October 23, 2002
HUD INSURES EXPANSION & RENOVATION PROJECT FOR ST. BARNABAS HOSPITAL IN THE BRONX, NEW YORK
WASHINGTON - The U.S. Department of Housing and Urban Development
today announced approval of a $68.5
million increase to St. Barnabas Hospital's existing $41 million FHA-insured mortgage. The additional borrowing will address the hospital's strategic needs and improve access to healthcare in its service area.
"St. Barnabas is a 'safety net' hospital for the community serving
numerous medically underserved and high poverty areas," explained
Assistant Secretary for Housing-Federal Housing Commissioner John
C. Weicher. "The majority of
its inpatient admissions come through the emergency room, which indicates a severe shortage of primary care providers in the service area."
The loan will allow the hospital to renovate and expand the existing emergency room; build a five-story addition providing expanded space for surgical, ancillary, and educational programs; and add improvements addressing other needs.
The FHA insurance enables the hospital to borrow at a lower interest
rate than it would pay without insurance. Goldman Sachs, the hospital's
investment banker, estimates that the FHA insurance will save the
in annual debt service, or $19.86 million over the 25-year life of the loan.
St Barnabas Hospital is a 461-bed, non-profit, teaching hospital
affiliated with: the Weill Medical College of Cornell University,
the New York Presbyterian Hospital and the New York Presbyterian
Healthcare Network, and the College
of Osteopathic Medicine of New York Institute of Technology.
It provides a full array of inpatient and outpatient services for local residents. Over 87 percent of inpatients are covered by Medicaid or Medicare. Its annual revenues exceed $260 million and it has more than 2,000 employees, making it one of the top employers in the Bronx. It is estimated that the construction contracts to be financed with the mortgage increase will produce 270 jobs.
The hospital's loan is insured under HUD's Section 242 program. The Section 242 program currently insures approximately 60 loans in 10 states and Puerto Rico, with a total value of $3.8 billion. Since the program began in 1969, HUD has written more than $9 billion of insurance for more than 300 hospitals in 41 states and Puerto Rico.
HUD is the nation's housing agency committed to increasing homeownership,
particularly among minorities, creating affordable housing opportunities
for low-income Americans, supporting the homeless, elderly, people
with disabilities and people living with AIDS. The Department also
promotes economic and community development as well as
enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.