Up to $855 million in tax-exempt bonds could help Novant Health finance projects across the Carolinas, including upgrades at facilities in the Cape Fear region.

Proceeds from the sale of the bonds would help fund various Novant projects, including the construction of Scotts Hill Medical Center, along with energy-related projects and routine capital expenditures at other Novant facilities in New Hanover, Brunswick and Pender counties. Bond proceeds would also help finance projects at other facilities in the Charlotte and Winston-Salem areas and on Hilton Head Island.

New Hanover and Pender county leaders recently held public hearings on the issuance of the bonds, a procedural step that's required in each jurisdiction where bond proceeds will be spent. According to a public notice, Brunswick County will hold a hearing on the bond issuance on April 21.

A public hearing is required for the issuance of certain tax-exempt bonds as mandated by the Tax Equity and Fiscal Responsibility Act of 1982. The National Finance Authority would issue the bonds, said Charles Boyer, who spoke on behalf of the finance authority and Novant at a New Hanover County Board of Commissioners meeting this week.

“It is required by federal tax law that you host this hearing in every jurisdiction where the bond proceeds will be spent,” he said. “In no way is the county responsible for the debt or have any liability for the debt, it is just a federal requirement.”

Novant aims to close the transaction and have the bonds offered in May, a Novant spokesperson wrote in an email to the Business Journal. Bonds are one part of the company’s “diversified finance strategies to best leverage available resources.” 

“Novant Health uses tax-exempt bond financing as part of our long-term community investment strategy,” the spokesperson wrote. “Bond proceeds support efforts to increase access to care.”

Up to $262 million in bond proceeds would go toward Scotts Hill Medical Center, a facility under construction near the county line between New Hanover and Pender counties. Novant broke ground on the medical center in 2023, and construction is “progressing,” with officials targeting an opening in 2026, according to the Novant spokesperson.

The completed medical center will include 74 inpatient beds, eight operating rooms, endoscopy procedure rooms, an emergency department, imaging and laboratory facilities and other support services.

The bonds would also fund energy and routine capital projects at several local facilities. 

New Hanover Regional Medical Center would receive a maximum of $65.9 million for energy projects, including the acquisition, development, construction, improvement or equipping of energy-related improvements, along with up to $62 million for routine capital expenditures. New Hanover Orthopedic Hospital would receive up to $15.1 million for energy projects and up to $13 million for routine capital projects.

Brunswick Medical Center in Bolivia is set to get up to $21.2 million for energy projects and a maximum of $16.3 million for routine capital projects, while Pender Medical Center in Burgaw would get up to $7.7 million for energy projects and up to $3.2 million for routine capital projects from the bond proceeds.