The Health Department is moving ahead on plans for a 150-bed skilled nursing facility on Hawaii State Hospital grounds in Kaneohe that officials say will provide critically needed beds for older patients with mental and physical health needs.

But the major hitch is the Hakipuu Learning Center, a public charter school in a building where the proposed 50,000-square-foot skilled nursing facility is slated to go.

The department notified the charter school last week that the telephone trunk into the building was going to be cut because of roadwork being done on the hospital grounds, and a notice was posted at the school to vacate the premises by July 31, said Health Director Chiyome Fukino.

"If she’s going to evict us, we’re going to be thrown to the streets because we have no other place to go," said Kala Hoe, chairman of the Hakipuu school board. He said the school year is scheduled to start at the end of this month for about 80 students.

Fukino said the department has been working for two or three years on the facility, which will be financed and built by Avalon Health Care Management Inc. of Salt Lake City.

"We’re very excited about this project," she said. "It affords us an opportunity to move patients who, but for the fact that there is no skilled nursing facility, are confined in the hospital."

She said four cottages in front of Windward Community College were offered to the school a couple of years ago, and patients were moved so the school could relocate.

Hoe said the school has been trying to work out a mutual solution with the Governor’s Office and the Health Department. He described a troubled eight-year history with the agency.

The school was in another building that it vacated at the Health Department’s request to move to its present building, he said. The idea was that it would be transferred to the college, which would give the school a long-term lease, he said.

"We have a letter from DOH but never got an agreement signed."

The school has no lease and pays no rent for use of the Bishop Building. The Health Department had a revocable agreement with the school from 2003-05, but it was not renewed.

Hoe said the school has spent more than $300,000 "and thousands of volunteer hours" to fix up the building, a former hospital adolescent ward.

The school is trying to shift to the cottage site, but one building needs to be torn down and replaced, which will cost about $2.2 million, he said. The school has about $75,000 in its reserves and has asked Castle Foundation, Kamehameha Schools and the Office of Hawaiian Affairs to help with funding, he said.

He said legislators and others trying to help the school have said that even if Avalon had a clear way to build the skilled nursing facility, it would not get to the building now occupied by the school for at least a year.

The school needs 12 to 18 months to relocate to the cottage site so "time lines match," he said. "There is no reason Chiyome Fukino needs to have us out immediately. … Don’t sacrifice the children we are serving."

The Health Department says, however, that it cannot establish an agreement or lease with Avalon until the school moves.

Fukino said the proposed long-term care facility is critically needed by the State Hospital and the community. "We recognize the charter school provides a very laudable service to the people of Hawaii as well, but we feel this is such a wonderful project and benefits so many people."

State Hospital Administrator Mark Fridovich said about 20 patients need skilled nursing services: aging people with physical changes and younger people with significant health issues and mental illness.

"As a hospital administrator, it is so heart-wrenching to see someone 70 or 75 stuck in a hospital with primary mental health problems and age-related changes to the central nervous system charged with something because they’re agitated and have nowhere else to go," he said.

"This provides an opportunity to give people a chance to live out their lives in a facility, not in a state hospital."

The new facility also could take one to two dozen patients in adult mental health programs in the community who are aging with health and psychiatric problems and need special nursing assistance, Fridovich said.

Faye Lincoln, Avalon project manager for the facility, said by telephone from Salt Lake that the company is preparing to submit an application to the state for a certificate of need.

"There is a real need for skilled nursing beds in that area and the whole state of Hawaii," she said. "Most important is the need for specialty services we will provide at the facility" for people with mental disorders and complex medical conditions, she said.

She said the 4.8-acre site has room to add 25 to 50 beds if needed in the future. About 150 to 270 people will be employed, she said.