|HUD No. 09-196
October 5, 2009
HUD APPROVES $130 MILLION DEAL TO FINANCE EXPANSION AND RENOVATION OF HOSPITAL IN CAYEY, PUERTO RICO
WASHINGTON - The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Mennonite General Hospital in Cayey and Aibonito, Puerto Rico, to expand and renovate its Cayey campus. The $129,966,100 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 Mennonite General Hospital to use more of its resources to provide quality medical care."
The project entails construction of 144,018 square feet of new space, 40,302 square feet of renovated space, and a parking garage. The new space will add 61 beds to the existing 155 beds for a total complement of 216 beds on the campus.
The project's additional space will also allow replacement and expansion of the existing emergency department; a designated pediatric emergency area; new and expanded outpatient surgery facilities; expansion of the radiology department; a new birthing center with a Neonatal Intensive Care Unit; renovation of the vacated areas for nursing administration; outpatient cardiology; expansion of the holding and recovery area for surgery; and new space for the addition of five intensive care patient rooms.
By insuring the mortgage loan, FHA is enabling the hospital to obtain lower cost financing, saving an estimated $38.7 million in interest expense over the life of the loan. Mennonite General Hospital, Incorporated is a not-for-profit acute care hospital constructed in two divisions, MGH-Cayey and MGH-Aibonite, each consisting of an acute care hospital campus.
The new construction at the Cayey campus will enable the hospital to provide services in modern space and to maximize the efficiency of patient care. The facility is currently functioning at a very high occupancy rate. The nearest competing hospital is located 13 miles away across mountainous terrain.
HUD estimates this construction project will create 562 full-time jobs and provide an estimated economic stimulus of $208.3 million to the community. Once completed, it is estimated the project will provide an annual economic benefit of approximately $48.2 million and support 507 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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