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PeaceHealth officials earlier this week asked state administrators to let them wait six additional months before beginning construction of a $73 million project at its Sacred Heart University District campus in downtown Eugene.

If granted by the state, the delay would be the fifth 鈥� all for financial reasons 鈥� for the project that was originally slated to begin in summer 2008. But administrators at the health organization said past delays have helped the project, and they expect this one to do the same.

PeaceHealth needs state administrative approval for a construction extension because the organization has an agreement with the state to provide its services, and some state oversight is required because it relates to health care. PeaceHealth officials have submitted the paperwork for the extension, and will know within three to four weeks whether it has been approved.

Under the proposed timeline revision, demolition would start in June 2012 and a new hospital would open in mid-2014.

鈥淭he design and architecture work is all done,鈥� said Jim Godbold, a spokesman for the Oregon region of PeaceHealth. 鈥淭his delay is all about firming up unanswered questions about budgets at the state Legislature.鈥�

PeaceHealth is waiting to hear how much state Medicaid revenues, a funding source for the project, may be cut. According to the Oregon Association of Hospitals and Health Systems, a Senate bill expected to be passed by the Legislature would cut nearly $239 million from the second year of an $11.9 billion biennium budget for the Oregon Health Authority, which oversees health care for low-income and disabled Oregonians.

While the package is likely to pass, cuts to Medicaid have not been determined. Cuts are expected to be between $8 million and $32 million, Godbold said.

鈥淚t could be pretty dire for us,鈥� he said. 鈥淏ecause of that we wanted the sixth-month extension to make sure and see if maybe we have to look at other funding types or maybe spread the payments out over a different time period.鈥�

Approximately $30 million of the $73 million project cost is being covered by donations; the remainder is planned to come from bonds and other state sources.

The project consists of demolishing five existing buildings 鈥� a total of 335,000 square feet 鈥� and constructing a 120,000-square-foot, three-story hospital with 104 new hospital beds. Additionally, a total of 60,000 square feet of existing space in multiple buildings will be remodeled extensively.

Portland-based Ankrom Moisan Associated Architects completed the architecture work for the project. Turner Construction, the general contractor, previously served as the general contractor for a $500 million PeaceHealth facility in Springfield. A new price agreement and contract will have to be worked out with Turner; however, Godbold doesn’t expect any major changes.

鈥淲e’re trying to work with them and maintain the existing structure of the deal,鈥� he said.

鈥淲e’re in good shape and in full support of PeaceHealth,鈥� Turner Construction project manager Dan Kavanaugh said. 鈥淥ur only concern is that it’s going to take some more time to get in there and start moving dirt. We’re in constant communication with the team there and we will spend the extra time further formalizing our involvement in the project.鈥�

Additional changes are not out of the question. During the last delay, which lasted more than a year and a half, the project team decided not to follow the original idea of seismically upgrading and renovating the existing facilities.

鈥淲hile I definitely don’t anticipate any changes, the last delay was beneficial to us,鈥� Godbold said. 鈥淲e rebid the project and found out that with drops in construction and materials costs it was cheaper to build new than remodel.鈥�

Godbold said that past delays were because of the recession and uncertainty about health care reform, and that this one is merely a precaution.

鈥淲e’ve spent $2 million on this project in the last year alone, and fully expect to move forward,鈥� he said. 鈥淲e just don’t want to start demolishing buildings before we know for certain our funding is in place.鈥�