CAMC board OKs use of private loans for center
The Charleston Area Medical Center board of trustees voted Wednesday to seek proposals from local and national banks for up to $50 million in loans to help finance the hospital system's new cancer center.
The vote allowed CAMC to send requests for proposals to all major local banks, along with a few national banks, to see if they are interested in loaning the hospital system money.
Larry Hudson, CAMC's chief financial officer, said the hospital system is pursuing a private loan instead of public bonds because "it's cheaper, it's faster, it's less bureaucratic."
He said borrowing money through the sale of bonds would require the CAMC to use investment bankers and pay their expenses.
Hudson said he hopes to have all responses to the hospital system's proposal requests before the board's December meeting, so the hospital can get moving if it needs to sell bonds. It's best to sell bonds while CAMC's end-of-the-year audit is still current, he said.
Only the board's executive members, its officeholders and committee chairmen meet at CAMC's December meeting. Other board members voted Wednesday to give the executives authority to vote on the proposals on their behalf.
Hudson said there is a 50-50 chance the hospital will take out a private loan instead of public bonds. The hospital will get the money either way.
"The endgame is the same whichever route you take," he said.
Earlier this month, CAMC reported nearing its private fundraising goal on the project by accounting for $12 million of the $15 million the foundation hoped to raise privately.
CAMC's foundation has been seeking donations from the public through its "Power of Many" campaign.
The foundation hoped to close the fundraising campaign by Dec. 31.
The center will cost $39 million in all. The hospital system would foot the bill for the remaining $24 million - although the loans would give the system some flexibility.
The hospital plans to break ground in January at the site of the old Watt Powell Park in Kanawha City.
Construction is expected to take 18 months, with the building opening its doors in 2014.
Plans for the center are completed and expected to be released soon.
Some preparation work for the new cancer center is under way. Crews are working on MacCorkle Avenue near the 35th Street Bridge. They are installing a turning lane in the median that will be the westbound entrance to the cancer center.
The new facility will replace CAMC's current David Lee Cancer Center on its Memorial Hospital campus. That center has reached its maximum capacity and needs more space.
The new building will feature a garden, cafe and seating areas designed to look more like living rooms than waiting rooms. The center also will feature something CAMC's current campuses do not: free parking.
Also at Wednesday's meeting, board members voted to refinance a $23.5 million loan CAMC took out in 2008 to purchase Teays Valley Hospital. Board members extended the loan up to six years.
Hudson said the loan was only a short-term "balloon note" that had reached the end of its term. The hospital either had to refinance or pay $23.5 million.