The Internal Revenue Service has approved the Albert Lea Healthcare Coalition as a tax-deductible private charity, according to a letter dated Dec. 18.

The approval was effective retroactively to June 19.

Albert Lea Healthcare Coalition President Brad Arends said this was exciting news for the coalition as it had to wait on the tax-exempt status before the organization could close on the purchase of the former Herberger’s space at Northbridge Mall. The space is expected to house the new MercyOne North Iowa clinic.

With the exempt status in place, Arends anticipated the closing to take place in mid- to late January. It also allows for people to make tax-deductible donations to the organization and allows the coalition to start raising funds online.

Funds the coalition raises will go to support the building purchase and renovations. The funds are overseen by a board of trustees.

Arends said the coalition has thus far raised $3.5 million in pledges and cash donations. All donations have been kept in a savings account in the name of the Albert Lea Healthcare Coalition at Security Bank.

He said the organization is initially trying to raise enough money for the first two phases of the project with a goal of opening in late September or early October with 14,000 square feet. That would include seven specialists and at least four family practice physicians.

Future phases planned include additional specialists, an imaging center and an ambulatory surgery center. Each phase will be implemented as goals for patient loads are achieved. When the clinic has reached the fifth phase, it will utilize 40,000 square feet of the 64,000 square feet in the mall space.

Arends said Mercy already has a commitment from one doctor who visited the community a few weeks ago and has another coming in late January. There have been others who have shown interest.

The coalition has been a part of weekly meetings with the architect and MercyOne officials for the project and is also working with another group that wants to set up a gift shop in the clinic.

Board of trustees meetings are held weekly.