Craig — Yampa Valley Medical Center is under contract to purchase a 49,500-square-foot building in Craig that used to house the Safeway grocery store, bringing a new level of competition to The Memorial Hospital.

TMH officials said they’re worried about what the new purchase could mean for the economic viability to Craig’s local hospital.

The news was presented to Moffat County Commissioners on Tuesday morning by The Memorial Hospital Chief Executive Officer John Rossfeld and Chief of Marketing and Business Development Jennifer Riley.

An anonymous source shared architectural drawings with the hospital indicating a medical clinic was being planned for the space. The drawings included what looked like clinic exam space, physical therapy and basic X-ray facilities, Riley said.

“This could potentially have a significant impact,” Riley said. “It’s another example of an external force that could potentially impact our local economy. … We need our community’s support to keep our doors open.”

Adjacent to Centennial Mall, the building at 1295 West Victory Way is owned by Craig City Council member Kent Nielson.

“After I signed the confidentiality agreement, that’s when I found out who bought the building,” Nielson said. “They had their ducks in a row.”

The building had belonged to Nielson’s father since it was built in 1978 before Nielson purchased it from him. The building is still leased to Safeway, which signed a 20-year lease through 2018. Safeway pays all taxes on the building, adding up to more than $20,000 per year, Nielson said, noting it was not his intention to put TMH or Craig in a position where they’d lose business.

“I’m deeply concerned about the city. I raised my family here, my wife and I still live here. Craig is my home. The last thing I’d like to do is do anything to jeopardize Craig or Moffat County,” he said.

It’s too late for him to back out of the deal.

“Yampa Valley Medical, if they do or don’t buy the building, they could build or buy another building. What’s to stop them from progressing in Craig?” Nielson said.

YVMC already operates two locations in Craig, the YampaCare Specialty Clinic and YampaCare Family Medicine, which provide both primary and specialty care services.

“What it comes down to is we’ve had a great response from the people in Craig and surrounding communities … the volume has exceeded expectations,” said Karen McRight, senior director of business development and marketing at YVMC. “We’re relocating all these services into one larger space.”

In a news release issued Tuesday evening, YVMC said it would be renovating and revitalizing the old Safeway store, “creating a significant long-term investment by YVMC in the Craig community.”

The center is a 501(c)(3) nonprofit, raising the question of whether it will pay taxes on the property.

McRight said plans had yet to be finalized in regard to what services would be offered and when the clinic would open.

TMH celebrated five years in its new building on the west side of Craig in November. The new hospital building was funded by Moffat County taxpayers via a mill levy passed by voters in 2007.

“We are a tax-supported hospital, we are a county-owned facility,” Riley said. “Our voters … have made a $42 million investment in this enterprise. We don’t want to jeopardize the investment they made in us.”

TMH employs approximately 250 people and pays out about $16.8 million in salaries, wages and benefits, according to Riley. The hospital’s total impact rounds out to about $20.8 million, according to multipliers created by the National Center for Rural Health Works, with an additional $5 million in estimated local retail sales impact.

“Competition is good. It makes you look at your own practice, look at your own process,” Riley said. “We’ve been doing that successfully for the last 18 months. Our market share in 2014 increased by 3 percent and our patient volumes were up 55 percent because we were working on improving quality, services and access.”

Contact Lauren Blair at 970-875-1794 or lblair@CraigDailyPress.com.