Mackinac Straits Hospital is once again considering a new longterm care facility in St. Ignace to replace the current, outdated facility on Burdette Street and is submitting a U.S. Department of Agriculture (USDA) loan application this week.

Several funding options have been discussed for construction of a new long-term building behind the new hospital on North State Street, but hospital CEO Rod Nelson said a federal loan is the hospital's best bet.

"We feel pretty good about it. We are hoping we will get the same outcome we received last time," he said, referring to USDA loans received for the new hospital construction.

For a long term care facility, Mackinac Straits Hospital is seeking a $5 million loan, which will be paid in monthly payments of $22,458 for 40 years. If approved, payments wouldn't be due until late in 2010, after a facility is built.

The hospital had hoped to get long term care facility funding with its new hospital loans, but didn't, said hospital Chief Financial Officer Jason Anderson. But since then, he noted, USDA has received additional federal stimulus dollars and is now in a position to provide direct funding for the entire cost of a long-term care facility.

"I think this is going to come out of the recovery act money," USDA Rural Development Specialist Jim Yoder said. "I'm guessing that will come through pretty quickly."

The hospital submitted a feasibility study with the loan application, which shows how the organization plans to pay back the debt for both new facilities.

The soundness of this study is key in considering applications, Mr. Yoder said.

"You gotta have a good set of numbers backing things before you can can go ahead," Mr. Yoder said. "There is a really good chance that this will be approved."

Confirming appropriate hospital cash flow to meet all of its responsibilities would be the major step, but Mr. Yoder said if the feasibility study is accurate, this should not be a problem.

"Right now," he said, "it's just about getting all the papers in order."

Approval of a loan like this could take 60 to 90 days, Mr. Yoder said, although he knows the hospital administration is hoping to get the go-ahead to start construction sooner.

Mr. Nelson said having a design plan and a confirmed contractor are two requirements before submitting the application, both of which the hospital has met. The hospital has agreed with Skanska, who is overseeing the current new hospital construction, to work together on the long-term care project, as well.

A preliminary design calls for a 30,000-square-foot building behind the new hospital, to hold 48 long-term care beds. The current long-term care facility has 60 beds, which administration said meets the needs of the community.

"We have done all those things in anticipation that it will be approved," Mr. Nelson said. "But it's not a done deal yet."

If funds are approved, he said construction would begin this fall and they would look at opening the new facility a few months after the new hospital opens next spring.

"We would look at a late summer move," he said. "The hospital needs some time to get situated."

The plan would also need to be reviewed by the Michigan Department of Community Health, Mr. Nelson said, and he does not expect that to be a problem.

An additional assisted living facility has been proposed on the new hospital campus, although the hospital administration is still exploring options for funding such a project. Mr. Nelson said the goal would not necessarily be to own or operate such a facility, but to make sure it exists on the same campus as the hospital and proposed longterm care unit.