East Ohio Hospital, LLC is raising capital from EB-5 investors to expand its services to add a behavioural health facility for drug and alcohol treatment, which will include inpatient and outpatient health units and a residential rehabilitation unit ("the Project").
East Ohio Regional Hospital is a 178-bed short-term acute care hospital serving Martin’s Ferry, Ohio (Belmont County) and the surrounding region. It offers emergency services, surgical services, inpatient care, outpatient procedures, and has an onsite retail pharmacy, lab, and skilled nursing facility.
The project locations qualifies as a Targeted Employment Area (TEA) because it has an unemployment rate that exceeds 150% of the U.S. national average unemployment rate.The current national average is 5.4% and 150% of this is 8.1%. The Project”s location has an unemployment rate of 23.26% and therefore qualifies as a TEA, subject to the decreased investment amount of $800,000 (the “Capital Contribution”) and investors get access to the visas set aside for this category (10% of the total EB-5 visas).
Given the severity of the drug epidemic in the United States and the critical nature of substance abuse programs and treatment facilities, the project may qualifiy as a national interest investment. Investors may request expedited approval on their I-526 request.
Ohio has the fifth largest opioid overdose death rate in the United States ("U.S."). West Virginia, which boarders the location of East Ohio Hospital, has the highest rate in the U.S. (source: CDC Reports dated 2021). The county in which the Project is located, Belmont County, has 23.4% more opioid deaths than the U.S. average. Currently, only about 47% of adults with mental illness in West Virginia and Ohio receive any form of treatment due to lack of access (source: Substance Abuse and Mental Health Services Administration) and these areas are designated as "Medically Underserved Areas" (source: Health Resources & Services Administration dated 2022).
The hospital has received a $10 million loan from the Ohio Development Services Agency which carries an interest rate of 0% per annum for three years and at the rate of 3% per annum for years four through 20.
The hospital is owned by Dr. Johnson who is a board-certified psychiatrist. Over the past 35 years Dr. Johnson has started, acquired, and grown a variety of healthcare organizations that he continues to own and operate including one of Ohio's largest independent behavioral health centers, Access Ohio. Other team members also have experience in health care operations, nursing leadership, and healthcare administration.
The EB-5 offering is sponsored by Steven Smith of Smith Central Regional Center whose prior EB-5 projects include a hotel, apartment building complex, and a restaurant chain.
The econometric study estimated that 1,278 jobs will be created from the Project, resulting in an excess of 878 jobs or approximately a 320% job cushion. All jobs have already been created.
The Project has been funded with bridge financing from Dr. Johnson, who has invested roughly $25 million to the project, including $9 million in equity and a bridge loan of $17.9 million.