SCBHS working with county, city on assisted living financial package

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As Swift County-Benson Health Services works to close the deal on financing that will allow it to build an assisted living and memory care facility, it is seeking backing from the City of Benson and Swift County.

It has been negotiating with Bremer Bank in Willmar to provide the majority of financing for the $10.32 million project.  Bremer’s $7.352 million loan would have to be secured by the assets of the proposed facility along with other SCBHS assets. However, an appraisal has left it about $750,000 short.

To help it cover that shortfall, SCBHS is asking for help in two ways:

First, it is asking that the City of Benson secure the $750,000 asset shortfall with its taxing authority. This would mean that if the assisted facility and memory care facility went broke, the city’s taxpayers would have to come up with the money to pay off any balance on the note.

Second, it is asking Swift County to cover half the risk by paying down the $750,000 by about $366,000. Currently, the county is receiving annual payments of $122,000 from SCBHS as it pays down a $2 million loan it took out in 2012 to help finance the construction of the then new Affiliated Community Medical Centers building as well as remodeling work at the hospital. The loan currently has a balance of about $1.2 million.

The county had agreed to make the loan because it had the reserves to do it, it could give the hospital a loan at 2 percent interest saving it on financing charges, and because it was earning less than 2 percent on its bond investments. It was seen as a win-win for the county and the hospital.

SCBHS is now asking that the county allow the next three years of $122,000 payments go toward reducing about half the $750,000 gap on financial assets for the assisted living-memory care facility.

While the county would have a cash outlay of $366,000 over the next three years and the city’s support would be limited to a guarantee should the project fail, Benson will be putting cash into the project in other ways.

While the details have yet to be worked out, Benson is looking at $1.1 million to $1.2 million of utility expenses to upgrade Wisconsin and McKinney Avenues, which run on the north and south sides of the SCBHS block....

 

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