Phoenix Children's Hospital Uses New Market Tax Credit Financing for 9th Floor Development Project

PHOENIX, Ariz. (March 2, 2015) -- The Phoenix Community Development and Investment Corporation (PCDIC) is pleased to announce that Phoenix Children’s Hospital (PCH) recently closed a New Market Tax Credit (NMTC) loan with PCDIC and U.S. Bank CDC  to build out the 9th Floor of the Hospital.  

The 9th floor will build out 45,000 square feet by adding 48 private rooms including equipment and furnishings for the pediatric acute care population.  Construction on this $15.7 million project is expected to commence in January of 2014 and be completed in November 2015. This project is projected to create 90 full-time equivalent positions with an average wage of about $65,500 and up to 50 construction jobs.

According to the project job creation, average pay, and new construction parameters, the project is anticipated to generate almost $858,000 over five years in direct revenue to the City of Phoenix. Sales tax revenues spike in the first year due to taxable new construction expenditures. An additional $286,000 will be generated through indirect impacts. The total five year revenue impact to the City of Phoenix is $1.14 million.

Once opened, the 9th floor unit will ensure sufficient acute care capacity and reduce, if not eliminate, the need to revert to semi-private occupancy during peak season to support patient volumes. The only groups of subspecialty patients targeted for this unit are patients with complex orthopedic diagnosis/surgeries such as spinal fusion, NUSS procedures, and osteotomies. Several rooms will be equipped with automatic lifts to support this population as well as other patients with significant obesity. This unit will support patients with both medical and surgical diagnosis not required to be placed in other units within the Hospital.

PCH is Arizona’s only licensed children’s hospital and among the largest freestanding facilities of its kind in the country with 363 licensed beds. PCH offers world-class care in more than 70 subspecialty fields of pediatric medicine.  Last year PCH had 13,834 inpatient admissions; 76,006 visits to the Emergency Department; 351,060 physician visits; and 15,424 surgical procedures.  US News and World Report Best Children’s Hospitals honored five PCH programs in 2013-14 – Cardiology; Neonatology; Nephrology; Neurosurgery/Neurology; and Urology

“U.S. Bank is focused on revitalizing struggling communities by investing in important projects with a strong community benefit such as the Phoenix Children’s Hospital,” Maria Bustria-Glickman, vice president of U.S. Bancorp Community Development Corporation, said. “The project is particularly exciting because it provides specialized pediatric care for children and families who may not have access to such care where they live.”

“One of the goals of the New Market Tax Credit Program is to provide community good and services, such as medical and health care, to low income communities and this PCH project addresses this vital need in our community”, said George Dean, PCDIC Board member and President & CEO of the Greater Phoenix Urban League.   

Statistics maintained by the Hospital indicate that nearly 60% of inpatient discharges in 2013 were for patients of the state’s Medicaid program, called Arizona Health Care Cost Containment System (AHCCCS). Consistent with the discharge statistic, approximately 50% of all net patient service revenues recorded by the Hospital in 2013 were from AHCCCS, reflecting the fact that the AHCCCS pays the provider hospital a lower percentage of gross charges than do contracted health care insurers.

The PCDIC NMTC Program seeks to provide below market rate commercial real estate loans to developers, small businesses, and mission-focused nonprofits to encourage neighborhood revitalization and stabilization in qualified low income communities in Maricopa County.   While the NMTC program supports a range of economic development strategies, the NMTC program is highly effective in attracting private sector investment to Maricopa County NMTC census tracts, characterized by highly stressed demographics, including a poverty rate above 30 percent and/or family median income that is 60 percent or below the Phoenix Metropolitan Statistical Area's median income.

About Phoenix Community Development and Investment Corporation (PCDIC)

PCDIC is a local 501© 3 nonprofit which targets commercial real estate loans within Maricopa County to encourage private sector investment in qualified low-income communities. Since 2002, PCDIC has received $263MM in NMTC allocations which has been used to provide 29 projects valued at $791MM with $336MM in NMTC financing. Projects include local non-profits, hospitality, retail, industrial, commercial offices and medical facilities which can be found at phoenixnewmarkets.com/projects.  PCDIC has attracted more than $455MM in additional private investment, created 9,390 new jobs, 3,877 constructions jobs and retained 171 jobs in Phoenix, Ariz.

 For more information visit PhoenixNewMarkets.com or call Roberto Franco at 602-495-5247.

About U.S. Bancorp Community Development Corporation

With nearly $15.8 billion in managed assets as of Dec. 31, 2014, U.S. Bancorp Community Development Corporation, a subsidiary of U.S. Bank, provides innovative financing solutions for community development projects across the country using state and federally sponsored tax credit programs. USBCDC's commitments provide capital investment to areas that need it the most and have contributed to the creation of new jobs, the rehabilitation of historic buildings, the construction of needed affordable and market-rate homes, the development of renewable energy facilities, and the generation of commercial economic activity in underserved communities. Visit USBCDC on the web at www.usbank.com/cdc.

About Phoenix Children’s Hospital (PCH)

Phoenix Children’s Hospital is an Arizona 501©3 nonprofit corporation that provides Hope, Healing and the best Healthcare for children and their families.  With family-centered care that focuses on the need of the child first and values the family as an important member of the care team, Phoenix Children’s Hospital provides excellence in clinical care, service and communication on behalf of the children of Arizona.

PCH Contact:   Debra Stevens, Director of Marketing and Communication dstevens@phoenixchildrens.com