City of Troy, hospital to take final steps this week

Published 12:00 am Tuesday, December 22, 2009

The Troy City Council is set to take the final steps this week that will leave the hospital assets in the city’s hands.

After close to two years of the city backing Troy Regional Medical Center owners — a group of 14 local physicians and investor Gil McKenzie — the city will take ownership of the hospital property this week.

This plan was announced in September, and once final, the city of Troy will essentially be the landlords of the hospital, leasing the property back to Troy Doctors Hospital, LLC.

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The doctors group will continue operating the hospital as is under this plan.

But, what this will mean is if the group defaults on payments at any time, the city will take full ownership of the hospital, including operations.

“What will happen tomorrow is documents will be singed between the city of Troy, the city of Troy Healthcare Authority, Troy Doctors Hospital and Troy Bank & Trust Company,” said Troy Mayor Jimmy Lunsford.

The city’s health care authority will be the entity through which the real estate loans are issued from Troy Bank & Trust.

“The property, furniture, fixtures, all things necessary to run a hospital will be transferred to Health Care Authority owners,” Lunsford said.

“At the same time, there will be a leasing agreement, leasing those same assets back to the Troy Doctors Hospital.”

Lunsford said the doctors group will pay the full loan amount back to the city, which will be $11.5 million.

This agreement is set for five years, Lunsford said. Once it ends, the doctors will either continue long term financing with the city or find a new lending institution.

“I would anticipate within a couple of years, knowing exactly where we’re going,” Lunsford said.

“If Troy Doctors hospital is still operational and wants the city to issue long term bonds, we would.”

The Troy City Council will meet today at 5 p.m. in Troy City Hall.

The meeting is open to the public.