[BTinSF]

Friday, November 14, 2008
S.F. General marshals its construction troops
San Francisco Business Times - by Chris Rauber

Now that San Francisco voters have overwhelmingly approved an $887.4 million bond issue to rebuild San Francisco General Hospital, the safety net hospital is wasting no time in moving ahead with preparations for the massive project.

Gene O’Connell, S.F. General’s longtime chief executive officer, said a Nov. 20 San Francisco Planning Commission hearing will be “the final step” in the environmental impact report and permitting process for the roughly 442,000-square-foot, 284-bed rebuild.

The hospital, run by the San Francisco Department of Public Health, is making plans to start preliminary elements of construction early next year. Several trailers that house health-care programs in the vicinity of 23rd Street and Potrero Avenue will be removed to make room for a temporary parking lot, O’Connell said. Early work digging up old underground utilities could begin by next March, and certainly by late spring.

Groundbreaking and more significant construction are slated to start in the fall of 2009. Officials expect the new structure to be open for business by January 2015.

Hospital officials also are preparing to submit an application to state regulators asking for a two-year extension on meeting state seismic deadlines, from January 2013 to 2015.

Without such an extension, hospitals are expected to meet an early 2013 requirement to rebuild or retrofit any inpatient structures that don’t meet California’s hospital seismic safety laws. To gain an extension, a hospital must prove it has a seismic plan well under way.

Other upcoming milestones include the second phase of a design review, scheduled for January, and various submissions due to the Office of Statewide Health Planning and Development beginning in January, according to a timeline created by Ron Alameda, the Department of Public Works’ project manager for the San Francisco General rebuild. OSHPD is in charge of monitoring hospital construction projects and compliance with seismic safety requirements.

Although the current financial crisis has affected construction plans for a number of hospitals locally and nationwide, O’Connell and other city officials don’t expect it to disturb their plans to float bonds for the project.

Once the Nov. 4 election results are certified, and the San Francisco Board of Supervisors approves the bond issue and authorizes the spending it supports, city finance experts will try to “time the market” to get the best interest rates they can.

If need be, they can use other financial instruments, such as so-called bond anticipation notes or BANs, to fund early -stage construction.

One insider said the city will likely go out for about $100 million in phase one bonds, enough to pay for much of the early construction, noting that “by January, we expect the (bond) market to look much better.”

Overall costs for the rebuild are likely to top $1 billion, and could exceed $1.7 billion, including bond financing charges.

Officials are buoyed by an August boost to San Francisco’s credit rating by Moody’s Investors Service. As a result of that move and the Nov. 4 election returns supporting the project, “we’re all a little bit more optimistic” about having a successful bond issue, O’Connell said.

crauber@bizjournals.com / (415) 288-4946

Source: http://sanfrancisco.bizjournals.com/...7/story19.html