Another bond issue planned to help finance West Maui hospital construction
Developers of the long-awaited West Maui Hospital and Medical Center continue to seek project financing as they anticipate that construction will begin in April.
Various hurdles have kept the 15-acre project in Kaanapali from receiving all of its financing, delaying the start of construction of the complex being developed by Newport Hospital Corp.
Last July, corporation President Brian Hoyle said he was awaiting $83 million in federal tax-free bonds. But in November, congressional tax reform legislation threatened the potential loss of the tax exemption for private activity bonds, which had been the financing vehicle for the hospital’s construction.
An initial bond offering was withdrawn because of uncertainty over action by Congress and because not all of the bonds were sold, Hoyle said in an email.
But since the tax bill passed by Congress maintains the federal tax exemption for private activity bonds, Hoyle said hospital developers are completing a revised bond issue.
But this time, the amount sought will be around $70 million, less than the $83 million originally sought. Hoyle said investors balked at the higher amount as “being too much.”
Hoyle said he hopes to take the bond issue to the market in the next two to three months.
On-site grading for the acute-care medical facility began in August 2016 and was completed last June, along with most of the underground infrastructure. Work included installing water and sewer systems, electrical conduits and a drainage system. Hoyle anticipates construction will be completed by December 2019.
Many new medical facilities are financed by private activity bonds, Hoyle said, although there are other financing options.
The state granted a certificate of need for the West Maui hospital in 2009. The state Legislature has granted the project a $50 million special purpose revenue bond for construction.
When completed, the 25-bed, full-service hospital in Kaanapali will include a 24-hour emergency room, three operating rooms, a 40-bed skilled nursing facility and a 40-unit assisted-living facility. Other features include two medical office buildings and a 40-bed, drug-and-alcohol rehabilitation facility.
The development is expected to generate 150 jobs for doctors, nurses and clinical and support staff. The hospital will be owned and operated by the nonprofit West Maui Hospital Foundation.
* Melissa Tanji can be reached at email@example.com.