$330M Hospital Plan Progresses

At a press briefing held at the center's Horton Hospital campus in Middletown recently, Wayne Becker, vice president of special projects for Orange Regional, discussed the project's status and showcased the latest architectural design elements of the 374-bed facility that will total 621,000 sf. Becker said the new seven-story Orange Regional Medical Center, to be built on a 61-acre site off East Main Street in Middletown, will have hard and soft construction costs that will account for $255 million of the overall project price tag.

Orange Regional currently operates two hospitals within eight miles of each other--the Arden Hill campus, which is a licensed 174-bed facility in Goshen, and the 276-bed Horton campus. The hospital will eventually consolidate hospital operations into the new facility and is in the midst of trying to sell its existing Arden Hill and Horton campuses to help defray development costs. The Horton campus is the largest hospital in Orange County, while Arden Hill is ranked third. Orange Regional also operates 12 outpatient facilities and recently opened a new 80,000-sf addition to its Orange Regional Medical Pavilion on Crystal Run Road in Middletown.

Becker said that the staff of Orange Regional has worked hard trying to come up with alternative uses for the Arden Hill and Horton campuses. Currently, the team is in discussions with two prospective buyers that are each interested in purchasing one of the available hospital properties. Becker hopes that letters of intent will be signed on the deals by this October.

He notes the new hospital project is still in the approval process with the Town of Wallkill and has a number of other state and local regulatory hurdles to clear before the project can break ground. However, on the day of the press briefing, Becker said ORMC had received the certificate of need, a key approval for the new hospital venture, from the New York State Department of Health. The document came just a little more than six months after the application was first filed.

He added that significant progress has been made since the hospital first broached building a new hospital back in 2003. After working through schematic architectural designs, the hospital is now looking to finalize architectural design elements for the new facility.

"Now we are beginning construction documents, working documents for the project," he said. "I'm still targeting November 2007 to at least begin site work." Construction is expected to take 34 to 36 months to complete with a grand opening in 2011.

Arden Hill Hospital and Horton Medical Center merged in 2002 to become Orange Regional Medical Center. Since the merger, the hospital has focused on consolidating existing resources, eliminating redundancies, expanding services and improving access to necessary services, hospital officials state. The hospital has been successful in its efforts thus far, but was constrained by the age and physical limitations of existing facilities. Therefore, a decision was made to consolidate the two campuses onto a single site in a new replacement hospital.

Approximately 77% of the project cost will be funded through the issuance of $260 million in tax-exempt bonds to be issued by the New York State Dormitory Authority. Orange Regional Medical Center was awarded Heal (Health Care Efficiency and Affordability Law) grant funding through the New York State Department of Health totaling $24.6 million to assist with planning and construction. Other key funding sources include: approximately $18 million from Orange Regional Medical Center's existing equity; $10 million in proceeds from the expected sales of the existing two campuses; $21 million from private fundraising efforts and $2.9 million from "other" sources.

At present the significant fundraising campaign has yet to begin. The medical center has held discussions with the New York State Dormitory Authority regarding bond financing but has not to date filed a formal application.