Economic Impact Study on Proposed Germantown Hospital:
State and Local Jobs, Revenue and Nurses

Sage Policy Group Analysis Finds Big Economic Impact for Montgomery County and Maryland

The construction and operation of a Holy Cross Hospital on the Germantown Campus of Montgomery College would help to create nearly 6,000 jobs in Maryland and provide a major boost to local business sales and county and state tax revenues, according to a study released on May 17, 2010, by economist Anirban Basu of the Sage Policy Group.

"It is difficult to imagine that another similarly-sized hospital could produce this level of potential economic impact," said Basu, chairman and CEO of Sage Policy Group. "The proposed Holy Cross Hospital - Germantown could ultimately unleash the creation of more than 5,700 jobs in Maryland, the majority of which would be in Montgomery County."

The results of the study were presented on May 17, 2010, on the college's Germantown campus to local and state officials, college administrators, and business and health care leaders. Holy Cross had commissioned Sage Policy Group - a Baltimore-based firm that performs economic studies across the mid-Atlantic region - to analyze the employment, economic and fiscal impacts of its new hospital proposal.

The Sage study found that:

• Construction of the hospital would create 1,109 construction-related jobs statewide, and support sales of $150 million worth of goods to Maryland business establishments.
• When in operation, the hospital will support 1,548 jobs statewide and spur local business sales of $216 million per year.
• The hospital will lead to a doubling of the number of nursing students graduating from Montgomery College's program by 2012, substantially increasing the lifetime earning power for each graduate, with sales of $250 million per year.
• As the new hospital expands, it is projected to support more than 3,300 jobs statewide within 10 to 15 years.
• The new hospital will jumpstart Montgomery College's Science & Technology Park, which has the potential to create 2,360 jobs (in addition to the 3,362 long-term jobs created by the hospital).
• The hospital will create new streams of revenue for both Montgomery County and Maryland, including an additional $2 million annually in county income taxes and $4.8 million annually in state income and sales taxes.

The new hospital - planned to be a 238,000-square foot, 93-bed facility - will serve Germantown, Gaithersburg and other upcounty communities, Maryland's largest concentrated population center not served by a hospital. Holy Cross has applied for a state Certificate of Need with the Maryland Health Care Commission to move
ahead with the process, and the Commission is expected to make a decision by late summer or fall.

"We have the commitment of the money to finance this project," said Kevin J. Sexton, president and CEO of Holy Cross Hospital. "As soon as we secure state approval, we are ready to move ahead with bringing health care to this under-served area of Montgomery County and generating jobs and economic activity at a time when they are really needed."

The unique hospital-college partnership will provide annual financial and other support from Holy Cross Hospital to enable Montgomery College to expand its nursing program, doubling the number of annual graduates. The project will also bring revenues to the school, which will facilitate development of the science and technology center.

"We think the addition of Holy Cross Hospital to our Germantown campus offers a remarkable opportunity for our current and future students, faculty and staff," said Dr. Hercules Pinkney, interim president of Montgomery College. "We look forward to being able to double the number of students who successfully complete our nursing program and be a catalyst for more jobs in upcounty and throughout the region and state."

Dr. Michael C. Lin, Ph.D., chairman of Montgomery College's Board of Trustees, said Montgomery College expects the project - the first hospital to be located on the campus of a community college - will expand the pool of highly qualified nurses and medical personnel for hospitals around the county and the state.

"We have carefully examined this proposal, and we believe it will significantly improve the education we can offer our students," Dr. Lin said.

The new hospital is also slated to be the anchor of the Montgomery College Science and Technology Park in Germantown, which will add as much as one million square feet of office, lab and medical space to the campus and boost technology-based business development in Montgomery County.

"The Montgomery College Foundation is excited to realize the potential promised by a public-private partnership in the growing life sciences industry," said Douglas M. Firstenberg, chairman of the Montgomery College Foundation Board of Directors. "Having Holy Cross come in as both the anchor tenant and programmatic partner is essential to our ability to help Montgomery College students take advantage of this
growth."

With nonresidential construction activity in Montgomery County near an all-time low, Basu said that the Holy Cross project could come at a particularly important time for the county's economic recovery.

"Given the significant decline in the construction market, this project could serve as an important economic stimulus for both Montgomery County and the state as a whole," Basu said.