TMH loan closes; 2009 opening anticipated

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— Administrators from The Memorial Hospital returned Wednesday night to Craig with a holiday gift from the federal government.

That is a finalized, closed financing package worth $40.3 million from the U.S. Department of Housing and Urban Development for a new facility.

The new hospital comes with a $42.6 million price tag. TMH already has paid the difference on the building.

"It's a credit to our community, the (hospital) board and all invested in this project that we were able to do this with the government at a time you can't get financing anywhere," said George Rohrich, TMH chief executive officer.

Rohrich and Barry Bergman, TMH chief financial officer, spent two days in Denver wrangling out final details of the agreement with HUD. The deal officially closed at 5 p.m. Wednesday.

It was no surprise the deal went through for TMH officials, who have worked since August 2007 on planning for the new facility. HUD notified TMH in October that it would guarantee the loan.

Moffat County voters approved funds for the new hospital in November 2007, and HUD essentially is acting as loan co-signer.

"Shockingly anti-climatic," Bergman said about the deal coming to a finish Wednesday.

"We were always confident that this would happen," Rohrich said.

As for the new hospital itself, TMH officials said work is progressing.

A year of site work took place before work began on the building in October.

Workers from the construction company, Robins & Morton, are expected to work through the winter on the project.

TMH anticipates moving into and opening the new facility, located on a 15-acre site west of town on Colorado Highway 13, about this time next year.

"Literally, a year from this month," Rohrich said.

The new hospital will include 25 in-patient rooms, an expanded surgical and diagnostic suite, and centrally located pharmacy and laboratory services, among other features.

All told, it will entail about 80,000 square feet.

Comments

DAILYREADER 6 years ago

INTERESTING THAT JOSHUA ROBERTS CONSIDERS THE HOSPITAL LOAN A FEDERAL GIFT. BY THE WAY, WHAT IS THE INTEREST RATE ON THE LOAN? IN ALL OF THE DAILY PRESS NEWS ARTICLES AND ALL OF THE HOSPITAL PUBLIC RELATIONS EFFORTS NONE HAS EVER BEEN MENTIONED. ARE THE CITIZENS BEING TAKEN FOR ANOTHER RIDE?

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taxslave 6 years ago

I mentioned interest rates on a post awhile back. Just like DC.....NO TRANSPARANCY.

Exactly who are these people anyways?

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Cole White 6 years ago

Remember that there are two rates that need to be looked at. The first is what they are paying on the money they are buying (notice i didn't say borrowing). I believe this is what you would call the Annual Percentage Rate or APR. The other is the Annual Percentage Yield which factors in the front end costs associated with taking out this loan. I believe in previous posts that the hospital budgeted serveral million in upfront loan orrigination costs. Some people call this bond insurance (mortgage insurance if you are a little guy). No matter how you look at it, it factors into the total interest yield. They may say that there APR is only 6%, but when you have bad credit and can't put nothing down, they make you take out a loan for say 42,000,000 but they only give you 39,000,000. The rest is put into other investment accounts and the lender gets to use it as they please for 25 or 30 years and then you may get some of it back to pay off the last couple years of the loan or the lender just gets to keep. This is how a lot of loans work and wouldn't be unusual if TMH is dong this. Total APY may be as high as 10 - 12% depending on how much the upfront financing charges are. I would suspect the upfront costs will be pretty high since TMH hasn't turned a proffit in a few years and likely has a poor cash position.

Regardless though, the financing is here and it is going to help build the new hospital, so lets just hope they can service the loan once they have to start making payments. This won't be in 2009 or 2010 since those payments/fees will likely be part of the finance package. What the county should pay attention to is years 3 through 5, those years will be the tell-tell sign.

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