Potential financing for California Northstate University’s (CNU) proposed $750 million hospital project in the Stonelake neighborhood will be addressed during a special meeting of the Elk Grove City Council on Aug. 21.
During this public hearing, the council will consider a resolution approving the issuance of tax-exempt hospital revenue bonds “in an amount not to exceed $900 million by the California Public Finance Authority.”
The council will also hear public comments on the matter.
CNU spokesperson Brian Holloway told the Citizen that the first step in CNU’s efforts to secure this funding will be made during the council’s special meeting.
“The local jurisdiction needs to make a finding that the hospital and the purpose of the funds is a public benefit,” he said.
A city staff report for the meeting refers to the hearing as a legal requirement for a government jurisdiction – the City Council – “where the project is to be located.” Both CNU and its affiliated nonprofit, Northern California Health Services and Research Foundation asked the city to hold this Tax Equity and Fiscal Responsibility Act hearing.
Holloway stressed that the council will not be approving or disapproving the project during the meeting.
“It has nothing to do with the approval process or entitlements for the hospital,” he said. “It’s merely just a requirement of the bond funding that the local jurisdiction deems that the purpose of the fund is a public benefit.”
In the event that the council approves the resolution supporting the issuance of tax-exempt hospital revenue bonds, no financial obligations would be accrued to the city.
The bonds would be issued by the California Public Finance Authority on behalf of CNU and its affiliated nonprofit, independent of the city. The city would not be responsible for issuance or repayment of the bond indebtedness.
As for the timing of this special meeting, Holloway said that CNU was not interested in waiting for approval on the project to begin seeking financing.
“The reason we’re doing it now is we didn’t want to get the project approved, (and) then at that point start looking for financing to build it,” he said. “We’re running those two efforts simultaneous.”
If built, the hospital would be a 250-bed facility located adjacent to CNU’s current campus on West Taron Drive. Current plans are for the hospital to be built by 2022.
However, construction cannot begin without the city’s approval, and the site would still need to be rezoned.
CNU’s application for the project is currently under review by city staff.
Additional information about the proposed project and the Aug. 21 hearing is available on the city’s website at www.elkgrovecity.org/cnu.
The City Council's Aug. 21 meeting will held at 6 p.m. at the Elk Grove City Council Chambers, 8400 Laguna Palms Way.