HMC/CAH Consolidated Inc., the Missouri company financing the construction of Hillsboro Community Hospital, has had a $9.5 million loan through the Bank of Hays approved by the state of Kansas.
HMC/CAH Chief Executive Officer Larry Arthur said that the company is in the process of clearing the final hurdle, seeking approval of United States Department of Agriculture to guarantee the loan.
HMC/CAH has been involved with the hospital project for more than a year Arthur said the project stalled because the credit crisis of 2008 forced banks to suspend some lending. Acquiring a loan for any real estate project was difficult; acquiring such a large loan for a project was nearly impossible.
However, as part of the recent package of stimulus bills, the USDA declared that it would guarantee loans.
“A hospital is considered a first-priority project,” Arthur said. “They are trying to stimulate job growth.”
However, Arthur is not ready to declare victory. He said that when a project reaches Washington he refrains from guessing on the outcome.
“We’re in pretty good shape,” Arthur said.
If the loan is approved and guaranteed by USDA, Arthur said that HMC/CAH will start the bidding process with construction contractors while the loan is closing and he hopes to break ground by the end of July. He said that if everything goes well construction should begin at the end of August or September.
The entire project is expected to cost $12 million with HMC/CAH putting up $2.5 million. Plans for the hospital are in place, with 12 months of construction time expected.
HMC/CAH plans to pay off the loan with revenue from the hospital.
“This is the way every hospital borrows money,” Arthur said.
HMC/CAH announced their purchase of Hillsboro Community Medical Center June 18, 2008. The new hospital will be constructed at Industrial road and U.S. 56.