Doctors accept city’s offer
The city of Troy soon will become the owner of Troy Regional Medical Center property once again.
As proposed by the Troy City Council, Troy Doctors Hospital LLC voted unanimously Thursday to allow the city’s established Health Care Authority to issue the real estate bonds. This would make the city the owner of the physical hospital property, and the doctors group will make lease payments and continue to own operations.
The total cost of the purchase will include the $10.5 million property costs, the $452,000 loan issued to repair the heating and cooling system and issuance costs.
Troy Mayor Jimmy Lunsford said the total would be repaid to the city as doctors make payments.
Eventually, Lunsford said the doctors would own the hospital in full after those payments are complete.
“It’s like buying a house, where you make payments and at the end of that time, the title is given to you,” Lunsford said.
Lunsford said he proposed this plan to give the doctors lower payments and to give the city a smoother transition in the event doctors require city assistance in owning operations.
“It’s going to be healthy for them, and they’ll certainly get the lowest interest rate available to them,” Lunsford said.
Gil McKenzie, hospital investor and member of the board of managers, said after reviewing all financing choices, the city’s offer was the best.
“Really in the interest of time, we looked at our options for financing, and from the information we had, it appears going with the city’s offer to do the sell/leaseback of the real estate was our best option,” McKenzie said. “So we voted to move forward with that subject to further due diligence.”
McKenzie said while the doctors will sell their ownership of the property to the city, they will still maintain all ownership of operations.
Before Thursday’s hospital board meeting, the city council met to extend the doctors’ time to obtain a letter of intent for long-term financing from Superior Bank. The council originally had asked hospital owners to submit this letter by April 30 as part of the extended agreement between the two, but the bank, to no fault of the doctors, was unable to issue the letter in time.
By Friday morning, Lunsford said the city will begin establishing the ownership through the Health Care Authority, but the entire process is expected to take two to three months.
Lunsford said Superior Bank, where the $10.5 million loan is established, and Troy Bank & Trust, where the air-conditioning loan is established, have agreed to extend the loans to doctors until the transition takes place.
No action is required by the Troy City Council to make this official, since it has already voted to establish the Health Care Authority for this purpose.