Oroville Hospital gets funds for 5-story medical tower, expects to add 700 jobs
Oroville Hospital is expected to add roughly 700 new jobs when construction is complete on a new five-story medical tower in 2022.
“The jobs will be all the way across the board,” said Robert Wentz, chief executive of the independent Northern California hospital, on Thursday. “With the new services, we’ll be adding a lot of technical positions in the neurosurgery and cardio-thoracic departments, but all the positions we have in the hospital will be expanded.”
The hospital, about 70 miles north of Sacramento, completed a key step Wednesday to ensure that the project can go forward by selling $200 million in bonds needed to fund the work, Wentz said. He said he wasn’t certain how the offering would go but decided to let employees watch the sale on a monitor in a lounge at the hospital.
It turned out there was far more demand than supply for the bonds, however.
“In 24 minutes, the $200 million just gets snapped up,” Wentz said. “We thought maybe we would get two times the amount of orders than what’s offered....We see the orders going up to $350 million, then $500 million, then $700 million, then $800 million. We didn’t think that was possible, but it continued, and the orders that came in were $1.035 billion.”
Morgan Stanley, the investment bank guiding Oroville Hospital on the deal, will settle the purchases. The bonds have different maturities over a 35-year period, with the near-term bonds paying lower interest than longer-range ones. The effect interest rate for Oroville Hospital will be 4.5 percent, Wentz said, and the debt service will be $10 million to $12 million a year.
“I called one of our advisers to ask: ‘How normal is this?’” Wentz said. “He’d been in this business for 37 years, and he told me, ‘I’m taking a picture of my computer screen right now.’...I was also excited that this market, this big huge financial market we have in this country still feels like an independent hospital in California is still a good investment.”
The hospital addition will allow Oroville to add state-of-the-art equipment and space for widening the types of cardio-thoracic surgery and neurological procedures it can perform, but it will also add more rooms for patients. The hospital will grow to 211 beds from 133 today. Employment would grow to 2,300 from 1,600 now.
Generally, Wentz said, when hospitals add jobs, the surrounding community sees employment growth 2.6 times what the hospital sees as the incoming hospital employees buy homes, cars and more. If that so-called multiplier effect holds true, Butte County and surrounding areas would see 1,820 new jobs.
The new medical tower, designed by a team in Cannon Design’s Los Angeles office, will have a glass exterior, a first-floor atrium that soars 30 feet and a walking garden on the second floor for women in the obstetrics units.
This story was originally published February 14, 2019 at 6:53 PM.
