Richmond County economic developers have given AU Medical Center tacit approval to borrow up to $75 million through a bond issue, allowing the hospital to refinance existing debt and build an infectious disease clinic near the downtown campus.
The Development Authority of Richmond County on Thursday approved an “inducement resolution” to issue revenue bonds that AU Medical Center says will help retire debt it took out in 2012 to renovate the former School of Dentistry building at the corner of 15th and Laney Walker Boulevard.
AU Medical Center Chief Financial Officer Greg Damron said at the meeting that refurbishment of the four-decade-old facility, now known as “Professional Building 1,” has created more space for the university-affiliated health system’s kidney/pancreas transplant program as well as house the new Digestive Health Center. The $40 million project also created at the hospital a “hybrid operating room” for advanced cardiothoracic and vascular procedures that Damron said “are badly needed in our community and provide a great opportunity for medical training for our students and residents.”
Some of the proceeds would be used to relocate the medical center’s Infectious Diseases Clinic from inside the main hospital to health system-owned property on Chafee Avenue. “Which actually will make it better, more convenient to the community it serves,” Damron said.
The clinic runs the health system’s Ryan White HIV/AIDS program, one of the largest of its kind in the state.
AU spokeswoman Haley Hughes said the clinic would be built on land currently occupied by a mobile office that houses finance department personnel.
Development authority bond issues are primarily used as an economic development incentive to attract large companies to the county. Using the authority as a conduit, the bonds enable companies to seek attractive financing terms and obligates the borrower – rather than the county and its taxpayers – to repay the debt.
Authority Attorney Robert Hagler said he was contacted by AU Medical Center about doing a bond issue last week. The authority board unanimously passed the inducement resolution on his recommendation. The resolution would get a final reading and approval at the authority’s next called meeting.
“We are delighted to continue our relationship with the university,” Authority Chairman Henry Ingram said. “It’s been a significant relationship.”
AU Medical Center’s credit rating with Standard & Poor’s is A-. Its rating with Moody’s Investors Service is A2. Both ratings are considered to be in the upper-medium range of investment grade debt securities.
The health system reported long-term debt of $178.6 million for the six-month period ending Dec. 31.
Reach Damon Cline at (706) 823-3352 or email@example.com