Children’s Hospital of Orange County is lining up some of the money it needs to pay for its upcoming $562 million expansion.
Earlier this month, the Orange not-for-profit hospital sold $137.7 million worth of revenue bonds through the California Health Facilities Financing Authority and is in the process of selling three more series of bonds to raise $127.8 million.
CHOC officials declined to comment on the bond sales.
Late last year, Debra Mathis, the hospital’s chief operating officer, said the hospital planned to borrow about $150 million to pay for a new tower. The hospital also planned to get $100 million from donations and to use money from operations to cover expansion costs.
But the timing of when CHOC may receive money remains unclear because of California’s budget problems and the downturn in charitable giving because of the economy, according to a report by Fitch Ratings Ltd.
CHOC is entitled to tap into some $98 million worth of funding under Proposition 3, an initiative that California voters passed with 55% of the vote in last November’s election.
Proposition 3 allows children’s hospitals to get bond money in a lump sum or stretched out for up to 10 years.
The state hasn’t yet issued any children’s hospital bonds from Proposition 3, a spokesman for state Treasurer Bill Lockyer said last week.
CHOC also has some $30 million in construction funds left from Proposition 61, a similar bond initiative passed by voters in 2004.
The hospital has started some work. It’s demolishing the Orange Medical Complex, a medical office building at the corner of La Veta Avenue and Pepper Street near the Garden Grove (22) Freeway.
The hospital expects to finish demolition in late summer and begin work on the expansion later this year.
When CHOC is fully built out, most likely in 2020, it will contain 404 beds in 640,524 square feet of space, including the expansion’s centerpiece: a 425,524-square-foot building known as South Tower.
Timetable
The South Tower is scheduled to be completed in 2012 and will include unfinished shell space that’s expected to be completed by 2020. The tower is set to include an emergency department, operating rooms, a medical laboratory, pathology department and imaging and radiology services besides general pediatric medical-surgical hospital beds.
CHOC is adding beds in various phases. In a filing with the city of Orange’s planning department, the hospital said it plans to add 88 beds in the South Tower in 2012, 60 beds in 2015 and 52 more beds in 2020.
The project also will include some interior renovations and a 175,000-square-foot medical office building.
The Orange City Council approved CHOC’s request in March.
CHOC’s expansion has the support of local officials, including Mayor Carolyn Cavecche.
Cavecche has said that the project fits into her vision of Orange being the county’s “medical hub.”
UCI Medical Center opened the first phase of its new $556 million hospital in the city in March. St. Joseph Hospital-Orange opened its new patient tower in 2007. Orange also is home to Chapman Medical Center.
FKP Architects, a Houston-based firm, designed the CHOC building. The Newport Beach office of St. Louis-based McCarthy Building Cos. is the general contractor.
CHOC isn’t building South Tower to meet California’s earthquake law, unlike a number of major OC hospital construction projects that have gone up in recent years.
Hospital officials have said their main building, which went up in 1991, meets seismic requirements.
Other Expansions
Besides the UCI Medical Center and St. Joseph projects, St. Jude Medical Center opened its $125 million, five-story patient tower in January. St. Jude, which is one of four local hospitals owned by St. Joseph Health System, an Orange-based not-for-profit, is undergoing a $1.6 billion makeover to address both the earthquake law, which requires all acute-care hospitals to remain standing after a major quake, and a growing patient population.
