UNMH says it has funds for expansion

Savings, $300M loan will pay for project to relieve crowding

Adding up years of savings and a loan of more than $300 million, University of New Mexico Hospital officials say they have the money needed to pay for a massive hospital expansion project that aims at relieving crowding concerns at the state’s only Level 1 Trauma Center.

“We are not seeking another appropriation from the state,” hospital CEO Kate Becker told Bernalillo County commissioners earlier this month during the hospital’s regular quarterly update to the commission.

UNMH is getting close to starting a five-year expansion project at its main hospital. The addition will include 96 beds designed to treat patients in intensive care, 18 operating rooms, diagnostic services and other additions. It will be built on 6.7 acres west of the hospital near Lomas and Yale, where there is currently parking and UNM’s physics and astronomy building.

The project is expected to cost nearly $600 million. But hospital officials said they have accounted for the needed money.

Becker said that over the past five to 10 years, the hospital has saved about $200 million for capital initiatives that it will put toward the project. In addition, the hospital is expecting to use about $45million in cash reserves to pay for needed parking space for the hospital and $30 million in state appropriations that were allocated last year.

The hospital is also planning to take out a $320million loan to pay the remaining construction and equipment costs.

Mark Rudi, a spokesman for the hospital, said in an email that hospital officials are expecting the loan to take about 25 years to pay off. Officials didn’t know what interest rate they will get on the loan.

Becker told commissioners that the hospital is working to get the mortgage backed by the U.S. Department of Housing and Urban Development, which can lower interest rates, according to the federal agency’s website. The hospital expects to get final HUD approval in early 2021.

Becker said a hospital can be most efficient when it is at 72% to 85% of its capacity.

“We’re consistently running above 85%, and many days we’re running above 100%, so that is the No. 1 reason we need additional beds,” she said.

Hospital officials have previously said the first phase of the construction project will be knocking down the hospital’s current parking garage and building another one northeast of the roundabout near UNMH. That phase of construction could start in August.

A previous proposal to increase UNMH’s capacity died at the state Board of Finance in 2012, when the Gov. Susana Martinezled panel never held a vote on it.

Rudi said the same board will need to approve the new proposal.

“UNMH will keep the state Board of Finance informed as the project progresses and will address any issues that board has,” he said. “As we move through the design and financing processes, our legal team will ensure that we address any approval that is necessary.”