City to pursue rural health loan for Memorial Hospital renovation; staff warns application requires full cost disclosure

City staff told the Committee of the Whole on March 30 that they plan to apply for a North Carolina Department of Commerce rural health loan to support the proposed Memorial Hospital renovation and reuse project.

Peter Vaughn and staff said consultant David Hartigan advised the city that the rural health program could offer more favorable terms than a building-reuse loan. Under the program described by staff, the state would make a loan to the city, and the city would sub-loan to the project operator — identified in the presentation as OIC. Staff said the program can forgive loan amounts based on verified job creation and payroll reported to the state.

Vaughn said the program’s benefit is $10,000 per eligible job. A presenter at a previous meeting, Bridgette Chisholm, had said the project could create 25 jobs, which staff said would translate to a potential $250,000 toward the project if the jobs and payroll meet the state’s verification requirements. Staff said the city would need to report actual jobs and payroll for a full year to qualify for forgiveness.

Vaughn warned the council that state loan applications require full disclosure of project costs, including medical equipment; he said past applicants withdrew after learning disclosure requirements. The city’s staff said they plan to submit the application in late April and aim to present a resolution to the full council at the April 14 meeting.

Staff also noted timing risks tied to the state budget year and suggested the city must ensure funds remain available in the Department of Commerce’s fiscal-year allocations. Council members did not object; staff said it would confirm the project partner’s willingness to disclose required information before submitting the application.