University Hospital’s (UH) ‘Vision 2010’ expansion campaign saw the construction of several new hospital facilities and upgrades to existing facilities, that significantly increased UH’s ability to serve patients. Thanks to imaginative leadership the community and UH, the expansion plan committed to hiring an unprecedented number of local union contractors and vendors for the construction and procurement operations of these new and upgraded facilities. All of which greatly expanded the already significant positive economic impact of Vision 2010’s new investment.
Included in the Vision 2010 plan was the construction of the Seidman Cancer Center and the Ahuja Medical Center. Subject to the same commitments to local hiring and vendor selection as the rest of the plan, these facilities were also partly financed by EB-5 investment capital.
The question, then, is why did UH opt for using non-traditional EB-5 financing to help build these facilities? Certainly, as an established institution with more than 100 years of operational history and annual revenue measured in billions of dollars, UH could have found traditional lenders willing to commit to the project.
Though financing from conventional markets was available, UH leadership investigated funding options from a number of alternative sources and determined that EB-5 financing offered the UH the greatest value, when taking into account all aspects of the project. Additionally, the timing of this project coincided with the lingering aftershocks of the Great Recession, which further increased the cost of investment capital coming from traditional sources. So UH opted to take advantage of CiF’s EB-5 financing, a decision that proved timely and cost effective.
In fact, the cost savings gained from using CiF EB-5 funding as opposed to traditional lenders allowed UH to allocate funds that would have otherwise been spent on interest charges into other areas of operations such as community healthcare outreach initiatives.
CiF was pleased to partner with UH on its innovative Vision 2010 system wide expansion and to have been able to provide financing for the expansion of one of the premier healthcare institutions in the US. The University Hospitals EB-5 Project has shown that EB-5 financing can effectively be used to finance catalytic developments that generate significant community dividends while also providing cost savings to borrowers.