The Grossmont Healthcare District (GHD) board of directors has unanimously approved the issuance of up to $115 million in general obligation bonds that will finance a number of capital improvement construction projects at Grossmont Hospital in La Mesa. It is the first issuance of bonds that are part of last year’s Proposition “G” $247 million bond measure sponsored by GHD that East County voters approved by more than 77 percent, well above the two-thirds approval required.
Plans call for up to $115 million in bonds to be offered for sale to both retail and institutional investors sometime in June after an anticipated high rating is received from Moody’s Investor Services, a recognized and widely utilized source for credit ratings, research and risk analysis. A high bond rating will affirm the creditworthiness of the bonds, which are expected to be well received by the investment community due to the District’s financial stability. The bonds will be sold through Goldman Sachs, a leading global investment banking, securities and investment management firm.
According to Dr. John Hardebeck, 2007 president of the GHD board of directors, proceeds from the first issuance of bonds will help pay for such improvement projects as completing the hospital's emergency and critical care center. Improvements planned at the hospital include 90 new patient beds to support a growing population, compliance with earthquake standards and upgrading the 51-year-old hospital's electrical, plumbing, along with other building systems infrastructure to support state-of-the-art medical technology.
Construction activity is expected to begin shortly after the delivery of bond proceeds. The specific list of construction projects, consisting of buildings and other fixed assets, will closely follow the Grossmont Hospital Facilities Master Site Plan, Hardebeck said.
In an ongoing effort to ensure accountability and transparency of bond revenues, Hardebeck noted that the 11-member Independent Citizens’ Bond Oversight Committee have heard numerous reports about the bond transaction process from District consultants. Advising the District on the transaction, in addition to Goldman Sachs, is Sidley Austin LLP, a law firm that specializes in public finance and securities transactional disciplines, and the investment firm of G.L. Hicks Financial LLC, which is serving as the District’s financial advisor.
Additional bond sales, not to exceed the maximum $247 million total, are tentatively scheduled for 2010 and 2012, depending on construction progress and expenses, as well as market conditions.
The Grossmont Healthcare District, a public agency that supports various health-related community programs and services in San Diego's East County region, was formed in 1952 to build and operate Grossmont Hospital. It serves as landlord of the hospital, including ownership of the property and buildings on behalf of local taxpayers. The District is governed by a five-member board of directors, each elected to four-year terms, who represent nearly 500,000 people residing within the District's 750 square miles in San Diego's East County. In 1991, the District leased the hospital's operation to Sharp HealthCare under a 30-year lease that runs through the year 2021. For more information about GHD, visit www.grossmonthealthcare.org.