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Lindley Estes is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.

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Mary Washington Healthcare bond request sails through first stage

Mary Washington Healthcare’s proposal to issue $30 million in bonds through the Fredericksburg Economic Development Authority sailed through its first test this morning. The city’s EDA passed what’s called an “inducement resolution” supporting the proposed bond issuance this morning following little discussion. It was a marked contrast with the weeks of debate that surrounded Kalahari Resorts’ request earlier this year to issue bonds through the EDA.

The Fredericksburg EDA won’t consider MWHC’s request to lower its traditional fee on the bond issuance until its Dec. 13 meeting. MWHC has asked the EDA to lower its annual fee on the bond balance from 1/8th of 1 percent to 1/10th of 1 percent. The EDA receives the fee for issuing the bonds, which gives them municipal status and lowers the borrowers’ costs. The fee is then used for economic development grants (see the next post for examples of what the money is used for). Lowering the fee to 1/10th of 1 percent would reduce the amount MWHC pays in annual EDA fees from about $37,500 to $30,000. The fee would be split between Stafford and Fredericksburg’s EDAs, since MWHC plans to use the money for capital improvements at both Mary Washington Hospital and Stafford Hospital.

MWHC’s bond request will be before the Stafford EDA on Friday. Here is the rest of the proposed schedule:

  • November 12: Public Hearing held by the Stafford EDA; resolution of recommendation adopted by the Stafford EDA
  • November 30: Approving and concurring resolution adopted by the Board of Supervisors of the County of Stafford
  • December 13: Final approving resolution of the Fredericksburg EDA (assuming a financial institution to purchase the Bond has been identified and its terms and conditions are satisfactory)
  • December 14: Approving resolution of the City Council of the City of Fredericksburg
  • MWHC then hopes to sell the bank-qualified bonds by the end of the year. The company plans to sell the bonds through one bank but is still negotiating which one, said company spokeswoman Kathleen Allenbaugh. According to the bond memorandum, the company is talking to both Wells Fargo and BB&T.

    See tomorrow’s FLS for more.

    Permalink: http://news.fredericksburg.com/businessbrowser/2010/11/08/mary-washington-healthcare-bond-request-sails-through-first-stage/