The Virginia Home at 1101 Hampton St. in Richmond. Plans are in the works to relocate the nursing home to a new-construction facility that would be built in Hanover County. (BizSense file)
The Virginia Home is looking to the bond market to help fund its move from the city’s Byrd Park neighborhood to a new residential nursing facility in Hanover County.
The nonprofit home for adults with disabilities has begun the process to be able to issue up to $70 million in industrial revenue bonds to support construction of a 160-bed, 190,000-square-foot facility near the intersection of Pole Green and Bell Creek roads.
The one-story Hanover facility is anticipated to cost $134 million, according to a state filing. It would replace Virginia Home’s current 130-bed facility at 1101 Hampton St., which overlooks Swan Lake and Shields Lake at Byrd Park in Richmond.
The Virginia Home stated in a certificate of public need (COPN) application filed with the state in May that it expected to pay for the new facility through multiple funding sources. The document specified that the organization expected to use a combination of a fundraising campaign, endowment funds, reserve funds and the sale of the Richmond facility, which was anticipated to generate $15 million, to finance the move to Hanover.
The Richmond property, which is zoned single-family residential (R-5), was most recently assessed at $18.2 million, per online city records.
The COPN stated that the organization expected to pay $8.7 million to acquire the 71-acre site in Hanover where it plans to build the new facility, which would have a direct construction cost of $98.2 million.
The bonds the organization is vying for are being issued through the Hanover Economic Development Authority, which would act as a conduit for The Virginia Home to tap the public bond market.
However, the bond debt would not be tied to the county and the proceeds of the bond sale would belong to the nonprofit. All payments on the bonds would be made by the nonprofit.
Hanover Economic Development Director Brandon Turner said the financing approach is a common one in local government and something Hanover’s EDA has done before.
The Virginia Home CEO Doug Vaughan declined to comment for this article when reached this week.
In exchange for acting as a bonds-issuance vehicle, the EDA would collect a fee of one-tenth of 1% of the outstanding bonds annually until the nonprofit pays off the associated debt. Turner said exactly how much money would come to Hanover hasn’t been determined yet.
“It’ll be a strong source of revenue,” he said, and added the money would be earmarked by the county for economic development purposes.
Turner said Hanover is eager to see The Virginia Home project be successful, and that the new facility stands to introduce new investment and jobs in the county, specifically an area that’s home to a growing number of medical and healthcare facilities.
“The more we learn about the project, the more we love it. It’s a good organization. This is allowing them to move into a modern and efficient facility,” Turner said. “It brings jobs and investment into our community on Pole Green, which is becoming a bit of a medical corridor.”
The project site is adjacent to The Shoppes at Bell Creek, which is anchored by a Food Lion, and consists of two, unaddressed parcels, per the COPN application.
The EDA voted last week to initiate the approval process for the bond issuance, Turner said. The Board of Supervisors is expected to review the proposal next month, and then the EDA will finalize the approval needed for the agreement. The fine details of the bonds issuance, such as the specific amount of bonds to be sold, are still being worked out.
The Virginia Home provides residential, nursing and therapy services to adults with disabilities at its location on Hampton Street in the city. Vaughan told BizSense in May that the nonprofit intended to sell the facility and put the proceeds from the sale toward the new Hanover project.
The current facility dates to the 1930s and has been expanded twice over the decades. The Virginia Home has determined the property lacks the space necessary for future expansion and isn’t suitable for renovations that would accommodate modern equipment and services.
It has said it intends to relocate to Hanover around late 2027.