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Helena Health Foundation presses city for 40-year lease to secure hospital financing
Summary
The Helena Health Foundation presented to the city council seeking a long-term lease (the foundation’s attorney recommended 40 years) so lenders will finance major roof and facility repairs; the council voted to direct staff to prepare a 40‑year lease while working with the county on a pending court obligation.
The Helena Health Foundation asked the Helena City Council on Sept. 16 to authorize preparation of a long-term lease so the foundation can secure financing to repair and stabilize Helena Hospital.
A foundation representative told the council the organization assumed operations June 1, has already covered substantial vendor debt and capital work, and needs a longer lease to make loans and tax-credit financing viable. “I would ask for 40,” the presenter said when asked what to request from the city. He said the foundation has spent roughly $2.2 million covering vendor debts and has incurred repair costs including a new boiler and chiller; he estimated a new roof alone could cost in the low millions.
Why it matters: lenders and programs such as the new market tax credit typically require a stable long-term occupancy or lease to justify loans for major capital work. Foundation leaders said a 20- to 40-year lease would let them pursue an $2 million-plus roof project and other repairs without risking being displaced after a single short lease term.
Council members pressed for clarity on other constraints before finalizing lease terms. City officials and the city attorney said the city owns the hospital structure but does not operate the business, and they flagged an existing court obligation to the county for roughly $150,000 that is tied to proceeds from any sale or lease. City Attorney Mister Valley said that legal obligation must be resolved or accommodated as part of any lease arrangement.
Action taken: Councilmember Saint Columbia moved that the council support the purpose of preparing a 40-year lease to the Helena Health Foundation and direct staff and the city attorney to move forward with drafting. Doctor Miller seconded. After discussion, the body voted by voice and the motion passed (6 yes). The council’s vote authorized preparation of lease documents and signaled support for a long-term lease subject to legal and intergovernmental issues being resolved.
What was not decided: The vote did not set final lease terms, rent, or execution authority; councilmembers said those details will be resolved in later drafting, and that the mayor, county officials and hospital leadership should meet to address the county’s court-ordered obligation.
Next steps: City staff will prepare lease documentation for council consideration and coordinate meetings with the mayor, county and hospital representatives; the timeline for a final executed lease was not specified at the meeting.
