Essentia supply center moving to Esko

The Essentia Health medical supply distribution center is moving to 126 Bedrock Lane in the Esko Industrial Park by late 2024.

A 163,000-square-foot warehouse is planned to support the medical supply needs of six Essentia Health facilities regionally, reaching to the Dakotas.

The supply center is currently operating in West Duluth in a warehouse only one-third the size of the proposed construction project. Twenty to 25 full-time jobs will be moved from West Duluth to the new facility.

The Carlton County Board of Commissioners gave preliminary approval for the proposal at its meeting Monday.

Commissioners also gave permission for the nonprofit health system to use the county as a conduit to issue a maximum of $38 million in revenue bonds for the construction project, possibly in May. Essentia is also proposing an additional $13 million bond sale for a drive-through pharmacy in Staples, Minnesota, also through Carlton County. Essentia would pay for all costs of the bond sales.

Although the bonds would pass through the county, the county would have no financial liability for the projects. The vote of approval was unanimous 4-0 with Commissioner Tom Proulx absent.

Essentia Health would be assured a lower bonding interest rate by using Carlton County municipal bond authority, since the interest earned is nontaxable for state and federal purposes. The cost savings is unknown at this time because no one knows what the rate for the bonds will be on the day offered.

Since the proposed warehouse is not seen as a hospital building (which would not pay property taxes), Thomson Township and Carlton County officials are working together to ensure the new warehouse would be taxable property. County commissioners passed the bonding assistance for the project with the assurance from Essentia Health that the property will be taxable.

County commissioners must hold a public hearing on the conduit bonding in order to give final approval. The hearing is set for 4:15 p.m. April 24.

Augustana Care of Moose Lake used Carlton County as a conduit for revenue bonds in the past. The Augustana portion of the old Mercy Hospital complex does not pay property taxes. Oak View Assisted Living in Moose Lake does. There are now two staff people working at what is now the Essentia Health-Moose Lake complex, formerly Mercy, handling supplies and storage, and they will not lose their positions due to the proposed new warehouse in Esko.

State funding hopes

Carlton County had requested $22 million in state bonding money for the combined jail and courts facility during the 2022 legislative session, but the divided legislature failed to pass a bonding bill. Now, because construction has already started, the justice center project no longer qualifies for bonding money, which can be used only for projects yet to be built.

However, both Rep. Jeff Dotseth, R-Kettle River, and Sen. Jason Rarick, R-Pine City, have submitted bills during this year's session asking for $25 million "to construct, furnish, and equip a new regional female offender and judicial center within the Carlton County Justice Center."

Additionally, county officials are also hoping to get some kind of funding for the justice center construction itself, and lobbying for funds from the huge state budget surplus.

In January, the estimated costs for the new justice center were $66 million for construction plus nearly $9 million more in "soft costs" such as furniture, fixtures, equipment and permits.

In November, Carlton County voters overwhelmingly accepted a half-percent sales tax to pay for the jail and courts facility being constructed in Carlton. The half-cent sales tax increase will be in effect until $60 million is collected or 30 years have passed.

Sawyer ambulance payment

Commissioners approved $3,901 for ambulance services from the city of Carlton as the unorganized township of Sawyer's share. The county board serves as the town board for the unorganized township of Sawyer.

Ambulance funding in the past was lumped in with funding for fire coverage from the Carlton Fire Department. New ambulances are running about $350,000 per unit for delivery in 2025. Training for emergency medical responders and emergency medical technicians continues to climb. Ambulance staff salaries are the largest expense.

The township had 23 ambulance calls during 2020.