Recently, Southcentral Foundation broke ground on a massive children's dental clinic and health services facility in Anchorage. The 110,670-square-foot structure--under construction off Tudor Road in the former parking lot east of Alaska Native Medical Center--will house five stories and a sky bridge leading to an attached garage.
A children's dental clinic will occupy the basement and first and second floors of the building. The remaining floors will house OB-GYN, behavioral health for children, and specialties for youngsters with developmental needs. "The theme of the building was inspired by the Chugach Mountains and incorporates Alaska Native culture in its design," says Chris Bryant, a special assistant to Southcentral Foundation's Resource and Development Department. "It's going to be a beautiful building."
The project, slated for completion in July 2018, allows Southcentral Foundation to finally separate its dental services--and younger patients--from the main hospital. "It will be nice to have a place where kids can feel safe taking care of their teeth and avoid other distractions," Bryant says.
Southcentral Foundation is a nonprofit healthcare organization that provides statewide health, dental, and other wellness services to Alaska Native and American Indian beneficiaries of the Indian Health Service. Part of the funding to construct Southcentral Foundation's new structure is being facilitated by Wells Fargo and the city of Wasilla through tax-exempt bond financing. "They will finance up to $55 million with a fifteen-year term," Bryant says. "The interest rate will be determined."
Once the municipal bond is issued, Wells Fargo will purchase the bond and receive a tax exemption. Ultimately, the financing translates into cost savings for both Wells Fargo and Southcentral Foundation. "We don't have to pay taxes on the interest income that we earn, and we pass that savings on to the customer," says Wells Fargo Alaska Commercial Real Estate Manager Patti Bozzo.
Tax-exempt bond financing allows nonprofits like Southcentral Foundation to finance capital projects with significant interest rate reductions. For example, Bozzo says, "If the market interest rate is 5 percent, the equivalent tax-exempt rate would be approximately 3.5 percent."
Southcentral Foundation's new medical facility is just one example of the many methods organizations statewide are employing to finance infrastructure and other large-scale projects. This article takes a closer look at how public and private sources can be used to fund or facilitate growth in Alaska: from roads and dams to healthcare facilities and housing developments.
Wells Fargo Facilitates Funding for Large Projects
In Alaska, Wells Fargo finances large-scale projects that are typically related to affordable housing, multi-family housing, retail projects, medical facilities, and office buildings. These kinds of projects are generally financed by conventional commercial loans. The loans, which can be characterized by their complex structure, require a guarantor and...