Tax credit funding to aid new hospital
Tuesday, October 30, 2012 1:00 PM
A resolution authorizing a newly-formed public improvement corporation to "ground lease/lease back" the county hospital building project to take advantage of federal and state tax credits was passed last week by the Neshoba County Board of Supervisors.
Construction on a new $19 million county hospital is about 46 percent complete. The new two-story hospital is expected to open in spring 2013. The project will be funded by a CAP loan, New Markets Tax Credits and hospital reserves.
The resolution authorizes a non-profit Neshoba County Hospital Public Improvement Corp. to "ground lease/lease back" the $19 million hospital building project.
Taking advantage of federal New Markets Tax Credits and state Equity Investment Tax Credits, the new facility is expected to open in spring 2013.
The formation of the PIC was necessary to obtain up to $5.4 million in tax credits, which are not available for government and for-profit entities.
The PIC changes nothing about the administration, management or ultimate ownership of the hospital, officials have said.
The corporation will pay the interest and fees on up to $5.4 million in funds for a seven-year period. After that, the debt will be forgiven.
The net benefit is about $4 million for the project.
The remainder of the hospital project will be funded with a $4 million CAP loan through the Mississippi Development Authority and cash reserves from the hospital.
The new hospital, which is about 46 percent complete, includes a new two-story, 52,000 square foot building adjacent to the existing emergency department.
The new facility will house a new emergency room; a four-bed intensive care unit; 25 state-of-the-art patient rooms; a new radiology department; new surgery suite and a new pharmacy.
Workmen are currently setting up the HVAC equipment on the roof of the new structure. Plans call for the exterior sheathing and waterproofing barrier to be completed by the end of October. The roofing with the exception of flashing, trim and gutters was also expected to be completed by the end of the month.
About 50 percent of the outside brick veneer has been completed. The interior framing on the first and second floors remains ongoing.
In an unrelated project, a $1.8 million HVAC project for the older portions of the county nursing home is about 99 percent complete. This project, which is being funded by a state Community Development Block Grant and hospital and nursing home reserves, also includes a new generator for the older portions of the nursing home.
The Board of Directors of the new Public Improvement Corp. include: Hospital Administrator Lonnie Graeber, County Administrator Benjie Coats, former trustee Marvin Page, hospital chief financial officer Tim Thompson and former Chancery Clerk Larry McMillan.
The New Markets Tax Credit Program was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities.
The NMTC program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investment in qualifying projects.
The credit totals 39 percent of the original investment amount and is claimed over a period of several years (5 percent for each of the first three years and six percent for each of the remaining four years).