Fairfield County is getting an unexpected stimulus, after Stamford Health System announced plans to build a new Stamford Hospital facility in one phase of construction through the spring of 2016, abandoning previous plans for multiple phases.
Stamford Health System said it expects the new timetable to cost $450 million, less than the $575 million it had estimated for a multiphase construction project that could have lasted 15 years.
If the construction sector represents a small component of the state”™s economy, it has an outsized impact in terms of spurring spending from area suppliers and vendors. With construction employment running 1 percent below last year”™s levels as of May, Stamford Hospital”™s new construction schedule should provide another needed jolt in the short-term to the local economy, along with Building and Land Technology”™s ongoing development of Harbor Point.
The rationale for the accelerated timetable includes the hospital”™s strong financial performance, favorable interest rates, and the savings from completing the plan in a single phase, according to Brian Grissler, CEO of Stamford Hospital.
“A single phase approach wasn”™t possible before because financing rates weren”™t as favorable as they are now, nor was the ability to access private equity,” said Scott Orstad, a Stamford Hospital spokesman. “Multiphase construction would have allowed us to build at a slower rate to ensure we had the necessary funding along with the ability to temporarily delay construction if the economic climate did not improve.”
For the 2010 fiscal year which ended in September, Stamford Hospital had a $36.7 million surplus on $498 million in operating revenue, with its 7.4 percent operating margin the fourth best in the state. At deadline, the Connecticut Office of Healthcare Access had yet to publish the hospital”™s detailed financial statement for fiscal 2010.
Between 2009 and 2010, the hospital boosted its cash reserves from just under $10 million to approaching $50 million, with another $7 million held in a construction trust. The hospital received a $10 million grant from OdysseyRe, a reinsurance carrier with offices in Stamford, to help fund the master facility plan, and demolition work is already underway on some parts of the hospital”™s properties in preparation for the new facility.
In 2010, Stamford Hospital spent $20 million on architectural planning and other “soft construction costs,” in its words, after landing $133 million in bond financing from the Connecticut Health and Educational Facilities Authority. As Stamford Hospital”™s builders don their hard hats, that figure will get a major boost over three years.
The project is subject to the approval of Stamford”™s zoning board. The hospital recently conducted a successful bond offering that secured $250 million in funding for the project, and it expects additional funding from earnings and donations.
Under the hospital”™s original schedule, an initial phase of construction would have created a new emergency department, new and larger surgical suites, an expanded intensive-care unit, and a consolidated heart and vascular department.
A second phase had called for construction of seven additional stories to the original three-story facility, which would house some 300 private patient rooms and a helicopter landing pad.
The master plan also calls for the development of a larger medical office building on campus, with Stamford Health System having arranged a lease on land for the building.
