Financing in Place for Hospital in West Maui
/By BRIAN PERRY - City Editor, The Maui News
Financing has been secured for the long-awaited West Maui Hospital and Medical Center, clearing the way for California-based developer Brian Hoyle to seek land entitlements and government permits for the project.
"We don't have the money in the bank," said Hoyle, Newport Hospital Corp. president, in a telephone interview late last week. But for a $45 million to $50 million project, it's not unusual for the loan to be funded shortly before construction begins, he said, adding that he has a commitment from an unidentified global real estate investment trust with access to "many billions" of dollars that finances projects worldwide.
The trust will be "financing all of our needs," Hoyle said.
The project's financing plan is a sale-leaseback arrangement, which Hoyle said is a "common financing" strategy in which the independent investor owns the real estate and then leases it to the operator of the facility.
In the West Maui hospital's case, its operator would be the West Maui Hospital Foundation, formed in April, and the manager of the acute-care hospital would be Critical Access HealthCare LLC.
"This plan, together with the recent formation of the West Maui Hospital Foundation, encapsulates the continued promise to the community to provide a 'center of excellence' in acute health care with a 24-hour emergency room to West Maui," an announcement from Newport Hospital Corp. said.
No new hospitals have been built on Maui since the Central Maui Memorial Hospital was built in 1952 in Wailuku, Hoyle said. Its name changed to Maui Memorial Hospital in 1963 and to Maui Memorial Medical Center in 1998.
The last hospital built in the state was the North Hawaii Community Hospital in 1995 at Kamuela on the Big Island, he said.
In March 2009, Newport Hospital Corp. received a certificate of need from the State Health Planning and Development Agency for the establishment of a West Maui facility with 19 medical/surgical beds, six critical care beds, 40 skilled nursing beds, an emergency room, operating room, a diagnostic radiology department and other, including outpatient, services.
The capital costs were projected to be nearly $45.8 million.
Facility plans also include a 30,000-square-foot medical office building, Hoyle said.
After exploring a number of locations, the hospital developer plans to locate the facility on 14.99 acres in Kaanapali off of Kakaalaneo Drive, mauka of Honoapiilani Highway. Hoyle said that the property is zoned agricultural and will need to be rezoned for public use.
If all goes according to plans, construction work could begin in early 2015, with the hospital completed in 15 to 18 months, or mid to late 2016, he said.
* Brian Perry can be reached at bperry@mauinews.com.