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DCH closes on $16.9M federal loan

IRON MOUNTAIN — Dickinson County Healthcare System on Tuesday received a long-awaited $16.9 million Rural Development loan, seven months after the U.S. Department of Agriculture funding was promised.

The assistance was sought to enable DCH to refinance debt and acquire new equipment. Much of that was accomplished in recent months in anticipation of closing on the borrowing.

“We are closed,” DCH Board Chair Margaret Minerick confirmed Tuesday afternoon. “We’re all set to go.”

At the time of its first USDA application in August 2019, the hospital reported $14 million in outstanding bank loans, including a pending balloon payment of nearly $10 million. But a request for a $26 million loan stalled as federal officials said they wanted evidence of financial stability through 2020.

As an alternative to federal borrowing, DCHS was prepared in early 2020 to sell $32 million in revenue bonds. That plan, however, was shelved when the coronavirus outbreak disrupted financial markets.

In August 2020, the county board was informed the hospital again would seek a USDA loan, but this time for $16.9 million. The lower amount was made possible by COVID-19 assistance received through the federal CARES Act, as well as a better financial performance, hospital officials said.

The 27-acre parcel on U.S. 2 that includes Dickinson County Memorial Hospital and related clinics was purchased by DCH in 1994 for $700,000. In exchange for the county approving the hospital’s request to seek revenue bonds for construction, the county required it be deeded the property. Since that time, it has leased the U.S. 2 site to DCH for a nominal fee.

As part of the federal loan application, the county board agreed last year to allow the deed to be put in the name of DCH.

Jim Anderson can be reached at 906-774-3500 ext. 226 or janderson@ironmountaindailynews.com.

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