PCDC Press Release, 10/15/2009.
Download press release here (PDF).
Press Contact:
Daniel Lowenstein
C: 646-382-6479
dlowenstein@pcdcny.org
Michelle Shaljian
W: 212-437-3933; C: 347-754-1692
mshaljian@pcdcny.org
AT HEALTH CENTER CONFERENCE, PCDC ANNOUNCES $40 MILLION INVESTMENT FOR PRIMARY CARE IN NEW YORK STATE
In Tight Credit Environment, Landmark New Markets Tax Credit Program Provides Below Market Financing to Expand Primary Care, Create Jobs in Low-Income Communities
October 15, 2009 (Rye Brook, NY) The Primary Care Development Corporation (PCDC), with support from HSBC Bank USA (HSBC), today announced a New Markets Loan Fund - $40 million in low-cost, long term financing to develop primary care centers in economically distressed communities throughout New York State. The landmark investment in primary care is made possible by the US Dept. of Treasury's New Markets Tax Credits (NMTC) Program, and is the largest NMTC transaction to date specifically targeting primary care. The announcement was made at the annual conference of the Community Health Care Association of NYS in Rye Brook, New York.
The $40 million fund will help create state-of-the-art primary care facilities serving an estimated 110,000 patients each year, and will create some 525 permanent jobs and 365 construction jobs. Studies show the multiplier effect of these direct jobs to be roughly twofold in the community.
Tom Manning, Director of Capital Financing for PCDC, said: "PCDC's New Markets Loan Fund offers New York's health centers critical financing that will build primary care capacity in communities that need it most. This helps PCDC meet the enormous demand for primary care in New York, demand that will only grow as New York's primary care initiatives take hold and more people rely on safety net providers for their health care needs."
"HSBC and PCDC have been strong community development partners for over 10 years, and our joint effort through the New Markets Loan Fund represents a landmark program that can serve as a model to finance primary care throughout the country," said Kathleen Rizzo Young, Senior Vice President, HSBC Community Development Department. "This investment represents a unique opportunity to improve both the economic viability and the health of low-income communities. Financing these health center projects will create jobs and physically improve real estate, while also expanding access to high-quality primary care."
The New Markets Loan Fund will provide long-term financing with below market interest rates to community health centers and other health providers seeking to build, renovate, and expand primary care facilities in low income areas. The largest NMTC to date specifically targeting primary care, the program offers flexible terms like below market interest rates and long term financing generally not available in the current credit environment or from other NMTCs.
The loan fund comes at a critical time. Over the last few years, New York State has begun to reverse years of underinvestment in primary care. Recent studies rank New York dead last in the nation in avoidable hospital use and cost, and in emergency room waiting times clear indications of a primary care system in need of major investment.
New York State Health Commissioner Richard F. Daines, M.D., said: "Governor Paterson has made increased access to high-quality primary and preventive care services the centerpiece of his health care reform agenda. Supporting health care centers in economically distressed communities will help make quality primary care more accessible and affordable and improve the health and quality of life for more individuals in need. I applaud the efforts of PCDC and HSBC to offer this opportunity to expand primary care services in New York."
According to the U.S. Department of Health and Human Services, the nation's 1,100 health centers provide 143,000 jobs and generate $12.6 billion annually in some of the country's most economically deprived neighborhoods.
"This partnership is great news for the Bronx and other underserved communities in New York State. In this economic downturn, credit is very tight and low-income communities suffer the most," said Congressman Jose Serrano (D-Bronx), who, as chairman of the Financial Services and General Government Appropriations subcommittee, oversees the CDFI Fund and NMTC program. "PCDC's New Markets Loan Fund represents a big step forward for New York State, by giving health centers much-needed access to capital, which in turn will improve access to care for tens of thousands of New Yorkers."
"The New Markets Tax Credit is an innovative program designed to bring the private sector and nonprofits together to spur investment in low-income communities. The PCDC-HSBC New Markets Loan Fund will create hundreds of jobs, improve commercial space, and expand primary care for those most in need," said CDFI Fund Director, Donna J. Gambrell.
Health center leaders applauded the announcement.
"We are seeing more patients then ever. We need to expand, but credit is tight, even strong organizations like ours," said Paloma Hernandez, CEO of Urban Health Plan, a major community health center network located in the Bronx and Queens. "Good financing options like the New Markets Loan Program will help health centers expand to meet the needs of their growing patient population."
"Access to primary care is a major issue in rural areas," said John Rugge, MD, CEO of Hudson Headwaters, a network of health centers in the Adirondacks. "Our primary care centers serve thousands of patients, but without access to affordable capital to expand, thousands more will go without. The financing that PCDC is deploying throughout New York State will help us meet these enormous capital needs."
"CHCANYS works in partnership with PCDC to help New York's health centers access the capital they need to strengthen and expand their operations," said Elizabeth Swain, CEO of the Community Health Care Association of New York State. "We are thrilled that PCDC and HSBC are able to offer this financing option at a time when many health centers are struggling to secure the capital they need to expand."
Allison Coleman, CEO of Capital Link, a national nonprofit that connects health centers with capital funding sources, said "We advise our clients to look for New Markets Tax Credit opportunities, but rarely are they designed specifically for community health centers. New York's health centers are fortunate to have this kind of opportunity. We need more of these types of low-cost lending programs to expand primary care throughout the country."
About the New Markets Tax Credit Program
The New Markets Tax Credit Program is a program of the U.S. Treasury's CDFI Fund, and permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities.
About Primary Care Development Corporation (www.pcdcny.org)
Primary Care Development Corporation (PCDC) is the nation's first and largest Community Development Financial Institution (CDFI) specifically investing primary care (and the only one in New York State). To date, PCDC's programs have leveraged a total investment of $240 million for 77 primary care capital projects in underserved communities across New York State. This investment has transformed 630,000 sq. feet of space into fully functioning primary care practices, while creating 6,600 construction jobs and 2,200 permanent jobs (approximately 4,400 including multipliers). This additional capacity now accommodates an additional 1.7 million medical visits annually by 550,000 underserved New Yorkers.
About HSBC Bank USA, N.A.
HSBC Bank USA, N.A. has more than 470 bank branches throughout the United States, with over 375 in New York State. The Bank also operates in Florida, California, Washington, D.C. Pennsylvania, New Jersey, Delaware, Oregon, Washington, Maryland, Illinois, Connecticut and Virginia. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirectly-held, wholly-owned subsidiary of HSBC North America Holdings Inc. HSBC USA Inc. is one of the nation's largest bank holding companies by assets. Deposits in the United States are offered by HSBC Bank USA, N.A. Member FDIC.
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