Bill authorizing bonds for Maui hospital to go to conference

A bill in the state Legislature that could assist with the financing of a long-awaited West Maui hospital is currently in a state House-Senate conference committee awaiting scheduling, Maui legislators said this week.

“Hopefully, it will go all the way,” said West Maui Rep. Angus McKelvey, who along with House Speaker Joseph Souki, introduced HB 2213.

The bill would authorize the issuance of special purpose revenue bonds to help the West Maui Hospital and Medical Center Foundation fund the hospital’s construction at no cost or obligation to the state. Work is scheduled to begin in 2015, possibly in the spring, on nearly 15 acres in Kaanapali off Kakaalaneo Drive, mauka of Honoapiilani Highway.

Previous estimates for construction were about $45.8 million.

Brian Hoyle, president of Newport Hospital Corp., the California-based developer, said construction plans will continue with the passage of the bill or not.

“We’ve already got financing arrangements for the interim. Like any project, we are looking at the short term and the long term,” Hoyle said.

The special purpose revenue bonds, if approved, would serve as a “financial vehicle” and potential source of long-term financing to the build hospital, Hoyle said.

“We are hoping it goes through,” he said. “It would be a very good thing.”

State Sen. Roz Baker, who represents West and South Maui, explained in an email that the special purpose revenue bonds will not add to state indebtedness or count against the state’s bond ceiling and are not a state grant or loan.

These tax-free bonds receive a favorable interest rate because they further a government purpose, she said.

“It is another financing tool that the hospital developer may chose to use as a method to provide construction funding,” said Baker, who was named to the conference committee handling the bill Monday.

If the bill is approved, she said, the state budget director would need to “complete due diligence on the recipient” before the recipient could go to the bond market. These special bonds require legislative authorization.

McKelvey stressed that the time is now for this bill that has nearly reached the finish line and passage. The bill has legislative support this session; it may not have it in the future, he said.

Legislative staff said Tuesday afternoon that conference committee meetings have not been scheduled for the bill.

Meanwhile, work on the hospital proceeds. Hoyle said the current focus is on obtaining land-use entitlements from the county. He expects to hold a town meeting in June to discuss the hospital’s timeline, as well as meet with the community.

According to its website, the hospital will have a 24-hour emergency department, three operating rooms, 16 medical surgical beds, nine critical care/telemetry beds and other specialty departments.

The campus also will include a 40-bed skilled nursing facility, a 40-unit assisted living facility, a medical office building, a freestanding clinic, and a drug and alcohol rehabilitation facility.

* Melissa Tanji can be reached at