Danbury ad hoc panel backs $130 million conduit bond authorization for proposed proton therapy center

A Danbury City ad hoc committee on Monday recommended that the full City Council adopt a bond resolution authorizing conduit bonds up to $130,000,000 to finance a proposed Danbury Proton therapy center, a facility the project team said would bring regional access to proton therapy, research partnerships and dozens of local jobs.

The recommendation follows a presentation by Danbury Proton and its financing advisers explaining that the city would serve only as a conduit issuer — lending its tax‑exempt authority — while the project and its trustee would be the sole sources of repayment. The project team said the city would receive approximately $250,000 at closing plus ongoing monitoring fees (cited at roughly $30,000 a year) and permitting and development fees that were estimated to total several hundred thousand dollars during construction.

Committee members spent the bulk of the meeting probing the financing structure and process. Bond advisers and counsel said the increase from the $100 million figure discussed in January to the $130 million authorization reflected the addition of multiple bond series (senior “A” bonds plus smaller B and C series for equipment and sponsor pieces) that were not included in the earlier figure. Counsel and finance advisers repeatedly described the bonds as non‑recourse to the city: “There’s no personal guarantees,” one adviser said, and the trustee holds the proceeds and collateral; the city’s obligation is limited to following statutory procedures to act as issuer.

Several council members pressed for procedural clarity and for corporation counsel to confirm whether the ad hoc’s recommendation and any change in the par amount would have to return to the full council for approval. Corporation counsel and bond counsel said the ad hoc is acting as an extension of the council’s deliberations and that the council will ultimately vote on the bond resolution under the relevant Connecticut statutes; they advised that the committee may recommend amendments and that staff will confirm whether a separate recommitment is required.

The committee also focused on the project’s nonprofit/charitable structure and local tax implications. The project explained that Elamos (spelled in the presentation materials as the 501(c)(3) owner) would hold title to the real property and some project assets to enable tax‑exempt conduit financing, while Danbury Proton LLC would operate the facility as the manager. Bond counsel said the IRS granted 501(c)(3) status after reviewing the application and that, under state law, a municipality’s assessor will review property‑tax exemption qualifications every four years. Several members voiced concern that the site—currently generating minimal property taxes—could become tax‑exempt, potentially foregoing material tax revenue for the city.

Committee members also asked about patient mix, certification and access. Project representatives said about half of patients are expected to be Medicare beneficiaries, Medicaid patients would represent a small percentage and the project has charity‑care commitments required by its Certificate of Need (including a stated charity‑care percentage). The team estimated construction could be completed in roughly 18 months and that operations would ramp to full capacity over about three years.

After discussion, the committee voted by voice to recommend council adoption of the bond resolution as presented and to increase the authorization ceiling from $100,000,000 to $130,000,000 (or such higher amount as the council may authorize). The motion also asked the council to condition approval on a city right of first refusal for financing any additional treatment rooms proposed while bonds are outstanding. A committee member moved the motion and another seconded it; the chair called the vote and the motion passed by voice vote.

Next steps: the ad hoc’s recommendation will be forwarded to the full City Council for consideration of the bond resolution and any amendments. Bond counsel and city staff said they will provide legal confirmations and the detailed loan and fee schedules requested by committee members before council action.