Avera moving into Verifications building

• Avera's new home

Part of the former site of Verifications Inc. on the state Highway 37 bypass in Mitchell has been leased by Avera for a payment center. (Chris Huber/Republic)

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Avera has agreed to lease half of the former Verifications Inc. building for a new payment center the health care company plans to open in Mitchell.

Bryan Hisel, executive director of the Mitchell Area Chamber of Commerce and Mitchell Area Development Corp., said Friday that Avera has agreed to enter a five-year lease agreement with MADC for approximately 9,200 square feet of the 18,400-square-foot office building, located at 1308 W. 15th Ave., just off the state Highway 37 bypass.

Avera announced plans for the payment center last August. The center will process payments from across Avera’s health system, work which was previously outsourced.

The payment center, which will create approximately 15 new jobs with a potential for up to 50 jobs in the next three years, is the first time the health care company has opened an office outside of Sioux Falls.

Verifications Inc., a human-resources services company, announced last fall it would be shutting down its operation in Mitchell in November 2012. The closure put the company’s 79 employees in Mitchell out of work.

“Avera Health is a great replacement for the office jobs we lost when Verifications left,” Hisel said.

Initially, Avera planned to locate its new payment center in the Avera Medical Plaza at 2200 N. Kimball St., which the company planned on remodeling.

“As (Avera) looked at the remodeling cost, the option to lease a portion of the Verifications building became a better option for them,” Hisel said.

MADC provided Avera with a $100,000 loan for the project, and $2,000 will be forgiven for each job filled after five years. If all 50 jobs are filled, the entire loan will be forgiven.

Under the terms of the lease, Avera will pay $8 per square foot in rent the first year, or monthly payments of more than $6,100. By the fifth year of the lease, payments will have increased to $10 per square foot, or monthly payments of more than $7,600.

Avera will also be responsible for the building’s property taxes, insurance, utilities and maintenance.

The lease for the building went into effect Jan. 1. Avera has hired a manager and at least one other person for its new payment center, Hisel said, and more employees are expected to be hired in the coming months.

The payment center will operate as an extension of Avera’s hospitals’ business offices. Avera has major regional hospitals in Aberdeen, Yankton, Sioux Falls, Mitchell and Marshall, Minn. The center will support those hospitals and about 23 others in the four-state region.

According to information reported in 2011 by The Daily Republic, the Verifications building was constructed by MADC using $1.5 million in loans, including $500,000 from the city of Mitchell and $700,000 from the state Revolving Economic Development and Initiative (REDI) Fund, with the remaining funds coming from other sources. The MADC also contributed $500,000 of its own funds. MADC broke ground for the building in 2005.

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