(Source: AZCentral): Ken Alltucker – Banner Health is building a state-of-the-art teaching hospital at the former Good Samaritan Medical Center with the help of a $550 million revenue-bond issue approved this week by Maricopa County.
The county Board of Supervisors on Wednesday authorized the new bond issue with little discussion. Under terms of the agreement, Banner Health is obligated to repay the bonds.
The revenue bonds will be used to finance $325 million of the cost of the new 16-story patient tower now under construction at Banner University Medical Center Phoenix, located at 11th Street and McDowell Road in Phoenix. The tower should be completed by October 2018.
The Phoenix project, when built out, will include 256 patient beds, a new emergency department and trauma center, operating rooms and lab space, according to bond documents.
Another $225 million in bonds will pay to build, furnish and equip a nine-story tower at Banner University Medical Center in Tucson.
The two projects are part of Banner’s nearly $1 billion investment in clinics and new teaching-hospital towers in Tucson and Phoenix, and offices for managers and department leaders at the Tucson hospital tower.
When Banner purchased the University of Arizona Health Network in 2015, it agreed to spend $500 million over five years on capital improvements in the Tucson area.
Brenda Schaefer, Banner’s vice president and treasurer, said the Maricopa County-approved revenue bonds will allow the Phoenix-based health-care system to finance the projects with lower borrowing costs compared with other debt.
She said Banner, the state’s largest health-care system and private-sector employer, might not use all of the $550 million authorized by the county. Schaefer expects the bonds to close next month.
For years, metro Phoenix hospitals financed projects with revenue bonds through the Arizona Health Facilities Authority, which last year was folded into a separate entity under the Arizona Commerce Authority.
Banner and HonorHealth most recently pursued financing projects through Maricopa County’s Industrial Development Authority.
Maricopa County last month authorized $95 million in lease financing that will allow HonorHealth to purchase a new electronic health-records system, upgrade its oncology division and fund a hospital-observation unit, among other projects.
HonorHealth, created by the merger of the former Scottsdale Healthcare and John C. Lincoln hospitals systems, said it pursued the project to complete needed upgrades.
“We have made significant investments in our community, and we will continue to do so in the most fiscally responsible manner to best meet the needs of our patients,” HonorHealth said in a statement.