Aspen hospital expansion plans move ahead |

Aspen hospital expansion plans move ahead

John Colson
The Aspen Times
Aspen, CO Colorado

ASPEN ” The plans to expand and renovate Aspen Valley Hospital ” at an estimated cost of $100 million or more ” are now in the hands of City Hall staff members.

The hospital recently turned in its conceptual proposal as a Planned Unit Development document, which is intended to provide greater flexibility during the review process.

David Ressler, the hospital’s CEO, said the city has indicated that the staff review should be completed by June, after which the city’s Planning and Zoning Commission is expected to schedule public hearings on the proposal.

Ressler also said that, despite the financial storm clouds darkening the nation’s skies these days, he is not worried about finding the money to pay for the hospital’s expansion plans.

The hospital district, which encompasses essentially the same area as Pitkin County with the exception of the Crystal and Fryingpan river valleys, announced plans late last year to triple the size of the hospital and add a three-level underground parking garage at the facility’s campus on Castle Creek Road.

The hospital is projected to grow from its current 71,000 square feet to about 214,000 square feet.

The expansion will take place in four phases over several years, the first of which is nearing completion now. The hospital is almost finished with a $6 million expansion of the obstetrics and birthing wing, and soon will begin renovation of the former obstetrics ward.

According to Ressler and hospital spokeswoman Ginny Dyche, the hospital has begun working on some of the details and the design of the second phase of the multiyear project. The second phase, Ressler explained, will focus on the patient care unit; on construction of the parking garage, which is to be located between the main hospital building and Castle Creek Road; and a portion of the planned medical office space for local doctors; among other additions.

Phase three, he said, will bring expansion of the emergency room, radiology and surgery departments. Phase four, he said, calls for renovation of the existing hospital building. The existing hospital building will be updated last to allow normal operations to continue in the new sections (built in the earlier phases) while the existing facility is rebuilt.

The first phase of the project, expansion and renovation of the obstetrics department, was paid for with money left over from an earlier bond issue approved by the district’s voters, and some of the hospital’s cash reserves.

But for the coming phases, Ressler said, the hospital will turn to other financing options. Those likely will include some combination of using cash on hand; asking voters to approve increased debt; and seeking philanthropic assistance from wealthy supporters.

Ressler said the hospital’s finances continue to improve thanks largely to a revamped billing department. He said the hospital’s reserve account now stands at around $30 million, or enough to continue operations for approximately 220 days without taking in any cash. National standards call for hospitals to have anywhere from 120 to 180 days of operating reserve on hand.

In addition, Ressler said, the hospital’s bond rating has improved to the point where it is now given a BAA3 rating by Moody’s Investors Services, a nationally respected source of credit ratings and risk analysis.

That rating, according to Moody’s Investors Services, means that investments in AVH would be “subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.” It is the lowest-quality tier of the company’s long-term risk assessments, but above the “speculative” or “junk” rating levels.

Ressler said he is not worried that the current turmoil in the national financial markets, triggered by the collapse of the subprime mortgage industry, might pose a problem for the sale of bonds to finance the hospital’s project.

“Certainly, it’s something we need to be thinking about,” he said. But he said he’s had no indication from Terry Collins, the hospital’s chief financial officer, that trouble might be brewing.

Given the hospital’s improving financial reports, its growing cash reserves and its record of paying its bonded indebtedness obligations, he hopes that “Moody’s will continue to look at Aspen Valley Hospital favorably.”

Although the exact mix of financing tools for the project won’t be known for some time, Ressler said, “It’s some sort of public-backed financing.”

And, he said, “It’s probably a couple of years before we begin construction” on the remaining phases.


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