DALLAS — The University of Colorado Hospital will use bond financing for a $400 million expansion at the new Anschutz Medical Campus at the site of the former Fitzsimons Army Hospital in Aurora, officials said yesterday.
Colorado Gov. Bill Ritter joined Aurora Mayor Ed Tauer and Bruce Schroffel, chief executive of the hospital, in a press conference to announce plans to add a 12-story tower to the hospital that anchors the growing medical complex.
The UCH board is in the process of choosing an architect and general contractor.
“This is a multimillion-dollar project,” Schroffel said. “And we will be able to do this without any funding from the state or federal governments.”
While detailed financing for the project has not been announced, the hospital expects to fund the work through a combination of cash and debt, most likely revenue bonds.
The project is expected to break ground next year, with completion scheduled in 2013. The hospital’s board approved the project last month.
The announcement comes nearly three months after the hospital moved from its old location near downtown Denver to the Anschutz site several miles to the east.
“The planning that got us to this point and the subsequent decision to move forward raised many concerns and issues,” Schroffel said. “The most obvious is uneasiness about our current debt load, which is still quite high, at nearly $530 million.”
Despite the debt, the hospital earned upgrades last year from Moody’s Investors Service and Fitch Ratings.
“The upgrade follows 16 months of successful operations at the new Anschutz Medical Campus, with very strong operating margins, positive volume growth, and the avoidance of any significant balance sheet deterioration,” Moody’s analysts wrote when raising the credit to A3 from Baa1 in January 2009.
Fitch in February 2009 raised UCH to A-minus from BBB-plus with a positive outlook.
“To date, the expected benefits of consolidating UCH’s operations onto the Anschutz Medical Campus have exceeded expectations,” Fitch said. “In fiscal 2008, total admissions were up 3.1% and inpatient and outpatient surgeries up 8.2% and 2.6%, respectively, over the prior year.”
The new UCH tower will provide 1,400 full-time jobs to Anschutz Medical Campus and 600-650 construction jobs.
The Anschutz Campus, named for Denver financier and philanthropist Philip Anschutz, is expected to represent more than $4 billion of investment when completely built out.
The first UC medical facility at the site was the Anschutz Cancer Pavilion that opened in 2001.
The hospital is seeking to raise $20 million for expansion of that facility as well. The hospital’s cancer services have seen a patient increase of nearly 100% since opening, officials said.
The University of Colorado Hospital also is in the midst of a $67 million project to link electronic medical records across all clinical areas. That project ultimately will bring another 150 jobs to the Anschutz Medical Campus during its three-year development, officials estimate.
While UCH is the teaching hospital for the University of Colorado at Denver Medical School, the hospital is financially independent and receives no support from the Colorado general fund.
It is also governed by a separate board from the University of Colorado Board of Regents.