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[IMGCAP(1)]MIDDLETOWN, NY-The New York State Dormitory Authority and Orange Regional Medical Center have closed on $261 million in tax-exempt bond financing for ORMC’s new hospital being built at 707 East Main St. here.

Extensive site clearing work has already commenced for the new 374-bed facility being built at a 61-acre site just off Route 17. ORMC officials report the deal recently closed with the Dormitory Authority and the agency has issued the 30-year bonds that carry an average interest rate of 6.3%. The senior underwriter for the bonds was Merrill Lynch & Co.; JP Morgan and Morgan Stanley participated as members of the underwriting group, hospital officials say. At press time no official groundbreaking date has been set for the project that has been estimated to cost $330 million to complete.

Commenting on the financing deal, ORMC chief financial officer Mitch Amado said, “Approximately 77% of the project costs are being funded through the issuance of these tax exempt bonds that can be repaid from the hospital’s annual operations. The balance of the new hospital construction costs will be funded from several sources including monies we currently have in the bank, philanthropy, state grants and proceeds from the sale of Orange Regional’s two existing campuses in Goshen and Middletown.”

[IMGCAP(2)]Last December the hospital finalized the sale of its Arden Hill and Horton campuses through a sale/lease back transaction with the Community Foundation of Orange and Sullivan Counties for $10 million. The $10-million purchase price was supported by a $4-million gift to the Community Foundation and a $6-million mortgage from the non-profit Gerry Foundation, Inc. The two organizations have been looking to sell the two hospital campuses, but to date, have not found a buyer. The sale of the two campuses was necessary due to New York State Department of Health requirements that called for ORMC to sell its existing hospital campuses before it would provide full state approval for the new hospital project.

When completed the new 600,000-sf hospital will be the largest medical center from the Tappan Zee Bridge to Albany. The project is the first of its kind in New York State in more than 20 years, ORMC officials say. Orange Regional has been awarded $48.6 million in HEAL NY grant funding through New York State to assist with project funding. The hospital plans to launch a public phase of its capital fundraising campaign for the new hospital this summer.

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