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Denver Health Pavilion M
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Denver Health Uses Recovery Zone Facility Bonds and New Markets Tax Credits to Finance Pavilion M
June 15, 2010
Jerilynn Martinez
(DENVER) – Denver Health will use Recovery Zone Facility bonds and New Markets Tax Credits to help finance the construction of its newest medical facility. The $39.5 million transaction closed earlier today, bringing together a consortium of eight public and private sector entities to support Denver Heath as it expands services for Colorado’s population. Denver Health currently serves more than 160,000 individuals and forty percent of Denver's children.
A four-story building on the Denver Health and Hospital Authority medical campus near Delaware St. and Eighth Avenue, the new facility will offer:- A floor dedicated to adolescent psychiatric care, including 16 inpatient beds;
- An enrollment center with specialists to help patients apply for medical financial assistance;
- An outpatient kidney dialysis center operated by Fresenius Medical Care; and
- An outpatient ambulatory surgery center.
The building has been designed to achieve a LEED certified rating incorporating energy efficiency features.
Construction of the facility is estimated to generate 300 construction jobs and 48 permanent jobs. A groundbreaking celebration for Pavilion M will be held on June 16, at 11 a.m.
“We are thankful that our community partners have helped us in securing funding so that we can continue to serve Denver’s and Colorado’s most vulnerable patients,” said Peg Burnette, CFO, Denver Health. “This new facility will increase our capacity to serve the increasing population of adolescent children and teenagers in need of psychiatric care so that they will continue to have a place to go to receive high quality mental health care.”
The primary funding for Pavilion M’s construction will come through the issuance of Recovery Zone Facility bonds. Additionally, $39.6 million in New Markets Tax Credits have been awarded to the project. The sale of the tax credits is estimated to generate $10.6 million in equity for the development. The Colorado Growth and Revitalization Fund, a partnership between the City and County of Denver, Colorado Enterprise Fund, and Colorado Housing and Finance Authority (CHFA), contributed a portion of the tax credits, with NCB Capital Impact and RBC Capital Markets’ Tax Credit Equity Group also contributing tax credits from their allocation pools. JP Morgan Chase is purchasing all of the New Markets Tax Credits in support of Pavilion M’s development.
“Our investment in Denver Health's new Pavilion M complements our charitable commitment to the Lincoln La Alma neighborhood," said Todd Munson, president of Chase in Colorado. “At Chase, we invest in the communities where our employees contribute their time and talents.”
New Markets Tax Credits were designed by Congress in 2000 to spur private sector investment into economically distressed areas. Developments awarded the tax credits sell them to private investors, giving the investor a 39 percent federal tax credit, while bringing much needed equity to support viable business opportunities in low-income communities that otherwise might not have sufficient capital to move forward.
“The current economic climate has made it critical for borrowers to consider these types of innovative funding sources to get deals done,” said Cris White, CHFA executive director and CEO. “The breadth and quality of service that Denver Health provides is exceptional. It feels very good to know that we’re able to leverage our resources to assist Denver Health continue their work in the community.”
“We’re proud to add the new Denver Health facility to our list of successful New Markets Tax Credits projects, which includes the Sage Building redevelopment,” said André Pettigrew, executive director of the Denver Office of Economic Development. “This important funding tool clearly is making an impact in further enhancing the economic vitality of our community and region, as well as driving job growth.”
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| Western Slope Office - 1.800.877.8450 |
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