City Council Meeting Date: March 3, 2026
To: Mayor and Members of Council
From: Ben Martig, City Administrator
Title
Zander Abbott, President & CEO of Northfield Hospital and Clinics Update on Pending Action Related to the Purchase of 1400 Jefferson Road from Allina Health System.
Body
Action Requested:
None. Informational only.
Summary Report:
Zander Abbott, President and Chief Executive Officer of Northfield Hospital + Clinics, will present an update on the pending action to recommend the City Council authorize the purchase of property at 1400 Jefferson Road from Allina Health System.
On December 16, 2025, Northfield Hospital + Clinic made a public announcement with Allina Health that we had signed a Letter of Intent for NH+C to purchase the Northfield Allina clinic at 1400 Jefferson Road from Allina Health. Over the past two months we have conducted extensive due diligence under the direction of NH+C's board of directors. The due diligence has included external and internal assessments of impacts to patient care, access, and experience in addition to operations, finances, contracting, and technology.
The NH+C board of directors has scheduled a first review of the due diligence findings at the February 26th, 2026, board meeting. At this meeting NH+C administration will present recommendations, answer questions, and receive input from board members on any outstanding issues to address.
On March 12th, 2026 or at a later special meeting to be determined, the NH+C board will receive a second and final due diligence presentation. At this meeting, the board of directors will consider a motion to recommend to Northfield City Council that NH+C purchase the Allina Northfield Clinic building. This recommendation will include key details outlined below that fall under the reserved powers of the city and require City Council approval.
Key elements of the proposed purchase agreement of 1400 Jefferson Road:
• NH+C will purchase 1400 Jefferson Road including land, building, and equipment for $6 million. An initial payment of $2 million will be made at time of purchase, and the remaining $4 million will be paid to Allina over 5 years.
• This deal will benefit healthcare in Northfield by strengthening the financial position of NH+C and keeping more care local. Duplication of imaging services, lab services, and specialty outreach has created a disjointed healthcare environment in Northfield that has weakened both Allina and NH+C. When NH+C opens a new clinic at 1400 Jefferson Road, it will unite healthcare in our community and create a positive financial impact that returns NH+C to a positive operating margin.
• As part of the transaction, Allina Health will receive a 12-year right of first refusal to purchase NH+C if the City of Northfield decides to change the ownership structure of the municipal hospital. It is important to note that there is a carve out for the situation in which the city decides to convert NH+C to a 501c3 non-profit hospital. In that situation, the right of first refusal would survive, but it would not be triggered, and NH+C would remain independent.
From a tax revenue standpoint, there is no impact to city or school revenue. Healthcare clinics are taxed at the normal property rate and NH+C will be responsible for the payment ($223,900 in 2025) as the new owner.
In addition to facts in this memo, there is an additional public FAQ at the end of the press release on the NH+C website (see attachment hyperlink).
Pending a final recommendation from the NH+C hospital board, Mr. Abbott has requested that this agenda item be brought to the city council at the April 7th Council Meeting. At that time, he will provide additional summary information related to the due diligence and request approval to purchase 1400 Jefferson Road including the land, building, and equipment, and to grant a 12-year right of first refusal to Allina Health.
The NH+C operations team is actively planning and preparing for the September 2026 re-opening of the newly named NH+C clinic at 1400 Jefferson Road with familiar doctors and health care staff but new leadership and ties to our community hospital.
City Plans & Policies Relevance:
Not included with this update.
Alternative Options:
Not applicable.
Financial Impacts:
See information in summary background.
Tentative Timelines:
March 12th or at a special meeting to be determined - NH+C Board Review and Recommendation to Council
April 7th - City Council Actions