Delaware Valley Hospital details $80.6 million expansion; county board approves formation of local capital resource corporation

Delaware Valley Hospital representatives updated the Delaware County Board of Supervisors on plans to build a 113,000-square-foot addition to the Walton hospital campus and said the project will be financed in part with up to $60 million in tax-exempt bonds issued through a newly formed local capital resource corporation.

The hospital presentation, made during the board's meeting, said the addition will include 25 inpatient single-bed rooms, expanded outpatient and specialty services, a larger laboratory and draw station, physical and occupational therapy space, expanded outpatient pharmacy services (including a potential drive-through), and collaborative workspace for community-based partners. The hospital representative said bids are expected to be solicited in August, construction would begin in mid-September, and the build is estimated to take roughly two years with partial occupancy in mid-2027 and full completion in September 2027.

The project has state and local approvals but carries standard contingencies. The hospital representative said the New York State public health planning council approved the certificate of need on June 18 and that the hospital received a formal approval letter with contingencies that include payment of required review fees, updated engineering and architectural drawings, and final bond paperwork. The presentation also said the village of Walton granted full site plan approval in June.

Why it matters: hospital leaders said the new facility will consolidate primary care, specialty outpatient services and supportive services on one campus to reduce travel for patients and improve continuity of care across Delaware County. The expansion aims to add inpatient capacity and centralize outpatient supports the hospital said are frequently in demand by county residents.

Details and financing: the hospital representative said the total project cost is approximately $80.6 million, with the hospital contributing about $20 million from saved funds and planned fundraising, and seeking up to $60 million in tax-exempt bond financing. Counsel and staff described a financing plan that would use a county-authorized nonprofit capital resource corporation—modeled on recent local development corporation structures—to permit issuance of tax-exempt bonds for the nonprofit hospital. County counsel explained those bonds would not be the financial liability of Delaware County.

The board voted to approve a resolution consenting to the formation of the Delaware County Capital Resource Corporation, the local development vehicle intended to issue the tax-exempt bonds for the hospital project. Board materials and the counsel's remarks said, if the corporation incorporation is approved, a separate step will return to the board for authorization of the actual bond issuance after state filings and a public hearing required for bond issuance.

What remains: hospital officials said remaining approvals include final incorporation filings, a public hearing before the capital resource corporation on any bond issuance, final signed bonding paperwork and lender review. The representative also said the hospital is working with Kaufman Hall as a bond issuance consultant and has engaged a construction management firm called Chase. The presentation said the hospital plans to purchase two adjoining acres for a new staff parking lot with about 178 spaces to free patient parking closer to the facility.

Board acknowledgement and next steps: after questions, supervisors approved the incorporation resolution for the capital resource corporation. County staff said incorporation papers would be filed promptly and a first meeting of the new corporation would be scheduled to accept the hospital's application and to hold the required public hearing on bond issuance. A subsequent board meeting would be asked to authorize bond issuance by the new corporation, at which point additional specifics and any legal conditions would be presented.

The hospital representative emphasized the project's countywide scope and said the expansion is intended to improve health outcomes for Delaware County residents. The board did not take any additional funding action at the meeting beyond consenting to the formation of the capital resource corporation and scheduling the subsequent procedural steps required for bond issuance.