|HUD No. 12-087
May 24, 2012
NEW VASCULAR INSTITUTE OPENS IN BUFFALO WITH HELP OF $100 MILLION FHA-INSURED MORTGAGE LOAN
Kaleida Health launches state-of-the-art cardiac care facility next to Buffalo General
WASHINGTON - Kaleida Health today held the grand opening of its new Gates Vascular Institute in Buffalo, New York. The new facility's construction was financed by $100.3 million mortgage made possible through the Federal Housing Administration's (FHA) Section 241 Supplemental Mortgage Insurance Program.
"FHA is helping to build state-of-the-art health care facilities all across the country," said Acting FHA Commissioner Carol Galante. "By lowering the cost of credit, FHA is helping Kaleida Health and other health care systems to use more of their resources to provide quality medical care and create jobs."
The FHA-insured mortgage loan financed the construction of the new 478,000-square-foot, 10-story, Gates Vascular Institute facility adjacent to Kaleida Health's Buffalo General Medical Center. The building connects to the hospital lobby and includes a new emergency room, 62 extended recovery bays, seven operating rooms, 16 cardiac care unit beds, 15 cardiac catheterization/angioplasty labs, and support space. The new facility also houses research and development facilities, including four floors owned by the State University of New York-Buffalo (UB) for its Clinical and Translational Research Center and a Biosciences Incubator.
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. The total cost is approximately $300 million. Kaleida Health, UB, and grants from New York State provided about $200 million for the project.
By insuring the mortgage loan, FHA enabled Kaleida Health to obtain lower cost financing, saving the system an estimated $40.8 million in interest expense over the life of the loan.
"In helping to make projects like this possible, FHA is not only improving the community's health care, it is also contributing to the area's financial well-being by creating jobs and supporting local economies," said Acting Commissioner Galante.
HUD estimates this construction project created more than a thousand full-time jobs and provided an estimated economic stimulus of almost $270 million to the community. Now that it is completed, it is estimated the project will provide an annual economic benefit of approximately $217 million and support more than 700 jobs throughout the community. HUD's estimates are based on results from an economic model used by public and private institutions to examine a variety of economic development issues.
Kaleida Health is a non-profit, fully integrated, multi-hospital healthcare delivery system located in Buffalo and surrounding suburbs. It operates four hospitals and several other wholly owned subsidiaries and two charitable foundations. Kaleida Health has five existing FHA-insured mortgages totaling $324 million through the Federal Housing Administration's (FHA) Section 242 Hospital Mortgage Insurance Program.
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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