After conducting an RFP process, the organization selected a for-profit developer to partner with in development of the project. However, working with a for-profit developer would mean giving up long-term control and increased leasing costs due to developer returns and payment of property taxes.
Centurion partnered with Infirmary, taking over ownership and financing the project. This resulted in tremendous annual rental savings when compared to traditional for-profit terms. Infirmary retained additional annual capital via an available property tax exemption.
Moreover, the foundation, as a non-profit, was able to finance the project through a local governmental issuer, thereby obtaining a sales tax exemption on materials.
Infirmary benefited through:
- 25-year lease
- Estimated $300,000 annual rent savings
- Construction materials’ sales tax exemption
- $150,000 annual real estate tax exemption
- Defined flat annual rental cost, with no increases over lease term
- Option to purchase facility for $100 at end of lease term, with early buyout option
