|HUD No. 09-191
September 30, 2009
HUD APPROVES $100 MILLION DEAL TO CONSTRUCT MAJOR ADDITION TO BUFFALO GENERAL HOSPITAL
WASHINGTON - The U.S. Department of Housing and Urban Development announced today a commitment to insure a mortgage loan to Kaleida Health to finance construction of a major addition to Buffalo General Hospital in Buffalo, New York. The $100,253,000 loan is made possible through the Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program.
"FHA is helping to build state-of-the-art health care facilities all across the country," said FHA Commissioner David Stevens. "By lowering the cost of credit, FHA will allow Buffalo General Hospital to use more of its resources to provide quality medical care."
The project will construct a new 478,000 square foot, 10-story, Global Vascular Institute facility on the Buffalo General Hospital campus. The building will connect to the Buffalo General Hospital lobby and include a new emergency room, 62 extended recovery bays, seven operating rooms, 16 cardiac care unit beds, 15 cardiac catherization/angioplasty labs, and mechanical and procedure support space. Four floors will be owned by the State University of New York - Buffalo (UB) to be used for medical research and biomedical start-up businesses. The total project cost is $243.3 million, of which Kaleida Health's portion is $173.3 million and UB's portion is $70.0 million.
The project was initiated to comply with the Berger Commission mandate to develop a new infrastructure that supports comprehensive heart and vascular services in a central location. A $65 million HEAL-NY grant will be used as a portion of Kaleida Health's equity contribution.
By insuring the mortgage loan, FHA is enabling Buffalo General Hospital to obtain lower cost financing, saving the hospital an estimated $40.8 million in interest expense over the life of the loan.
HUD estimates this construction project will create 1,092 full-time jobs and provide an estimated economic stimulus of almost $270 million to the community. Once completed, it is estimated the project will provide an annual economic benefit of approximately $217 million and support 784 jobs throughout the community.
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.
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