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Fargo Innovis puts off new wing in favor of opening empty floor with 16 to 18 beds.

Innovis Health executives announced Thursday that the hospital will delay a planned third wing and instead is moving to add 16 to 18 beds to an empty floor.

The decision to postpone a new wing was made because the cost of borrowing in the tight credit markets was deemed too high to make the tower project financially prudent now, said Kevin Pitzer, chief administrative officer of Innovis Health.

"There's a lot of turmoil in the bond market, and that has rolled over to tax-exempt bonds as well," he said, noting rates for tax-exempt bond issues have been running at 7 to 8 percent or higher, well above the historical norm of 2 to 4 percent.

Still, the 86-bed hospital has been running at a high occupancy level - an average of 84 percent last year - and administrators want to add needed medical-surgical beds.

"We continue to see great demand for our services at both the clinic and hospital," Pitzer said. "It's really a phased solution to the issue."

The plan to add medical-surgical beds in the third floor of the hospital's adjacent clinic wing, which has remained unfinished to allow for future expansion,

can be financed internally, he said.

The project to add 16 to 18 beds is expected to cost $3.5 million to $4 million, including equipment. That compares to the more than $30 million estimated for a new, four-story wing, which preliminary plans called for adding up to 40 beds incrementally.

Administrators are inviting input from physicians as well as nurses and other staff as designs and planning proceeds, Pitzer said in a joint statement with Dr. Greg Glasner.

"The entire organization is involved in the process," said Kris Olson, Innovis' vice president of marketing.

The proposal for adding beds must be approved by the Innovis board of directors and its parent health system, Essentia Health.

"It's pretty preliminary in the process," Pitzer said, adding, "We feel there's a strong case."

If approved, the new beds could be ready for patients in 12 months or less.