CRYSTAL LAKE – Centegra Health System moved a step closer to the completion of its Huntley hospital after it was approved for more than $100 million in bonds from the Illinois Finance Authority.
Earlier this month, the IFA approved the issue of up to $133 million in debt for the new hospital, and Centegra hopes to receive an additional $60 million in bonds in the coming months, according to Executive Vice President and Chief Financial Officer David Tomlinson.
Tomlinson said the bond approval was a crucial step forward in the construction process of the $233 million, 128-bed facility, and the hospital is “progressing right as planned.”
“I think the impact [of the Huntley hospital] is incredible for our community,” he said. “We are bringing care to a community that is growing, and we are bringing it close to home. It’s care for McHenry County. It’s job creation. It’s supporting the local economy. It’s very exciting.”
But the construction of the Huntley hospital has resulted in pushback from other area health-care providers. Both Mercy and Sherman, which has since become part of Advocate Health Care, hospitals have filed lawsuits arguing that the new facility would duplicate services and isn’t necessary.
A Will County judge upheld the decision to approve the new hospital, which Mercy and Advocate have appealed.
“[Bond approval] is the next step they need to finance the hospital,” said Mercy Hospital Vice President Richard Gruber, adding that Centegra “potentially put a lot of money at risk” if the Illinois Appellate Court doesn’t rule in Centegra’s favor.
“There is no concern,” Tomlinson said of a potential hold up in court. “We feel very confident in the appellate court to make the decision in our favor. We don’t anticipate it impacting us.”
Centegra also is facing a potential credit downgrade due to the amount of debt it has taken on, according to a report by Fitch Ratings.
Fitch issued an “A-” rating back in October for Centegra’s $195 million in bond debt, and the report said additional debt would likely result in negative rating pressure.
Construction on the Huntley hospital already is underway. It is expected to open in 2016.
“Things are going as planned,” Tomlinson said. “We don’t’ anticipate any delays in the construction process in relation to building or in appellate court. We’re really excited to bring this hospital to our community.”