Delaware Valley Hospital outlines 113,000-square-foot expansion; county approves corporation to enable $60 million tax-exempt bonds

A representative from Delaware Valley Hospital told the Delaware County Board of Supervisors that the hospital plans a 113,000-square-foot addition to its Walton campus and asked the board to approve formation of a financing vehicle to support bond issuance.

The hospital presentation said the new building will include 25 inpatient single-suite rooms, expanded outpatient specialty services (including physical, occupational and speech therapy), an expanded laboratory and a new draw station, building-support functions and collaborative office space for community partners. The hospital said it plans to relocate primary care services now in the Walton clinic into the new building and to convert vacated space in the main hospital for administrative offices and an expanded outpatient pharmacy. The hospital representative said the pharmacy is currently open 8 a.m.–8 p.m. Monday–Friday and 8 a.m.–2 p.m. on weekends.

The hospital representative said the project timeline calls for bid requests to go out in August with a short bid period, a construction start in September and about two years of construction. “If we start mid September, we’re looking at total completion, September 2027, but we’ll be into the building probably June 2027,” the representative said.

Why it matters: hospital leaders said bringing services closer to patients will improve access in a county where transportation is a longstanding issue. The hospital described new collaborative space for partners such as veterans services and family support providers to use on-site, reducing travel burdens for patients.

Financing and approvals: the hospital told the board it submitted a certificate-of-need application to the New York State Department of Health on Jan. 29 and received approval from the state’s Public Health and Health Planning Council on June 18; the hospital said it received an official letter of approval with contingencies. Those contingencies, the hospital said, include payment of review fees, updated engineering and architectural drawings and final bonding paperwork.

Hospital leaders said the project’s projected total cost is about $80.6 million. The planned financing structure presented to the board calls for the hospital to contribute roughly $20 million from saved funds and fundraising and to use up to $60 million in tax-exempt bonds.

County action on financing tool: the board approved a resolution consenting to formation of the Delaware County Capital Resource Corporation, a new nonprofit development vehicle the county’s Industrial Development Agency (IDA) will form to issue tax-exempt bonds for projects that otherwise cannot access the IDA’s prior authority. County staff explained that municipalities and development authorities have used similar local development corporations to enable public facility tax-exempt financing after a federal or state change limited direct IDA use for certain nonprofit financings. A county staff member said the bond structure should yield substantial interest-cost savings over the life of the bonds, saying, “it’s gonna save them $20 to $30,000,000 over the life of the bond issue.”

The county resolution authorizes the IDA to form the Delaware County Capital Resource Corporation, subject to county oversight, and to follow a process that includes incorporation, a required public hearing on the bonds, and a subsequent county board authorization of any bond issuance. County staff said the bonds would not be county liability.

Votes at a glance: the board passed a series of budget amendments, program authorizations and the corporation-incorporation resolution during the same meeting. Items recorded on the agenda and carried during the session included:

- Resolution 110 — 2025 budget amendment: targeted inflationary increases, Department of Mental Health — adopted (roll call). - Resolution 111 — 2025 budget amendment: summer youth employment (Department of Social Services) — adopted (roll call). - Resolution 112 — 2025 budget amendment: Delaware County rental supplemental program (DSS) — adopted by roll call; one recorded “No.” - Resolution 113 — 2025 budget amendment: adoption and legal guardianship incentive payments (DSS) — adopted (roll call). - Resolution 114 — 2025 budget amendment: summer youth employment program (Youth Bureau) — adopted (roll call). - Resolution 115 — 2025 budget amendment: transfer of funds (Department of Mental Health) — adopted (roll call). - Resolution 116 — Approval of proposed certificate of incorporation; consent to formation of the Delaware County Capital Resource Corporation (economic development) — adopted (roll call). - Resolution 117 — Schedule and publish public hearing for Community Development Block Grant input (NYS Office of Community Renewal) — adopted (voice vote); public hearing set for July 23. - Resolution 118 — Correction of current tax rolls per Real Property Tax Law §554 (Real Property Tax Services) — adopted (roll call). - Resolution 119 — Authorization for disposition of personal property no longer necessary for public use (DPW) — adopted (voice vote). - Resolution 120 — Sale of real property (DPW) — adopted (roll call). - Resolution 121 — Purchase of software (contingency funding) — adopted (roll call). - Resolution 122 — Payment of bills — adopted (roll call).

What was not decided: the board’s approval of the capital resource corporation is a step in the financing process; county staff and hospital officials said additional county approvals would follow before any bonds are sold. Staff said the corporation’s incorporation papers would be filed immediately if the board’s resolution passed, a first meeting would be held to consider the hospital’s application and to schedule a public hearing, and final bond issuance would return to the board for authorization.

Context and next steps: county staff said if today's incorporation resolution passed, the IDA would file incorporation papers and the new corporation would hold a public hearing before any bonds are sold. The hospital said it is also finalizing bond underwriting with consultant Kaufman Hall and working with Chase (construction management) and expects to purchase two acres adjacent to the campus to add roughly 178 staff parking spaces. The hospital representative asked the board for a vote of confidence and said the project “is going to impact this whole county” and could change county health outcomes.

Ending: the board carried the incorporation resolution by roll call and the hospital and county staff said the next formal steps are incorporation filing, a public hearing on the proposed bonds, and a subsequent board authorization vote if the public hearing and application are accepted.