Rio Rancho Developments

11-14-2008





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Friday, November 14, 2008

Hospital Stays on Schedule
By Rosalie Rayburn Journal Staff Writer

Presbyterian Healthcare Services says the construction timetable for its Rio Rancho hospital remains on target despite a market-related change in its financing arrangements. Albuquerque-based Presbyterian planned to sell $230 million worth of bonds this fall to finance the 121-bed hospital in southwest Rio Rancho. That deal is now on hold until at least March, said Presbyterian's chief financial officer Paul Briggs in a phone interview on Thursday. He said the delay will not affect the hospital project. Instead, Presbyterian will use money from its cash reserves to keep site work on the Rio Rancho hospital moving ahead while it waits for market conditions to improve and interest rates to come down. “We are moving on at the pace we anticipated,” Briggs said. Planning, design and site preparation are under way, construction is slated to begin in the first quarter of 2009 and the opening is still on schedule for late 2010, Briggs said. Market turmoil — which has driven up bond interest rates from the 5.3 percent to 5.5 percent range to around 7.5 percent — prompted Presbyterian to change its financing strategy, he said. Presbyterian plans to re-evaluate market conditions in the first quarter of next year and hopes to sell the bonds in March or April, he said. The nonprofit health services organization typically uses bonds issued for a period of 25 to 30 years to finance large-scale projects. It can also tap reserves, invested for shorter periods in a mix of bonds and equities, to finance projects such as the Rio Rancho hospital, he said. Presbyterian held a ceremonial groundbreaking for its hospital in August. The institution is located on a 50-acre site near Unser and Black Arroyo. The University of New Mexico is also planning to open a 75-bed hospital in 2010. UNM's hospital will be adjacent to a campus it will build in downtown Rio Rancho. Presbyterian and UNM have said they will use their own financing for construction but they lobbied for a mil levy help expand the services they will offer when the hospitals open. Voters in Sandoval County last week approved creating the 4.25 mil levy to help pay for the health care services. The mil levy will raise the annual property tax on a home with an assessed value of $100,000 by $141.66 beginning in 2009.
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