A legal timer has been set on the fate of expansion plans for the Vista Grande nursing home and adjacent Southwest Memorial Hospital.

Vista Grande’s management company, Continuum Health Partnerships, has 90 days beginning Dec. 4 to begin construction of a new home on the hospital campus, according to a lease agreement between the Greeley-based company and the Montezuma County Hospital District.

The clock began ticking after a building site, located on land northwest of the hospital, was allocated by the district for Continuum to construct the new home. The 90-day period is up March 4.

But so far, Continuum officials have not officially accepted the designated site or land-lease proposal sent by the district. The details of the district’s lease proposal were negotiated behind closed doors.

"We sent them the legal description of the site we want them to build on and the new land lease, but I have not heard that they accepted yet," said Susan Keck, MCHD chairperson. "It is still early, although the waiting is kind of nerve-wracking. The ball is in their court."

That anxiety is shared by hospital officials. Construction of the new facility is critical for Southwest Memorial, which is planning to expand non-medical offices into the current Vista Grande building.

The move allows Southwest to go forward with plans to expand its same-day, outpatient surgery department, considered essential for keeping competitive in the industry, according to hospital CEO Bob Peterson.

Outpatient surgeries represent 79 percent of all surgeries performed at the hospital, climbing from 427 procedures in 1990 to 1,962 procedures in 2000. Earlier this month, Peterson requested district assistance in funding the upgrade, expected to cost $500,000.

A key component of that plan is freeing up the Vista Grande building.

"Building a new home is still in the works; that is the intent, pending financing and agreement on the site," said Debbie McWilliams, Vista Grande’s administrator for Continuum, on Tuesday.

The facility is expected to be one-story and could house up to 100 residents, she said. It would have its own dietary and laundry facilities, services now provided by Southwest Memorial.

In a communiqué faxed Wednesday, Continuum President Steve Briscoe reported that the company is planning to build a new facility on the campus and that an "official groundbreaking will be held at a point in the near future."

However, he noted that "several points of the land lease and the site are still under review and analysis.

"We anticipate concluding negotiations with the district and (SWMH’s management) in a positive manner that will result in a new, state-of-the-art facility," Briscoe said.

Acceptance of the site and the land lease are contingent on lender requirements, Briscoe continued. Three different models are being considered, and a larger facility with more amenities is preferred, depending on loan agreements.

Assuring solvency, Briscoe said that equity needed to finance the facility is being held in reserve and "is available on a moment’s notice."

At its December meeting, the district board discussed options if Continuum decides not to build a new home, as required in the lease agreement once a building site is designated.

Responding to board speculation that Continuum could conclude it cannot build the new home, MCHD attorney Kelly McCabe said that such action "would be a breach of contract, and could terminate the lease in my opinion."

"Continuum may back out and work out a gradual release of responsibilities," McCabe said at the meeting, adding that as "more time goes by, the less the chances are that he wants to go ahead with the project."

If that happens, the district could be back in the nursing-home management business, which board members do not necessarily desire.

The district contracted that job out to Continuum in 1994, saying that the home constantly lost money for the hospital district.