With officials of Northern Westchester Hospital standing alongside him, County Executive Robert P. Astorino said on Monday that he had taken steps that will immediately give not-for-profit organizations access to low-cost borrowing for capital projects, such as the Mount Kisco-based hospital’s $36 million plan to build new operating rooms and modernize patient care units.

As a result, the hospital is expected to save more than $6 million over the life of the project.

Access to low-cost borrowing, which is made available through the county’s Local Development Corporation (LDC), was put at risk last week when Democrats on the Westchester County Board of Legislators rejected legislation sent to them by the county executive – without even a hearing.

Astorino had asked the board to partner with him on the initiative, offering two seats on the LDC’s board. But when the Democrats refused to even consider the time-sensitive legislation, he contacted bond counsel who advised that under state law no approvals by the Board of Legislators were needed to move forward.

“Today’s announcement shows that government can be responsive to the needs of our communities and provide help for the real problems facing our residents,” Astorino said at a press conference at the hospital on Monday. “The county’s Local Development Corporation was formed with two needs in mind – to provide low-cost financing to not-for-profits, so they can enhance the valuable services they deliver; and to create jobs in the process. Government can’t do it all, so it is critically important when partnership opportunities exist or can be created, that we do everything possible to make them successful. Putting the LDC into action is tangible proof of how government and the private sector can solve problems together.”

Through the LDC, Northern Westchester Hospital will be able to access tax-exempt bonds to help pay for its operating room project. There is no financial risk to the county. The obligation for repaying rests solely with the not-for-profit organizations that borrow the money. The LDC simply acts as a conduit to enable the not-for-profits to receive tax exempt status.

Northern Westchester Hospital’s $36 million project encompasses the design, construction and equipping of a surgical suite with six new operating rooms and 13 universal PACU (pre/post-anesthesia care unit) beds.

“A Westchester County LDC is a valuable and efficient way of facilitating financing for area employers, so that we can continue growing and providing valuable services for residents in our community,” said Hatsy Vallar, president of the Northern Westchester Hospital Foundation. “As a not-for-profit, Northern Westchester Hospital was established by the community to care for our community. We are committed to providing the highest level of quality, patient-centered care and having access to low-cost financing helps to make this possible.”

The project is expected to create about 30 jobs directly related to the emergency room, as well as other patient care positions. The $24 million in construction contracts and $10.7 million in machinery and equipment purchases will also create jobs and boost the local economy.

The LDC is now positioned to help other not-for-profit organizations as well.

“The not-for-profit community has expressed tremendous interest in tapping into our LDC,” said Stephen Hunt, chairman of the Westchester County Local Development Corporation. “Tax-exempt financing can produce significant savings for schools, hospitals and other not-for-profits whose budgets are stretched but whose services remain critically important. The LDC provides a way to preserve and expand services without any financial obligation to county taxpayers.”

Marsha Gordon, president and CEO of the Business Council of Westchester, said the LDC was providing a needed catalyst for the local economy. “People tend to overlook the economic importance of the not-for-profit sector. The LDC is helping our not-for-profits to provide services and create jobs that make Westchester County a better place to live and work.”

William M. Mooney Jr., president of the Westchester County Association, also praised the plan, saying:“The Westchester County Association strongly supports the creation of this LDC and the project for Northern Westchester Hospital – one of our most important members. It will benefit the hospital and the entire community by promoting economic development and creating jobs and opportunities.”

Astorino established the county LDC in January to fill a void that has existed since January 2008, when the state’s Industrial Development Agencies, including Westchester’s, lost the power to authorize bonds on behalf of not-for-profit agencies.

In the decade prior to 2008, not-for-profits in Westchester, ranging from the YMCA to Guiding Eyes for the Blind to local fire districts, were able to take advantage of more than $120 million in tax-exempt financing. The role that had been played by the IDA is now filled by the LDC. Created under the state’s Not-For-Profit Corporation Law, the LDC consists of a board that reviews requests from not-for-profit agencies seeking tax-free bonds and other financial incentives.

The logjam created by the Democrats on the Board of Legislators was broken when Astorino received an opinion from the LDC’s bond counsel, Nixon Peabody, that the board’s participation – while sought – was not necessary to approve funding requests. “There is no requirement in Section 1411(a) (of the Not-for-Profit Corporation Law) that requires the legislative body of a municipality to consent to the creation of a local development corporation by the chief executive,” the opinion states. Astorino emphasized that the county’s LDC was set up following state laws and regulations.

The process for obtaining tax-exempt status is fully transparent with each request requiring a public hearing before LDC approval can be granted. Most important to taxpayers, there is no financial risk to the county. The sole obligation for repaying the bonds rests with the not-for-profit borrower. “There was no valid reason to hold up this initiative,” Astorino said. “What the Democrats on the board don’t understand is that our not-for-profits need help right now, our economy needs help right now and people need jobs right now. Endless foot dragging is what gives government a bad name. When government has the tools to help, it needs to put them to work.”

Photo caption (left to right): Stephen Hunt, chairman of the Westchester County Local Development Corporation; Ross Pepe, president of the Construction Industry Council; Hatsy Vallar, president of the Northern Westchester Hospital Foundation; County Executive Robert P. Astorino; Marsha Gordon, president and CEO of the Business Council of Westchester; William M. Mooney Jr., president of the Westchester County Association; Michael Smith, Westchester County Legislator