A closer look: Lee County Medical Center proposed funding

A closer look: Lee County Medical Center proposed funding
The funding plan is laid out in the CON application (Source: WALB)
The majority of the project will be paid for by revenue bonds (Source: WALB)
The majority of the project will be paid for by revenue bonds (Source: WALB)

LEE CO., GA (WALB) - Proponents of the proposed Lee County Medical Center are still waiting to hear the fate of the project's Certificate of Need application.

In the meantime, WALB is finding out more information on the plan to pay for it.

Revenue bonds will be issued to fund construction and development, but, of course, they would not be needed, if the Georgia Department of Community Health denies the hospital's Certificate of Need in several months.

Once a golf course, the land on Grand Island Drive may one day have an around $130 million hospital sitting on it.

About 38 percent of the funds needed to transform the unassuming spot will come from commercial loans.

As for the rest, Lee County Commissioners approved and directed the Development Authority to create around $77 million-worth of revenue bonds.

Those bonds would then be bought by someone or a company.

"I see our participation level at more like 60 percent, than the requirement of 20," Lee Co. Commissioner Rick Muggridge said. "So, it far exceeds the state requirement."

Those bonds would be paid back to the Development Authority as the project made revenue, and operators paid a rent on them.

"The entity will buy all of the bond and they'll be the single bond holder," Muggridge said. "We'll pay them back through the rents created by the operating company."

Those projected revenues are a big part of what Albany State University Professor Dr. Abiodun Ojemakinde said will determine the risk and value of the bonds.

"The most important thing, among all the factors, is the likelihood of that particular project generating enough revenue to pay for the bond that is going to be issued," Ojemakinde said.

But, if the project fails, both Ojemakinde and Muggridge said that the loss would fall on the bond holder, who, in this case, would most likely be someone close to the project.

"They probably will be privately placed with one of our partners, as part of our whole operation, that has expressed an interest that is willing to extend the money," Muggridge explained.

Ojemakinde said failure to repay revenue bonds wouldn't have an initial direct impact on tax payers but could hurt them in the long run.

"If the project should fail, and the municipal government is unable to pay the bond that is issued, that goes into the future rating of the municipality," Ojemakinde said.

Ojemakinde added that rating determines how much money a government can raise for future projects. 

But, for now, the project is far from hypothetical success or failure, as it waits for state approval.

Muggridge said the building and land would be owned by the development authority but operated by a company called Surgical Development Partners.

They would work with others to develop the land and run the hospital. Surgical Development Partners would eventually take over ownership of the property once the bonds are paid off about 15 years after they're issued.

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