By BRADEN LAMMERS
CLARK COUNTY —
Clark Memorial Hospital and the River Ridge Development Authority offered a compromise to the Clark County Commissioners for more than $13 million in bond allocations.
As part of the American Recovery and Reinvestment Act, Indiana counties were offered Recovery Zone Economic Development bonds — which are a public designation — and Recovery Zone Facility Bonds — which are a private designation — with a 45 percent rebate on the interest rate received from a lender. Receiving the rebate essentially discounts the interest rate on the bond, allowing the total payment over the life of a 20-year bond to be substantially reduced.
The compromise that was presented to the commissioners granted the bulk of the bond allocation to the hospital, at least initially. Designation of the $7.9 million private bond will go to the hospital and the $5.4 million public bond will be split between River Ridge and Clark Memorial. The hospital is set to receive $2 million of the public allocation with the remainder of the funding going to River Ridge.
Thursday’s requests were somewhat of a switch from what had been presented at the commissioners’ previous meeting. Jerry Acy, executive director at River Ridge, had requested the full allocation of each bond, plus an additional $2.8 million for each type of bond from the state. While it was initially believed that there may be additional funding through the state because other counties had not attempted to use the bonds, no additional money is available.
“There is no more additional money beyond what the allocation ... included in the resolution,” said Robert Bottorff, who was acting as the commissioners’ attorney.
River Ridge had requested the funding for road, sanitary sewer and electricity improvements, as well as to help finance the construction of two buildings in the River Ridge Commerce Center. One structure is a 705,000-square-foot industrial building that would sit on 37 1/2 acres and is projected to cost $23 million. The second building is a 23,500-square-foot structure in front of Nu Yale’s property on two acres and would cost $2.8 million.
“Right now, the private use I can use easier than [River Ridge],” said Martin Padgett, president and chief executive officer at Clark Memorial Hospital. “The public [bond] we can both easily use.”
Financing received by the hospital would be split between multiple projects, depending on the type of bond allocation.
“Buying assets within the hospital that are typically nonprofit uses doesn’t qualify for that [private] money,” Padgett said.
Public monies are slated to be used for a vascular lab and a Magnetic Resonance Imaging machine. The private bond money will go toward facility improvements, medical office buildings and possibly to a master facility plan to convert 241 beds to private rooms.
“It certainly would qualify,” said Padgett of the private financing.
While there is no timeline on construction or completion of the plan to convert the hospital’s beds to private rooms; construction on at least one of the aforementioned projects will start next year, he said.
How much work is started may be determined by the amount of funding River Ridge requests from the hospital. As part of the compromise, Clark Memorial is willing to forfeit some of the private financing to River Ridge if it is requested.
“Right now, he doesn’t have a use for that,” Padgett said of Acy. “However, if [Acy] comes up with a project prior to Oct. 31, we would split that [private allocation] as well.”
The agreement for the private bond would split the funding in the same manner it was for the public allocation.
River Ridge received about 60 percent of public financing available, so if Acy presented a plan to Clark Memorial, the former Indiana Army Ammunition Plant could be designated between 40 and 50 percent of the private money.
The share that could be allocated to River Ridge would be $3.16 million to $3.95 million.
A lack of the private funding to aid in the construction of the new buildings will not necessarily change the plans at the commerce center.
“That financing was not a part of their original interest in building the facilities,” Acy said of the two proposed structures.
Plus, the deadline has not passed.
“If we want to take advantage of it, we can go back to the hospital,” Acy said.
The commissioners readily accepted the plan presented Thursday.
“We appreciate the compromise,” said Commissioner Ed Meyer.
To designate the funding, the commissioners unanimously passed two resolutions.
Resolution 9-2010 designated Clark county as a recovery zone as required to be able to issue the bonds and resolution 10-2010 allocated the bonds. Both bonds have to be closed on by Dec. 31.