Charles Peterson is learning to walk again.

The former Snoqualmie mayor and retired labor negotiator’s imposing frame is laid up in bed, recovering at Snoqualmie Valley Hospital from hip replacement surgery.

“Right now I can’t hardly walk to the door with a walker,” he says, jabbing a finger towards his room’s door. “Everyday it gets a little better.”

It gets a little better thanks to the hospital’s physical therapy program and staff, said Peterson, a Snoqualmie City Council member.

As Peterson gets closer to walking on his own, the hospital is getting closer to finalizing negotiations for a new home on Snoqualmie Ridge, according to hospital officials.

The hospital is in talks to buy 7.5 acres at the intersection of State Route 18 and Interstate 90, according to Rodger McCollum, CEO of King County Hospital District No. 4. The site is opposite the location previously considered.

The district wants to finalize the purchase by early summer. The city is expected to rezone the site for hospital use later this month, he said. The project is expected to take 18 to 24 months. The new hospital could be finished by late 2010 or early 2011.

The land is expected to cost around $5 million, but will allow Snoqualmie Valley Hospital to expand from 30,000 to around 65,000 square feet, greatly expanding and improving its health services. The hospital is also considering a 20,000- square-foot office building. The district is working with Opus and Salmon Bay Design Group on the project.

“Our current facility is just inadequate to deliver the care we need in the next 20 years,” McCollum said.

The biggest hurdles to getting a new facility have been financing and design, he said.

The total cost is estimated at $45 to $50 million, according to McCollum. The hospital hopes to begin construction on the new building this fall.

The district hopes to issue a new bond, which will cover land, some of the district’s $22 million of existing debt and predevelopment costs, in the next 60 days, said McCollum. The bond will raise approximately $15 million — under the amount of debt requiring a public vote in the district — and likely not affect taxes in the district.

The bond market has been severely hurt by the ongoing economic crisis.

“It’s going to depend on the bond market,” he said. “The bond market is a little tight but seems to be thawing somewhat.”

The new facility will be financed by additional bonds, the sale of the existing property to the Snoqualmie Indian Tribe and Medicare reimbursements. Based on the experience of comparable hospitals, the district expects to see a substantial increase in revenue within a few months of opening. The tribe has purchased the existing hospital and its 50 acres, which border the tribe’s reservation and casino, for $30 million. The district will receive the money by May 2010.

The district has not decided exactly how the project will be financed, though. The $30 million from the tribe could be used to pay off existing debts or it could be put towards the new facility.

The new space will allow the hospital to expand current services and add new ones, said Dr. Kim Witkop, Vice President of Medical Affairs.

“As the community grows, they’re going to develop more needs,” she said.

At its current location, each month the hospital’s emergency room treats 380 patients, and its clinics see around 2,000 patients. The hospital’s 14 beds log around 150 “patient days” every month, according to Witkop.

Peterson has already logged over a dozen days himself since his surgery at Seattle’s Overlake Hospital, and expects to spend a dozen more days at the hospital. Like many Valley-residents, he had surgery in Seattle, but is recovering closer to home.

“It’s a half-mile, so my family can come see me. It’s not a half-hour drive,” he said. “It’s a vital function. Why should people drive all that way for treatment in Bellevue when you can get it here?”

Washington considers Snoqualmie Valley Hospital to be a “critical access” hospital, which provides medical care to rural communities.

However, the hospital’s current location would hamper its ability to deliver care to the Valley’s growing communities, according to McCollum. The current site has no direct access off I-90, and lacks visibility.

“A lot of people in our community don’t even know we have a hospital,” McCollum said.

Hospital officials examined the experience of other critical access hospitals in planning Snoqualmie’s new facility.

Health care has profoundly changed since the hospital’s present facility was built in 1973, when there was a focus on in-patient care. Today, 80 percent of patients are out-patients and only 20 percent are in-patient, said McCollum.

“A patient can go into the cath lab and have a balloon angioplasty, and be out the same day. That was just unheard of 20 years ago,” he said.

The new hospital will also include more accommodations for family visitors, which improve recovery times, McCollum said. Each of the new facility’s 24 patient rooms will have a fold-away bed for a family member to sleep on.

King County Council’s decision last October to kill a proposal that would have included a Bellevue Community College health sciences campus as part of the hospital was discouraging, McCollum said.

The country will face a critical shortage of nurses in 10 years.

“We were on a mission to facilitate that as much as possible by allowing BCC to locate its facility at our hospital,” he said.

Snoqualmie Valley Hospital should not be affected much by the nursing shortage. Its staff is drawn mostly from more-experienced nurses looking for a better work environment, which the hospital offers, he said. Snoqualmie has a high nurse-to-patient ratio, unlike many urban hospitals.

The hospital has seven emergency room doctors, who continually staff the ER, and a host of specialists, who split their time between the hospital and their communities. Another set of doctors, “hospitalists,” oversee care for admitted patients. The three groups of doctors — community, ER and hospitalists — coordinate care from home to hospital back to home.

The final design must be approved by the state’s Department of Health, and then sent to the city for permitting.

The Snoqualmie Indian Tribe has said it will use the current hospital for tribal health. The Tribe did not reply to requests for comment.