HONOLULU (HawaiiNewsNow) - State lawmakers have approved an $80 million plan to help St. Francis Healthcare System renovate the East facility in Liliha. This comes as the Hawaii Medical Center bankruptcy nears closure. Hawaii Medical Center is expected to transfer assets and property back to St. Francis very soon, maybe as early as this week and the preliminary framework for the East facility is underway.
The $80 million would come from special purpose revenue bonds. If all goes as planned St. Francis would get the money at a low interest rate. The underwriter would not have to pay any tax on the earned interest. And the state benefits by having a service that helps the community, in this case more hospice space or long term adult care.
"Long term care, we're short about 200 to 250 beds statewide. It's another reason to have augmented services on long term care it helps the health economics of our state very significantly," said Sen. Josh Green, (D) Senate Health Committee Chair.
Hawaii Medical Center still hasn't officially transferred assets back to St. Francis but that's expected soon. Lawmakers went forward with the bond bill early so they and St. Francis wouldn't have to wait until next session.
So what's the risk of the state vouching for a company that has been involved in shaky financial situations? It depends on who you ask.
"The risk would be if we don't make a good judgment call based on their assets and ability to do the revenues to support the bond the state could be left holding the bag and we don't want to see that," said Sen. Green.
"There is actually no risk to the state. Special purpose revenue bonds are the sole liability and responsibility of the borrower in this particular case St. Francis," said Luis Salaveria, Department of Budget and Finance Deputy Director.
The Finance Department will review the plan. If approved St. Francis would have up to five years to prove they'll pay back the money but the hope is the next step would happen much sooner.
The West facility in Ewa Beach it is not involved in the bond money, mainly because lawmakers want -- and expect -- movement on that property to happen much sooner.