After more than a year of negotiations, the Iowa Department of Administrative Services has received approval to acquire Mercy Capitol for $4.45 million.

The deal will give the state about 4.7 acres of land, including the six-story hospital and the western parking lot with a two-story annex located near the Capitol complex at East 12th and Des Moines streets. Mercy Capitol Medical Office Building on the east side of the hospital is not part of the deal and will remain in operation.

The state originally tried to purchase the entire 9.5-acre Mercy Capitol parcel for $6 million, but Mercy Medical Center was unwilling to sell the clinic property. At an August meeting, DAS Director Mollie Anderson told the Capitol Planning Commission that the amount Mercy was asking for the 4.7 acres was “unacceptable to the state,” but did not disclose the amount.

The state has not determined how it will use the building, but several state agencies have been contacted about whether they need more office space. The state also has discussed using the hospital building to serve as a vehicle fleet maintenance and operation center and provide storage for the entire Capitol complex. It also plans to keep the fitness center and cafeteria for employee use.

The transfer of the Mercy Capitol property will take place in two phases. An exchange of parking lots on or before May 1, 2008, will allow the state to begin construction of a nearby office building. By late 2009, Mercy plans to move its hospital operations to its new facility in West Des Moines, giving the state the hospital and remaining land.

The acquisition is part of an expanded Capitol complex, which involves acquiring more land and constructing 13 office buildings on 187 acres.