A foundation led by Drs. Kiran and Pallavi Patel plans to borrow $85 million to finance some of the costs to build and equip Nova Southeastern University’s new campus in Clearwater.
They plan to borrow the money through bonds issued by the Pinellas County Industrial Development Authority. The Pinellas County Board of County Commissioners will vote on authorizing the bond issue at the board meeting Tuesday.
The new campus is home to the Dr. Kiran C. Patel College of Osteopathic Medicine and the Dr. Pallavi Patel College of Health Care Sciences, a three-story, 325,000-square-foot academic facility at 34000 Gulf to Bay Blvd. that will open this fall. It’s expected to have a $500 million economic impact in the Tampa Bay area.
It’s the most recent in a series of economic development and philanthropic initiatives by the Patels. Dr. Kiran Patel, a cardiologist, built what is now WellCare Health Plans (NYSE: WCG) into a billion dollar company before selling a majority interest in the firm in 2003. Since then, he bought and sold two other managed health care companies. Dr. Pallavi Patel, a pediatrician, is president of Sunstate Managed Care LLC. They’ve made significant donations to University of South Florida and the Straz Center for the Performing Arts and have built a 50-bed charity hospital in India.
The Patels committed $200 million to NSU in September 2017 for the project, including $50 million to fund startup costs and about $150 million to redevelop the property, formerly the location of Clearwater Christian College. They bought the 27 acres for $15.4 million in December 2016.
Drs. Kiran & Pallavi Patel 2017 Foundation for Global Understanding Inc., which owns the property and is borrowing the money, will lease the space to Nova Southeastern University, according to a preliminary statement for the bond issue. The lease runs for 10 years, with two renewal terms of five years each. NSU will pay $25 a square foot for the first five years, and rents could increase 1 percent a year for the rest of the lease term.
Although the preliminary statement calls for issuing $85 million in bonds, Pinellas County commissioners will be asked to authorize up to $100 million in bonds on behalf of the foundation.
There’s no fiscal impact to the county, which has received a bond application fee of $2,000 and will receive a financing fee of $20,000 at the closing to cover administrative costs for the project, according to the agenda for the Tuesday meeting.
Citigroup is underwriting the bonds, Bryant Miller Olive in Tampa is bond counsel, and Foley & Lardner LLP in Tampa is borrower counsel.