Kootenai Health will expand its Coeur d’Alene hospital starting later this year – a step toward its goal of becoming a regional player in health care.

The 254-bed, community-owned hospital will build a three-story addition for a new family birthing center, neonatal intensive care unit, lobby and registration area. It also will have 50 new, single-patient rooms, although 32 existing rooms will be lost in the expansion.

Work on the $57 million project will begin in late summer or early fall. Kootenai Health said it will fund the expansion from cash reserves, borrowing and donations.

Kootenai, which employs 82 physicians and has about 300 doctors on the medical staff, conducted a recent assessment that found a need for about 20 percent more space on its main campus to handle expected growth.

“Now is a great time for us to expand,” Jeremy Evans, vice president of operations, said in a news release. “We continue to see more and more patients, current interest rates are favorable and construction costs and worker availability are also good.”

Other improvements needed in the existing hospital hinge on the expansion, Evans added. “Together, these make this an ideal time to expand.”

The intensive care unit for critically ill and premature newborns will have up to 12 beds, replacing a smaller unit that can’t accommodate more serious cases, which go to Providence Sacred Heart Medical Center and Deaconess Hospital in Spokane.

“Instead of keeping our newborns here in town, we are forced to transfer them over to Spokane to provide services we very easily could have provided here if we had the facility,” said Dr. Terence Neff with Coeur d’Alene Pediatrics.

The project also will give Kootenai modern labor and delivery suites and get away from shared rooms for new mothers, said Neff, who is on Kootenai’s board of directors.

“It will make the overall experience of delivering in our hospital much better for our moms and our babies,” he said.

The existing birthing center will be converted into new operating rooms.

Kootenai estimates the expansion will allow it to bring on 100 to 150 employees by 2018.

Those will be good-paying positions that lift Kootenai County’s economy, said Steve Griffitts, president of Jobs Plus Inc., the area’s nonprofit economic development corporation. The direct and indirect impact of those jobs could approach $20 million, Griffitts estimated.

“The opportunity to make it easier to have first-class services available in your backyard for all of the residents in Kootenai County and really Shoshone County, Bonner County and Benewah, that’s an amazing economic impact as well – sometimes more difficult to measure,” he said.

The addition will rise on the hospital’s east lawn, facing U.S. Highway 95. The first two floors will encompass 75,000 square feet. The third floor, with 25,000 square feet, will remain unfinished and available for later use.

Although the Kootenai Hospital District may assess taxes, it has not done so since 1995, and hospital leaders said they don’t plan to rely on taxes for this expansion.

The hospital’s last major expansion, revealing the distinct blue exterior, opened 30 years ago.

Up to 450 construction workers are expected to work on the expansion. Bouten Construction and NAC Architects will lead the project.