Charlottesville City Council voted unanimously Tuesday night to allow Martha Jefferson Hospital to issue $50 million in revenue bonds.
Nearly half the funds generated will be spent improving the hospital's current facility in downtown Charlottesville.
Hospital administrators earmarked $23 million to be spent on their expanded cancer center and other projects, Martha Jefferson spokeswoman Ann Nickels said.
The new cancer facility features a new linear accelerator, a cutting-edge cancer treatment and a new treatment laboratory. The hospital also will add a Magnetic Resonance Imaging unit.
The remaining $27 million, Nickels said, will be used to erect a new outpatient care center at Peter Jefferson Place. Located two miles from the main hospital, Peter Jefferson Place is near the intersection of Route 250 East and Interstate 64. The care center is scheduled to be completed in August 2003.
City Councilman Rob Schilling said the Council only has allowed the hospital to issue tax-free bonds, and no money is coming directly from the city.
The city is taking no financial risk with this issue, and it is up to the hospital to come up with the funds, he said.
The hospital also had to receive permission from the city Industrial Developmental Authority to issue the bonds, Nickels said.
"The bonds are being issued 100 percent on the hospital's credit," she said. The hospital will not have to pay off their creditors immediately.
"The bonds are being issued with a variety of interest rates and maturation dates," Nickels added.
Martha Jefferson's service area includes Charlottesville, Albemarle County and seven other central Virginia counties.
Sixty percent of the hospital's patients come from Albemarle County and the city.
Although the hospital has no direct connection to the University Medical Center, the two participate in joint programs such as a male prostate cancer screening, which will take place this weekend.
The outpatient care facility at Peter Jefferson Place will be the first of many new buildings at the site. Martha Jefferson currently owns 14 acres of the area, and is contractually obligated to purchase another 70 from developers, Nickels said.
Pending re-zoning by the city, Martha Jefferson plans to construct a new hospital at Peter Jefferson Place. The project should be completed in the next 10 years.
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