Newburyport Hospital Gets $22.5 Million Bond to Expand
January 3, 2011 : Gloucester Times, by Dave Rogers
Hospital Receives Tax-Exempt Loan Through State Program
NEWBURYPORT – Thanks to a $22.5 million bond from the state, Anna Jaques Hospital is set to begin the new year by embarking on a $15 million renovation project that will include construction of new patient rooms and renovations to the outpatient surgery suite.
The $22.5 million tax-exempt bond was acquired from MassDevelopment, the state’s finance and development authority, on Dec. 14 through TD Bank, hospital officials announced yesterday.
The hospital will use $10 million to pay off older bonds, while $12.5 million will be put toward three renovation projects: the rebuilding of the hospital’s power plant, renovations to the outpatient entry area and the creation of 18 private patient rooms, according to Mark Goldstein, the hospital’s executive vice president.
“Our goal is to give our patients a private-room experience,” Goldstein said, adding that private rooms have become a standard feature of hospital care.
The renovations, which also include the expansion of the hospital’s pediatric department out to a roof terrace and lounge area, are part of a strategic plan that kicked off more than five years ago. As part of the plan, patients were asked what they would like to see the hospital change for the better. Shorter waits in emergency rooms and private inpatient rooms were two of the most common responses.
Goldstein said the bond also solidifies the future of Anna Jaques Hospital in Newburyport and ensures continuous service to the 16 other Merrimack Valley communities that depend on the 123-bed hospital.
“It’s not just a good day for Anna Jaques, but it’s a good day for our patients,” Goldstein said.
The remaining $2.5 million for the renovation project was raised through the hospital’s $15 million capital campaign, which kicked off last summer, with the Institution for Savings based in Newburyport donating $1.5 million. In appreciation of the bank’s generosity, the new hospital unit housing the additional 18 inpatient surgical rooms will be named after the Institution for Savings.
In November, the Newburyport City Council authorized a special permit to Anna Jaques Hospital for the project. Work on the project is expected to start this spring and take 18 months to complete. It has been predicted that renovations will create 10 jobs.
Goldstein said Anna Jaques officials, with the help of MassDevelopment, secured a fixed-interest rate of 4.25 percent over the life of the 15-year bond. As part of the terms of the loan, Anna Jaques will be paying TD Bank directly, similar to the payback of a home mortgage loan.
Goldstein said the bond is a highly rated private-placement bond, meaning TD Bank will be holding on to the bond, as opposed to selling it to another lender. Lenders typically retain private-placement bonds because they feel borrowers are in good financial shape.
As for MassDevelopment’s role, spokeswoman Kelsey Abbruzzese said the state acted as a conduit between the bank, which purchased the loan, and Anna Jaques. The tax-exempt financing provided by the state allows Anna Jaques to benefit from better loan terms.
MassDevelopment offers its tax-exempt loan program to universities, health care centers, manufacturers, and other businesses and nonprofits they feel benefit Massachusetts residents, Abbruzzese said.
Hospital officials stressed that even with the bond, the capital campaign project will continue until $15 million is raised. In addition to the $1.5 million gift from the Institution for Savings, the campaign has raised $4.5 million so far, said Rich Napolitano, vice president of development and executive director of the Anna Jaques Community Health Foundation.
Napolitano said the current gift phase of the campaign will end sometime in March and will be followed by separate fundraising campaigns focusing on different communities. It is hoped the campaign will be completed in 18 months.
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