For-profit hospital finds it can't beat City Hall--that is, the financing deal offered by the city.

American International Hospital in Zion, Ill., doesn't lack support from city hall. In an unusual transaction for an investor-owned hospital, the city recently sold $20 million in taxable debt for the purpose of lending the proceeds to the hospital to help finance a replacement facility. The deal saved the hospital, the area's largest employer, as much as 2.5 percentage points on the interest rate.