Hospital gets loan approval

After more than a year and a half, North Valley Hospital has received final

approval for a $30 million federal loan guarantee for its new hospital.

After more than a year and a half, North Valley Hospital has received final approval for a $30 million federal loan guarantee for its new hospital.

The Department of Housing and Urban Development notified hospital officials Friday that its application for Section 242 hospital mortgage insurance was approved.

"We've waited a long time for this moment and we couldn't be happier," said Craig Aasved, North Valley's chief executive officer.

The hospital broke ground in May and finished site preparation this summer with its own money. Swank Enterprises, the general contractor, continued foundation work this fall.

InnoVative Capital, the FHA-insured mortgage lender, has begun locking in an interest rate for the hospital's loan. The company finances rural, community and critical-access hospitals nationwide.

"With FHA mortgage insurance, critical-access hospitals such as North Valley are able to borrow at very favorable financing rates," said Alan Richman, president of InnoVative Capital.

With loan insurance in hand, Aasved said, the project will proceed at a more rapid pace.

"Swank expects to have the framing steel on site within the next month and the building itself will begin to take shape," he said.

The hospital has also launched the public phase of a capital fund-raising campaign which has raised $3.3 million to date to reduce the cost of financing the new hospital.

Carol Blake, executive director of the hospital's foundation, said every $10,000 given prior to construction completion saves $12,618 over the life of the loan.

"It's very important to support the hospital during this process," she said.

Blake said many donors have been waiting for the loan guarantee approval before pledging their gifts to the campaign. She said new tax breaks also help North Valley Hospital for gifts given before the end of December.

The construction schedule calls for completion of the replacement hospital by early 2007.

The loan guarantee approval marks the completion of an important hurdle in the hospital project that has had to overcome several setbacks.

North Valley Hospital's certification as a critical-access hospital almost two years ago raised its reimbursement rate for Medicare and Medicaid patients.

A special program for rural hospitals, the critical-access designation allows these facilities to collect an amount closer to their true cost of care. It boosted North Valley's annual revenue by nearly $1 million, making financing a new building feasible.

A major setback occurred in January, when it appeared North Valley could lose its critical access designation if it changed to the new site near the intersection of Montana 40 and U.S. 93 north.

"Unfortunately, a proposed moratorium on the relocation of critical-access hospitals set us back six months," Aasved said.

He credited the hard work and perseverance of the hospital, medical staff and board of directors for maintaining the momentum of the planning process and sustaining "the vision of North Valley Hospital."

With the support of Montana's congressional delegation, North Valley Hospital was able to maintain its critical access status.

In early planning for the new hospital, various community groups differed on whether to renovate the existing hospital or where to build a new hospital.

After a second public examination of the options, community support coalesced around a new building south of downtown. The 45 acres offers room for expansion and a location closer for Columbia Falls patients.

Reporter Candace Chase may be reached at 758-4436 or by e-mail at cchase@dailyinterlake.com.