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Portsmouth EDA approves tax‑exempt bonds to finance Bon Secours Mercy Health projects including Maryview
Summary
After a TEFRA hearing, the Portsmouth Economic Development Authority voted 6‑0 to approve a resolution authorizing conduit revenue bonds to reimburse past capital spending, refund prior debt and fund upcoming capital projects for Bon Secours Mercy Health; about $30 million was allocated to Maryview Hospital.
The Portsmouth Economic Development Authority on Jan. 21 held a public TEFRA hearing and approved a resolution authorizing the issuance of tax‑exempt conduit revenue bonds to benefit Bon Secours Mercy Health, including about $30 million allocated to Maryview Hospital in Portsmouth.
Bond counsel Erin Sutton of Dinsmore & Shohl told the authority the bond proceeds will be used to refund some prior outstanding debt, reimburse the hospital for prior capital expenditures and fund other planned capital projects. “As conduit revenue bonds, the debt service on the bonds is secured only by the funds and revenues of the borrower … and will not constitute debt or general obligation of any political subdivisions, including the city of Portsmouth or the Portsmouth Economic Development Authority,” Sutton said.
The hearing was held under section 147(f) of the Internal Revenue Code, a federal requirement for tax‑exempt 501(c)(3) conduit financings. Public notice was published Jan. 14 in the Virginian‑Pilot, and Sutton said the issuer presented the plan of finance to Portsmouth City Council on Jan. 14 and will seek council approval next week to satisfy federal and state requirements.
Sutton described a long list of past and planned capital improvements covered by the financing. Projects cited for Maryview include relocation and renovation of interventional radiology and endoscopy suites, replacement of nursing‑call systems and several air‑handling and infrastructure upgrades, plus purchases of clinical equipment such as cardiac cath lab equipment, anesthesia machines, and imaging equipment.
A resident who spoke during the public comment portion said she was concerned about how the public was notified and asked for more and earlier communication about projects affecting her neighborhood. The public hearing was closed after the comment period.
Following the hearing, the authority moved to adopt the resolution included in the meeting package. The roll call showed the measure approved by a 6‑0 vote. Sutton advised staff that the issuer and borrower will next present the transaction to Portsmouth City Council for its review and action.
Because these are conduit bonds, the authority’s action does not create municipal debt; repayment is the responsibility of Bon Secours Mercy Health.
