Baystate Medical Center to Make Equipment Upgrades With MassDevelopment Lease
December 5, 2016
FOR IMMEDIATE RELEASE
Meggie Quackenbush, MassDevelopment, 617-330-2011 & 857-208-2777 (cell)
Brendan Monahan, Baystate Health
MassDevelopment has issued a $14,062,890 tax-exempt lease on behalf of Baystate Medical Center Inc. (BMC), a subsidiary of Baystate Health, Inc., a Springfield-based nonprofit health care system that serves western Massachusetts. BMC will use lease proceeds to build a roughly 5,000-square-foot cogeneration, combined heat and power plant that will provide electricity, chilled water and steam to the hospital’s facilities. TD Equipment Finance, Inc. is the lessor.
“In addition to providing essential health and wellness services to communities, medical centers like Baystate Medical Center play a crucial role in the Commonwealth’s economic vitality,” said MassDevelopment President and CEO Marty Jones. “MassDevelopment is pleased to help finance this essential equipment expansion, which will provide the center with the resources it needs to continue serving western Massachusetts residents.”
Baystate Health is a nonprofit health care system serving more than 800,000 people throughout western New England. With roots dating to the founding of Springfield City Hospital in 1873, Baystate Health has been providing skilled and compassionate health care in the Pioneer Valley for more than 140 years. Its facilities include BMC, an academic, research, and teaching hospital and the only Level 1 trauma center in western Massachusetts; Baystate Children’s Hospital; three community hospitals including Baystate Noble Hospital in Westfield, Baystate Franklin Medical Center in Greenfield, and Baystate Wing Hospital in Palmer; a network of more than 80 medical practices; Health New England, a health insurance provider; home care and hospice services; and comprehensive laboratory and diagnostic services.
“The combined heat and power plant is the crown jewel of Baystate Health’s strategic energy master plan. It will replace a 45-year-old power plant with innovative technology that will make our communities healthier by reducing greenhouse gas emissions,” said Sean Gouvin, Director, Facilities Planning and Engineering Operations at Baystate Health. “The new plant will save nearly $3 million each year in utility expenses and provide increased resiliency during emergencies.”
“We appreciate MassDevelopment’s efforts to facilitate this low-cost tax-exempt financing in a very timely and efficient manner,” said Dennis Chalke, CFO and Treasurer of Baystate Health.
MassDevelopment’s tax-exempt leases act as installment loans. An investor lends funds to the borrower to purchase equipment and complete any related renovations, and the borrower agrees to make periodic fixed-rate payments. Generally, the borrower leases the equipment for a length of time approximating the useful economic life of the equipment. At the end of the lease term, the borrower typically pays a nominal amount and assumes ownership of the equipment.
MassDevelopment, the state’s finance and development agency, works with businesses, nonprofits, financial institutions, and communities to stimulate economic growth across the Commonwealth. During FY2016, MassDevelopment financed or managed 352 projects generating investment of more than $4 billion in the Massachusetts economy. These projects are projected to create about 8,200 jobs and build or rehabilitate about 4,200 residential units.