HUD No. 08-186
December 16, 2008
HUD APPROVES $777 MILLION DEAL TO CONSTRUCT 223-BED HOSPITAL AND MEDICAL OFFICE BUILDING IN HOPEWELL TOWNSHIP, NEW JERSEY
Capital Health System to replace aging Mercer Medical Center, expand Fuld Hospital
WASHINGTON - The U.S. Department of Housing and Urban Development today made a commitment to insure a loan to Capital Health System (CHS) in Trenton, New Jersey to construct a new 223-bed hospital in Hopewell Township, New Jersey to replace the existing Mercer Medical Center. The $777 million loan is made possible through the Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program.
In addition, the system's Fuld Hospital will create two new medical-surgical units and provide space to accommodate services transferred from Mercer. By insuring the mortgage loan, FHA enabled Capital Health System to obtain a lower cost financing, saving the hospital an estimated $487 million in interest payments throughout the life of the loan.
"After many years of determination and planning, community leaders will finally be able to bring a new state of the art medical center to Hopewell Township." said Brian Montgomery, HUD's Assistant Secretary for Housing/Federal Housing Commissioner. "By lowering the cost of credit for Capital Health System, FHA will allow the company to use more of its resources to do what it does best - making people healthier."
"The support from HUD will enable us to bring to this region the finest healthcare facilities and most advanced medical care available," said Al Maghazehe, CEO & President of Capital Health System, who also noted that this is the largest hospital project ever to be endorsed by HUD. "We are proud that we met HUD's high financial standards for approval and are pleased to partner with them on this important project."
The CHS construction project will create 4,767 full-time jobs and provide an economic stimulus of $1.7 billion during the construction period. Once completed, the new Mercer Medical Center will support an estimated 2,209 jobs in the hospital and surrounding community, and provide an annual economic benefit of $424 million.
FHA's Section 242 Mortgage Insurance Program for Hospitals provides HUD-insured mortgages made by private lending institutions to finance construction or renovation of acute care hospitals including major equipment needed to operate the facility. The eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.