Community Hospital officially celebrated refinancing its $ 65 million loan on Saturday with officials from the Housing and Urban Development Department and U.S. Senator Cory Gardner.
Through a Federal Housing Administration mortgage insurance commitment, the hospital was able to lower its interest rate from 8.75% to 2.95% and borrow an additional $ 19 million to add one. new operating room and install a new medical records system. The Gershman mortgage was the lender.
“It’s a really exciting time and an exciting collaboration between us and the HUD,” said Community Hospital President and CEO Chris Thomas. “It’s a great year for the Grand Valley.”
Community Hospital is receiving the first firm commitment to the HUD Section 242 Mortgage Insurance Program in the nation which is used to refinance healthcare facilities in an area of opportunity.
Areas of opportunity were included in the 2017 tax reform bill as a way to stimulate long-term investments in disadvantaged areas where a higher percentage of residents live in poverty. The areas offer tax relief on capital gains.
Gardner was part of a bipartisan group that sponsored the inclusion of the zones in the tax bill. Colorado Senator Michael Bennet was also a sponsor.
“This is a large chunk of money in western Colorado,” said Gardner. “Our communities are successful as long as we have the fundamental pillars of our cities and healthcare is an important part of it. Nice to see (areas of opportunity) in use. “
Roger Lukoff, deputy secretary at HUD for health care programs, said that the interest of the Community Hospital is the lowest he has ever seen for refinancing like this.
“We are very excited about the increase in community services and the reduction of healthcare costs,” he said.
The community is expected to close the loan in late March, Thomas said. The new operating room will open on March 15 and launch the new medical records system in early 2021.
HUD will continue to work with Community Hospital in the future and the organization will assist the hospital with future projects, such as building a new cancer center near the hospital, according to Thomas.
“They will be our banker and he is fantastic,” said Thomas.