County to lend new $ 100,000 community endowment as parties await approval of hospital sale
NEW HANOVER COUNTY – New Hanover County is expected to lend $ 100,000 to the newly formed recipient of $ 1.25 billion in government revenue from the sale of the hospital.
The short-term, interest-free loan is intended to help the new endowment fund legal, advisory and financial services pending the closing of the sale – a multi-month process expected to end in the first quarter of 2021.
Related: Commissioners Approve Landmark Vote, Selling NHRMC to Novant Health in Billion-Dollar Deal
Previously called the “Community Foundation,” county officials authorized the incorporation of the documents for the New Hanover Community Endowment, Inc. when they approved, 4-1, the sale of the county-owned New Hanover Regional Medical Center. at Novant Health.
The Endowment is designed as a 501 (c) (3) nonprofit charitable corporation, but has not received formal approval to operate as one. His ability to carry out actions with the proceeds of the sale of the hospital is fully dependent with the approval of the NC Attorney General.
Shortly after Commissioners approved the multibillion-dollar sale, Stein’s office announcement he was closely reviewing the transaction to ensure full compliance with state law.
The community foundation loan must be repaid within 30 days of receipt of the proceeds of the sale from the hospital associated with the closing of the sale.
Even if the closing does not take place, the foundation must return the unspent funds to the county. The county taps into excess profit distributions from its ABC board – not its general fund – to fund the loan.
Under the proposed deal, which commissioners will vote on Monday, the funds can also be used to recruit an executive director to lead the foundation.
The county hired a financial advisor, SOLIC Capital Advisors, LLC, to oversee the process of winding up the sale. According to an engagement letter from the firm, it will charge a $ 20,000 fee and six-figure monthly service fee ranging from $ 100,000 to $ 225,000, with higher fees within three months of the sale and fees. lower in the year following the sale. . These services would be provided to the county – independent of the county’s financial assistance offered for the endowment.
If the sale goes through, the community endowment will receive $ 1.25 billion, the lion’s share of the net proceeds. An additional $ 300 million will go to the County Revenue Stabilization Fund; $ 50 million will go to a new county-run mental and behavioral health fund; $ 200 million will be saved to help stabilize the transfer of 7,500 NHRMC employees to Novant; $ 100 million will cover the closing obligations.
Managed by an 11-member board, the meetings and decisions of the community foundation were designed to take place out of public view, in order to reduce its politicization. Whether or not this council can function in private depends on the approval of the GA.
The board of directors will have access each year to 4% of the total market value of the endowment, starting at approximately $ 50 million. Funds can be used for various local purposes including, but not limited to, public education, health and social equity, community development, public safety, etc.
New Hanover County previously proposed its appointees to the board when it approved the sale:
- Spence broadhurst (PAG member, former mayor of Wilmington)
- Dr Virginia Adams (member of PAG, dean of the UNCW School of Nursing)
- Hannah gage (PAG member, former media director and UNC BOG member)
- Stedman stevens (CEO of Vū Systems)
- Shannon winslow (strategic account manager for RxBenefits Inc., according to the Wilmington Business Journal)
The remaining six members will be appointed by a new hospital board, which is appointed by the current NHRMC board.
Send advice and feedback to Johanna Ferebee Still at [email protected]