DALLAS — Officials from the Maricopa County Special Health Care District are seeking a financial adviser to help them develop a financial plan for building a new public hospital in the developing bio-medical complex in downtown Phoenix.
The five-member elected district board has directed Betsey Bayless, the district’s chief executive officer, to spearhead efforts to replace 40-year-old Maricopa Medical Center with a new facility downtown near the proposed University of Arizona Medical Center, the new Arizona State University School of Nursing & Healthcare Innovation, and the Translational Genomics Research Institute.
The district’s request for proposals from financial advisers states the advising services are needed for the issuance, sale, and delivery of general obligation bonds. However, Gibson McKay, the district’s director of communications and public affairs, said general obligation bonds could be just one component in the financing plan.
“We might issue some revenue bonds and fewer GO bonds, and there are other sources of funds from the state and national governments,” McKay said. “We also would look for private donations from philanthropists and charities, and we have a hospital foundation that could also assist with the funding. We need to figure that out, and that’s why we’re trying to hire a financial adviser.”
Bayless said the district has been discussing the move with officials from the two universities, the city, and other healthcare providers in the area.
The district will accept bids for financial advising services until 2 p.m. Mountain Standard Time on Friday, Sept. 29. The board is expected to vote on the contact on Oct. 25, with a start date of Nov. 1.
Published reports that the new facility to replace the existing 400 beds at Maricopa Medical Center could cost $500 million or more are premature, McKay said.
“That’s up to us,” he said. “The cost will depend on the type of facility we and the financial adviser decide we want, what we need, and what we can afford.”
The hospital district was part of the Maricopa County government until voters approved the establishment of a separate authority in November 2003. The district operates as Maricopa Integrated Health System.
The district is financed with a secondary property tax that was limited to generating $40 million the first year of operation. The cap goes up as property values increase, with revenues of $42 million in the last fiscal year.
The current property tax costs the owner of a $150,000 home some $22 per year, McKay said. Increasing the tax levy to support GO bonds for a new hospital would require an election, he said.
The district considered renovating the existing hospital, McKay said, but determined it would cost almost as much as a new facility and would be difficult to finance.
“We’re licensed for 540 beds, and we operate about 400,” he said. “Renovating the structure to current standards would eliminate about 200 beds, and that loss of revenue alone makes renovation unfeasible.”
The current facility, which was built as an army hospital, treats more than 20,000 patients and trains more than 400 physicians annually. The trauma center treats another 50,000 patients a year.
The ballot that established the hospital district also stipulated that any replacement for Maricopa Medical Center be built within three miles of the current site. McKay said that radius includes the area of downtown where the other medical projects are located.
