Gov. Tim Walz. In a final report this week, the group provided qualified support, although members said there was a need for more financial details as well as transparency and accountability measures.
“We know this [letter of intent] leaves many questions unanswered…,” Fairview and the U said in the letter to employees. “We are committed to working collaboratively with our teams and sharing information as we work to build our new and exciting future.”
Reporter Jeremy Olson contributed to this report.
Anti-police brutality activists interrupted a Minneapolis City Council meeting Thursday to call for Police Chief Brian O’Hara’s firing, saying his department failed a Black man who begged police for help for months, to no avail, before he was finally shot in the neck by his white neighbor.
John Sawchak, 54, is charged with shooting Davis Moturi, 34, even though three warrants had been issued for his arrest in connection with threats to Moturi and other neighbors.
Activists showed up at the council meeting and asked for time to talk about the case. Instead, the council recessed and activists took the podium and castigated the city for failing Black people, even as state and federal officials are forcing the police department into court-sanctioned monitoring because of past civil rights violations.
Nekima Levy Armstrong, founder of the Racial Justice Network, said O’Hara needs to be held accountable.
“This is not the first time instance where the community has raised concerns about his poor judgment, poor leadership, blaming the community and excuses. It’s completely unacceptable for him to get away with it,” she said. “How many Black people’s doors have they kicked in for less?”
On Thursday the council voted to request the city auditor review the city’s involvement in and response to the matters between Moturi and Sawchak.
Mayor Jacob Frey released a statement in response saying he supports the council’s call for an independent review of the case, but O’Hara “will continue to be the Minneapolis police chief.”
Protesters also questioned why the public hadn’t heard from Community Safety Commissioner Toddrick Barnette, who called a news conference within hours to say he’s not going to fire O’Hara and the city leadership supports him.
A Girl Scout from Troop 58068 told the Woodbury City Council recently that they should allow backyard chickens in the city: They cheer people up, she said.
It turned out that chickens were on an upcoming agenda and, perhaps pushed a bit by the scout’s lobbying, the Woodbury City Council at their next meeting passed a new ordinance allowing for backyard hens.
The new ordinance went into effect on Oct. 23, the night of the council meeting, and will allow people who live on property zoned R-2, a “rural estate” district, to have backyard chickens. A typical city lot is zoned R-4 and those areas still cannot have chickens, the council said.
The city has received requests “here and there” for the last several years about backyard chickens, City Council Member Andrea Date said.
Backyard chickens come have home to roost — and never leave — in a host of other Minnesota cities that allow them, from Hopkins to Thief River Falls. It’s long been allowed in both St. Paul and Minneapolis, and new cities started approving backyard coops during the pandemic, when interest spiked.
In Woodbury, it wasn’t until the question was included on the city’s biannual survey that city staff knew how people felt. The survey found less support for chickens on a typical city lot — just 13% of respondents said they strongly approve of the idea while 43% percent strongly disapproved — but a majority approved of backyard chickens on lots of 1 acre or more.
The city’s rules until recently only allowed chickens on “rural estate” properties of five or more acres.
The new ordinance allows up to six hens, but no roosters, on property less than four acres that meets the zoning requirements. Larger properties can have an additional two chickens per acre above four acres. The ordinance also sets a height limit for chicken coops of 7 feet. No license or permit is required in Woodbury for backyard chickens.
Star Tribune
Anonymous donor pays overdue bill for Fergus Falls home where town’s first Black resident lived
A $10,000 overdue special assessment bill threatening tax forfeiture of a historic Fergus Falls home was paid off this week thanks to an anonymous donor.
Prince Albert Honeycutt lived at 612 Summit Avenue East, renamed Honeycutt Memorial Drive in 2021. Not only was Honeycutt the town’s first Black resident — settling there in 1872 from Tennessee — he was the state’s first Black professional baseball player, first Black firefighter and first Black mayoral candidate.
He was an early pioneer and prominent businessman who owned a barbershop in town. Missy Hermes, with the Otter Tail County Historical Society, said Honeycutt and his wife were likely the first Black people in Minnesota to testify in a capital murder trial of a man who was convicted and hanged in Fergus Falls.
“In other places, you would never have a Black person testifying against a white person, especially a woman, too, before women could vote even,” Hermes said. “Obviously he was respected enough.”
Nancy Ann and Prince Albert Honeycutt with their children inside the now-historic Honeycutt house in 1914. Photo from the collections of the Otter Tail County Historical Society.
When dozens of people from Kentucky moved to Fergus Falls in April 1898, known as “the first 85,” Honeycutt helped integrate them into the community.
He died in 1924 at age 71 and is buried in Oak Grove Cemetery in Fergus Falls.
Up until 2016, several owners lived in the Honeycutt home. But the city bought and sold the house to nonprofit Flowingbrook Ministry for $1 to take over the tax-exempt property and operate the ministry.
Ministry founder Lynette Higgins-Orr, who previously lived in Fergus Falls, moved to Florida several years ago and little activity has been going on in the historic home since. But she said there are plans to make it into a museum.
