Bon Secours seeks Portsmouth concurrence for roughly $30 million in Maryview projects

Bon Secours Mercy Health representatives told the Portsmouth City Council at a Jan. work session that the health system plans a public offering of tax-exempt revenue bonds that would allocate about $30,000,000 to Maryview Hospital for recent and planned capital projects.

Erin Sutton, bond counsel with Dinsmore & Shohl, told council members the Henrico County Economic Development Authority would serve as the governmental issuer and that state and federal steps are required before proceedings continue. Sutton said notice of a public hearing for the transaction was published in the Virginian-Pilot the day of the meeting and that the City of Portsmouth’s Economic Development Authority will hold a TEFRA (public) hearing next Tuesday. The presenters said Henrico EDA is scheduled to consider an inducement resolution this Thursday, which would start the multi-jurisdictional approval process.

The bond proceeds allocated to Maryview were described as covering about $30 million in prior capital expenditures (dating back roughly two years) and planned capital work for approximately the next two years. John Haines, chief financial officer for Bon Secours Mercy Health’s Hampton Roads market, told council that roughly $20–25 million of that total covers “retrospective” items categorized under patient flow, safety and aesthetics — examples given included relocating interventional radiology, shifting endoscopy suites to improve flow, installing Omnicell medication-dispensing systems and rearranging parts of the emergency department. Haines also identified ongoing projects including a sterile processing department (SPD) update (estimated at about $5–6 million) and a kitchen renovation.

Sutton and Haines emphasized that, under the plan described, debt service on the bonds would be secured solely by Bon Secours Mercy Health revenues and would not constitute a debt or general obligation of Portsmouth or other political subdivisions. Sutton cited two reasons the presentation was before council: (1) the state-law requirement that a locality concur when an authority issues revenue bonds for facilities outside its jurisdiction, and (2) the federal requirement under the Internal Revenue Code that a TEFRA public hearing and an applicable elected representative’s approval occur for qualified 501(c)(3) tax‑exempt bonds.

Timing provided by presenters noted an anticipated public offering around mid-April and a financing closing around May 1, subject to completing the Henrico inducement resolution and the local TEFRA hearing and any subsequent local approvals. Council members asked follow-up questions: Councilman Hugo asked about Henrico’s timeline and the timing for Portsmouth’s concurring resolution; Sutton said the city could consider concurrence any time after Henrico’s inducement action but that the teams were trying to have materials ready for the offering document in April. Vice Mayor Moody asked whether the projects would affect the workforce; Haines said the operational and flow changes could increase workforce needs but he did not provide a staffing estimate.

No formal council action was taken at the work session; Bon Secours representatives said they would return to seek formal approval after the TEFRA hearing and after Henrico’s inducement resolution.