BOSTON, Jan. 9 /PRNewswire-FirstCall/ -- MassDevelopment today announced a $20 million financing package for the Boston Medical Center (BMC) through the agency’s New Markets Tax Credit program. Sovereign Bank will provide nearly $9.5 million of the financing package. The organization will use the funds to restore and rehabilitate its historic FGH building. Completed in 1864, the building is one of two remaining structures from the original Boston City Hospital campus.
Specifically, BMC will reconstruct the building’s south end and add two partial floors to maximize available space. In total, plans call for the rehabilitation of 16,283 square feet and the construction of an additional 14,945 square feet of space to house administrative offices for the hematology/oncology, surgical oncology, radiology administration and otolaryngology departments. Construction is scheduled to begin in April 2006, and officials estimate a fall 2007 completion date.
“The Boston Medical Center is a critical contributor to the overall health and well-being of thousands of Boston residents,” said Robert L. Culver, MassDevelopment president/CEO. “It’s an organization that has served the city and state for nearly 150 years, and we are extremely pleased to have a hand in arranging this important financing package. The beauty of our New Markets program is its ability to provide flexible gap financing to businesses and organizations that play a vital role in neighborhoods and communities that need an economic helping hand.”
The U.S. Department of the Treasury’s New Markets Tax Credit (NMTC) program allocated $70 million in tax credits to MassDevelopment last year. Launched in 2002, the Treasury’s program seeks to stimulate economic and community development and job creation in low-income communities by attracting capital from the private sector through tax credits offered by conduit organizations like MassDevelopment.
MassDevelopment was one of 271 applicants competing for $3.5 billion in tax credit allocations in 2004. Of these applicants, 63 were successful nationwide, and MassDevelopment was one of only five recipients in the Commonwealth.
“Although our building is scheduled to be placed on the National Register of Historic Places, we did not qualify for historic tax credits since the facility has been used continuously since its construction,” said Ronald Bartlett, Boston Medical Center chief financial officer. “The federal New Markets program was an excellent fit for financing the recent revitalization of our BCD building, and we’re grateful MassDevelopment, Sovereign Bank and Affirmative Investments, Inc. partnered to supply this new round of New Markets financing for our FGH building.”
In 2004, Boston Medical Center received a $12 million New Markets allocation from Affirmative Investments, Inc. to support the rehabilitation of its BCD building adjacent to the FGH facility. Sovereign Bank is the primary investor for both projects. Construction on the BCD building began in August 2005, and is scheduled for completion in October 2006.
Pat Sullivan, Massachusetts CEO for Sovereign Bank, noted that the services Boston Medical Center provides to the community are vital in ensuring that everyone in the Boston area has access to healthcare. “It is critical to the health care of the residents of the City of Boston that BMC has the financial support it needs to expand and renovate the facility, as well as update and increase its services. We are pleased to be making this significant investment in BMC.”
“Boston Medical Center provides exceptional care without exception and we are pleased to provide financing to help expand their campus and their mission,” said David Ennis, president of Affirmative Investments, Inc. “We have been fortunate to work with the extraordinary team at MassDevelopment and Sovereign Bank to successfully leverage private capital using the New Markets credit.”
Boston Medical Center is a private, not-for-profit, 547-bed academic medical center located in Boston’s historic South End. The hospital is the primary teaching affiliate for Boston University School of Medicine. Emphasizing community-based care, Boston Medical Center, with its mission to provide consistently accessible health services to all, is the largest safety net hospital in New England.
MassDevelopment, the state’s finance and development authority, works with businesses, financial institutions and local officials to stimulate economic growth across the Commonwealth. In fiscal year 2005, MassDevelopment financed or managed 158 projects statewide representing an investment of nearly $1.9 billion in the Massachusetts economy. These projects are supporting the creation of 2,769 housing units and more than 9,800 jobs: 4,702 permanent and 5,100 construction-related.
Sovereign Bancorp, Inc., (“Sovereign”) , is the parent company of Sovereign Bank, a $63 billion financial institution with more than 650 community banking offices, over 1,000 ATMs and approximately 10,000 team members with principal markets in the Northeast United States. Sovereign offers a broad array of financial services and products including retail banking, business and corporate banking, cash management, capital markets, trust and wealth management and insurance. Sovereign is the 18th largest banking institution in the United States. For more information on Sovereign Bank, visit http://www.sovereignbank.com or call 1-877-SOV-BANK.
Sovereign Bank
CONTACT: Adam Bickelman, MassDevelopment, +1-617-330-2086, or EllenBerlin, Boston Medical Center, +1-617-638-8491, or Ellen Molle, SovereignBank, +1-617-757-5573
Web site: http://www.sovereignbank.com/