Federal agriculture officials put the finishing touches this week on a deal to finance a $16 million expansion and renovation at the Boulder City Hospital.
Construction is expected to start in the coming months and wrap up next year.
The nonprofit hospital will get a revamped surgical center, a larger emergency department, a new 10-bed geriatric psychiatric care unit, a new 10-bed acute rehabilitation unit and eight more long-term-care beds.
The U.S. Department of Agriculture’s Rural Development program will provide a $13.87 million loan to help pay for the project. The agency also will guarantee a $2.44 million loan from the Rural Community Assistance Corp., a private lender in West Sacramento, Calif.
The nearly $14 million loan was approved in January and the smaller loan guarantee was finalized Tuesday, said Shawn Hastings, community programs director for USDA Rural Development in Carson City.
The USDA may seem like an unusual funding source for the project, but the financially strapped hospital was rebuffed for a year by traditional commercial banks and private investment groups, according to CEO Tom Maher.
The 63-bed independent hospital has lost an average of more than $800,000 per year since the recession hit, up from an average annual loss of $550,000 between 2000 and 2007, he said.
The only hospital in Boulder City has been stung by higher operating costs and decreased patient volume. Its proposed tax-financing district, which would have generated about $750,000 of revenue a year for the hospital, was rejected by city voters in 2008.
As part of the construction overhaul, Maher is adding new lines of business to the hospital, including the geriatric psychiatric unit. Those new revenue sources were needed to show that the hospital can repay the project loans, said Sarah Adler, Nevada state director for USDA Rural Development.
“They wouldn’t be able to support this amount of additional debt,” she said.
The facility opened in December 1973 and was expanded in the early 1990s. Now 55,000 square feet, the hospital will grow by more than 19,000 square feet with the planned project.
The USDA regularly finances non-agricultural projects in rural communities, Adler said. For instance, the agency is working to refinance some debt held by Pershing General Hospital in Lovelock, a city of 2,400 people 90 miles northeast of Reno.