A financing plan that will allow ProMedica Health System to lease, instead of own, a new outpatient medical complex it plans to build in Perrysburg was approved yesterday by the Toledo-Lucas County Port Authority board of directors.
The board authorized the issuance of up to $11 million in variable-rate, taxable bonds to pay for the 42,000-square-foot, two-story building proposed for a 6.4-acre site at Levis Commons on Dixie Highway south of I-475, and for medical equipment to be used there.
The port authority will own the buildings and equipment and Toledo Hospital, one of several area hospitals ProMedica owns, would be obligated to repay the debt with lease payments. According to a port authority staff report, National City Bank will buy the bonds when they are issued May 10.
ProMedica is pleased to have the port authority's support for the project, spokesman Tim Langhorst said. “It's a good partnership, absolutely,” he added.
Construction is expected to start next month and take a year, Mr. Langhorst said. Once the facility opens, physicians' offices and diagnostic facilities now at scattered locations elsewhere in the Toledo area will be moved there. Mr. Langhorst said there might be some new jobs in the diagnostic facilities, but he was not sure how many.
The site is part of 25 acres ProMedica owns at Levis Commons. The 6.4 acres will be leased to the port authority for an initial 25 years with options extending to 99 years.
After the complex opens, ProMedica's initial lease term is five years with five one-year options. Should ProMedica choose not to exercise any of the options, it will have to buy the complex, pay off the remaining bond balance and leave, or arrange its sale to a third party.
For its services, the port authority will receive a $100,950 fee at closing plus an annual fee equal to one quarter of 1 percent of the outstanding principal balance on the bonds.
Thomas L. Schlacter, chairman of the port board's finance committee, said he could not recall any previous financing projects for medical facilities from the authority's Northwest Ohio Bond Fund, but said the synthetic lease serves the same purpose for ProMedica as it does for industrial projects - to keep private capital free for other purposes.
“Owning real estate is not profitable - it ties up capital that might better be used elsewhere,” Mr. Schlacter said.
Also during the meeting, the port board approved an agreement with Airpath Wireless, Inc., of Toledo, to provide high-speed wireless Internet service at Toledo Express Airport. Airpath will install required communications equipment in exchange for exclusive service rights for an initial one-year term, plus two option years.
And the board agreed to pay Landrum & Brown, a Cincinnati airport consulting firm, $66,335 to complete a federally required update of the noise abatement plan at Toledo Express.
The port board has scheduled a full-day retreat to follow its May 23 board meeting, and yesterday, Chairman Pat Nicholson said he wants a discussion during that retreat about what the port authority's future role in local economic development planning should be.
As long as the port authority collects taxes that are spent on economic development efforts, Mr. Nicholson said, it should participate in those efforts. But if it is more appropriate for the port to concentrate on managing and developing its transportation facilities, he said, then the agencies that are spending the money should be the ones asking the public for the taxes that provide their revenue.