CLEVELAND, Ohio - The MetroHealth System on Thursday announced it sold $945.7 million in hospital revenue bonds for a campus transformation that will include a new 12-story hospital with 270 private rooms, central utility plant, parking garage and several other projects.
In March, the hospital system's board of trustees unanimously approved a plan for MetroHealth to self-issue up to $1.3 billion of bonds to pay for the transformation plan. No taxpayer money will be used for the project.
Earlier this month the hospital system priced the tax-exempt bonds, and the highly competitive issuance resulted in an interest cost of 4.997 percent. The hospital system had expected interest to be as high as 5.5 percent, so saved about $50 million on the lower rate.
Cuyahoga County is supporting the project and is obtaining one or more letters of credit from a bank or banks to create a debt reserve fund of $82 million, which otherwise Metro would have been required to establish when selling bonds for the project.
The reserve fund will cost the county $350,000 annually but will save MetroHealth up to $160 million on the total cost.
MetroHealth is in the process of selecting a master architect of record for the campus transformation and a construction Manager at risk for the new parking for up to 1,500 vehicles.
The board of trustees will approve the firms at its June board meeting. MetroHealth plans to start building the parking garage at the end of summer.
The campus transformation was unveiled in 2014. The first phase started in 2015 with the demolition of the Northcoast Behavioral Health Care Facility and the construction of the $82 million, two-story addition to the existing Critical Care Pavilion, which opened in July 2016.
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