Hospital finances looking up
After months of seeking financing, Troy Hospital owners may be one step closer to securing the loan that will allow them continue ownership.
“I feel pretty comfortable they are going to make that happen, and that’s a good thing,” said Troy Mayor Jimmy Lunsford, after a meeting with board members Wednesday.
The city has already extended an agreement to back the owners twice in this year, but Lunsford said he feels more confident now their financing efforts will prevail.
“I’m more encouraged today than I have been at any point in time the permanent financing will be put in place,” Lunsford said.
The agreement between the city of Troy and Troy Doctors Hospital LLC, where the city is set to purchase the hospital at $10.5 million should owners no longer be able to afford financing, is set to end May 29. But, by the end of the month, the city has asked for a letter of intent from a lending institution.
And, Hospital Investor Gil McKenzie said he is confident owners will receive that letter in time.
“We are working with the bank, and the bank has indicated their willingness to refinance the existing debt and loan us additional money,” McKenzie said.
Lunsford said he anticipates the city will receive a letter from a bank before the next council meeting April 28.
“We have to see something where the bank is committed to putting the long-term financing in place, and I really anticipate having that,” Lunsford said.
Despite the optimism in securing a loan, Lunsford said the city and the owners have worked an agreement on how any transition of ownership would occur.
“We felt with the city, it was necessary to have that in place so in the unlikely event that they fail, it would be an immediate transition over to the city based on the option they have in place,” Lunsford said.
Lunsford said details of how everything would operate should the city become hospital owners are not laid out. The agreement essentially only says the city would pay off the $10.5 million loan and assumes operations.
“We’re just making sure there’s been clear understandings on both sides what’s involved in the transfer,” Lunsford said.
McKenzie said when owners do resubmit a request to the city, they will likely ask them to extend that support for five more years until the loan is paid. At a minimum, McKenzie said the request will be for one more year.