City of Wheeling To Help Secure Financing for Demolition of Former OVMC Buildings
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WHEELING -- The Wheeling Municipal Building Commission has put the wheels in motion to help West Virginia University Health System secure financing needed for demolition of the former Ohio Valley Medical Center buildings.
The Municipal Building Commission recently held a public hearing and a third and final reading on an ordinance to issue lease revenue bonds to help fund the demolition and site preparation at the OVMC campus, where WVU Medicine will construct a new, regional cancer treatment center that is expected to represent a total investment of more than $80 million.
WVU Medicine has already selected New Jersey-based company F.R. Beinke Wrecking Inc. to handle the massive asbestos abatement and demolition project at the former hospital campus, where a total of seven large buildings will be demolished. The contract awarded was for just under $7 million. The city of Wheeling, which owns the property, and the Ohio County Commissioners have vowed to commit $2 million each toward the demolition and site preparation. WVU Medicine/WVU Health System is expected to provide up to $4 million to cover the rest of the costs to get the site ready for construction.
Some environmental consulting, engineering and removal of some underground tanks -- on top of the asbestos abatement, demolition and site prep that will be part of the demolition contract -- have already been performed at the site, according to Wheeling City Manager Robert Herron.
The city manager this week explained that the financing package being spearheaded by the city's Municipal Building Commission will be for the portion of WVUHS's commitment to the demolition. WVU Health System will repay 100 percent of these funds with payments on what will essentially be a 30-year lease.
"The payments are backed by a land lease on the property," Herron said. "The Municipal Building Commission ... passed the ordinance authorizing the issuance of Municipal Building Commission bonds for that purpose. The key here is that this is a West Virginia University Health System project, as the Municipal Building Commission couldn't issue the bonds without collateral."
In this case, the collateral for the financing will be the land itself, as well as the WVU Health System's lease commitment to build the new regional cancer center there.
Herron noted that banks from all over West Virginia, Ohio and Pennsylvania will bid on this project, vying for the opportunity to provide the financing package for the hospital's portion of the OVMC demolition. While the language in the ordinance states that the lease revenue bonds will be "in the aggregate principal amount of not more than $20 million to pay the costs of the project," the bond issue will actually be in the amount of around $3.9 to $4 million.
Once the financing is in place, the contractor will begin work on the demolition -- which is expected to begin this fall and be completed by the end of the year, officials indicated.