Continuing a 42-year tradition of collaboration, the Arlington County government will assist Virginia Hospital Center in issuing bonds to support new construction.
County Board members on March 21 authorized the government’s Industrial Development Authority, or IDA, to issue up to $300 million in tax-exempt revenue bonds to support the effort. Members of the IDA held a requisite public hearing and approved the proposal in February.
The measure will not cost taxpayers anything or involve the credit-worthiness of the county government. The sale will mostly fund costs associated with the hospital’s expansion, but funding also might be used to refinance existing debt to lower interest rates, if feasible.
IDA bonds through the years have been used to finance a number of economic-development projects, supporting businesses and organizations ranging from the Nature Conservancy and Signature Theatre to Bergmann’s dry-cleaners.
The relationship between the IDA and Virginia Hospital Center goes back to 1978, when the two collaborated for a $9.7 million bond sale. In subsequent years, not counting the upcoming sale, total IDA bond sales for hospital projects have totaled $550 million, although some of that was to refinance already-existing debt.
Virginia Hospital Center is in the midst of a major expansion of its North Arlington main campus, using a 5.6-acre parcel acquired from the county government as part of a land swap.
When the hospital last collaborated with the Industrial Development Authority, in 2010, the hospital’s credit-worthiness was rated as “AA-” by Fitch, one of the major bond-rating houses, which praised its relatively light debt burden, solid operating performance and stability of its market share.