Saratoga County’s new Capital Resource Corp. approved its first application Thursday, agreeing to refinance $25 million of existing debt for Saratoga Hospital.
The refinancing will get the hospital a lower interest rate than it now pays and is expected to save $4.4 million over the next 21 years, according to Mike Battle, the hospital’s director of financial accounting.
“It will benefit us as a whole. It’s a challenge every year to balance our budget,” he said.
The debt was incurred by the hospital in 2003-04, when it was expanding its first outpatient facility, the Wilton Medical Arts building at Northway Exit 15.
In a letter, hospital officials said the bonds are currently at a 5.72 percent interest rate, and the hospital’s financial consultant expects to be able to refinance — using tax-exempt bonds issued by the Capital Resource Corp. — at about 3.14 percent.
The nonprofit’s tax-free financing will also need to be approved by the county Board of Supervisors, which is scheduled to act Jan. 15.
The Saratoga Springs hospital has continued to expand and renovate since the Wilton center was built, reconstructing its emergency room and now completing a new urgent care center in Malta. Battle said such projects are needed to keep up with changes in medical technology and patient expectations.
Capital Resource Corp. Chairwoman Anita M. Daly said the refinancing fits squarely within the corporation’s mission to help community nonprofit organizations.
“Assistance to Saratoga Hospital could be very beneficial to all the residents of the county,” she said.
This was the first application to be received by the corporation, which was set up last fall.
The county’s Industrial Development Agency used to be able to provide financing to non-profits — and in fact issued the original bonds for the Wilton Medical Arts facility — but a change in state law in 2008 prohibited IDAs — which are supposed to concentrate on private-sector job creation — from financing private nonprofit organizations. That has led Saratoga County and other municipalities to set up separate capital resource corporations to handle that role.
The hospital will pay an application fee of about $131,000, which will be retained by the Capital Resource Corp. for future use.
The corporation has close links to the county IDA. Two of its board members — Richard Dunn and Arthur Johnson — are also on the county IDA board, and Larry Benton is serving as CEO of both organizations.