Hospital Sells Bond to Finance Project
Reprinted with permission by Crested Butte News
Friday, September 3, 2010 edition
Written by Seth Mensing
Wednesday, 01 September 2010
link to story
Gunnison Valley Health (GVH) closed on a $7.5 million bond issue Friday, August 27 to pay for a 13,000-square-foot addition and 4,500 square feet of remodeled space inside the Hospital. Just in time, too, as the initial site development has already started and the official groundbreaking was Thursday, September 2.
The tax-exempt municipal bond issue was short and sweet, going to Wells Fargo in one shot at a rate of 4.02 percent over 13 years. The bond repayment is timed to coincide with the last payments on $5.5 million in outstanding debt GVH is still holding from the construction of a 35,000-square-foot facility that opened in 2000.
It’s all part of a three-step plan that has one expansion remaining. But that is still a few years away.
Wells Fargo investment banker Will Douglas said that not only will the new debt have a shorter term and lower interest rate than the previous issue, “It will be refinance-able really at any time… and it’s a very favorable interest rate relative to what we could do in the public markets. Those markets for healthcare have very wide credit struts. We’d probably be looking at interest rates higher than 6.5 percent on a 20-year basis.”
Of the $7.5 million, about $6.2 million will be used to pay for the construction of the new buildings. Ten percent of the total debt must be held in a required debt reserve and another $650,000 will go to pay off a loan to help purchase space for Crested Butte Physical Therapy in Crested Butte’s Ore Bucket Building.
A large part of the hospital, as it is today, was built as part of the first addition that included new emergency and surgery departments, among other things. The coming addition will put the x-ray, CT scanner and new digital mammography equipment closer to the emergency room, which is meant to improve the efficiency and accessibility for patients and employees, and bring the magnetic resonance imaging machine in from the cold—it’s currently outside in a trailer.
The price tag for all of the hospital’s new imaging equipment will be around $2.3 million.
One piece of imaging equipment that should make anyone with a case of claustrophobia happy is a short-bore MRI that is half the length and a little wider than the traditional MRI machine. Gunnison Valley Health CEO Randy Phelps said that’s a “great advancement” that will be less confining and more comfortable for patients.
Along with the imaging center, the addition will also house a new medical laboratory and—what people entering the hospital will notice first—a new, glass-enclosed patient registration area.
Phelps said the addition and remodeling wouldn’t just make the hospital easier to get around in, it will also make the building safer.
“One of the things that was a key feature [in the design] was to be able to have the CT scanner closer to the ER and x-ray, so patients don’t have to go so far to the ER or to get x-ray,” Phelps said. “That makes it safer and then the outpatient configuration will centralize all of that and make it more convenient.”
The new wing where all of the imaging equipment will be housed is planned for the northeast side of the building, and is scheduled to take as long as 18 months to complete.
Phelps said the third, and final, phase of the GVH building expansion likely wouldn’t start for at least a few years and move to the east, toward the Western State College campus. The new space would house physical therapy, occupational therapy, cardiac rehabilitation and possibly the hospital’s sleep study program, which could use the extra space.
He added, “Our thought is that the administration would move out of its current occupancy and this 1950s building that we’re in would be removed and we can restore this front part of the property.”
But Phelps said the hospital’s expansion isn’t just about taking up more of a position in the market, it’s about taking a better position.
“It is going to enable us to have state-of-the-art facilities for diagnostic imaging and the lab department,” Phelps said, “but certainly an overall motive is business. If you can have state-of-the-art equipment in a facility that will enable the patients to get the best care close to home, it can’t hurt.”
People visiting the hospital won’t see many changes in access if they go through the main entrance. Phelps points out, “Folks need to be cognizant of signage and directional info because there may be times when their normal route of access could be blocked, but we see the front entrance staying the front entrance, and ER will always have access.”
The hospital will host a groundbreaking ceremony Thursday, September 2 at 10:30 a.m.
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