Chesterton Tribune

 

 

Abatement resolution says hospital value must be at least $130 million

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By JEFF SCHULTZ

Porter County Council President Dan Whitten, D-at large, and Vice-president Karen Conover, R-3rd, are giving officials at Porter Regional Hospital a choice: either agree that the hospital building structure is worth at least $130 million in value or give up the property tax abatement.

The two, on behalf of the Council, sent a letter to Porter Chief Financial Officer Cheryl Harmon on Friday saying a new issue has arisen in the board’s exploration of how to apply the 10-year tax abatement that “could be the elephant in the room.”

Council Resolution 9-9-10, signed by the Council in 2009, specifically states one of the terms for the abatement is that the hospital is to build $130 million of improvements on its site at 85 E. U.S. 6 in Liberty Twp.

On its most recent assessment appeal, the hospital said it believes its tax value should be $39 million. Porter County Assessor Jon Snyder however has another opinion: $244.5 million.

“If the hospital is correct, in its valuation, then they are in substantial non-compliance with the real property tax abatement and we, as the Council, may need to consider revoking the real property tax abatement,” the letter said.

Whitten and Conover also gave this message: “We cannot have the taxpayers double-hit by having a tax abatement on a substantially non-compliant property.”

They conclude by saying they “look forward” to resolving each issue with the hospital in the quickest possible manner.

Harmon issued word to the press late Friday afternoon that she had not received the Council’s letter but does want to work with the County on an agreement.

Whitten told the Chesterton Tribune Friday he would like to find an arrangement that benefits both the hospital and the County, but overall “the needs of the taxpayers come first” in his opinion.

Conover said she wants the hospital to be successful but its officials need to comply with the terms spelled out in the resolution in order to receive the abatement.

“We can’t have it both ways,” she said. “If they want us to honor our commitment, they have to honor theirs.”

According to attorney Brian Hittinger, who is representing the hospital for the abatement, Porter has met and exceeded the other commitments it agreed to for the abatement.

The 9-9-10 resolution indicates that the hospital must hire 126 new full-time employees whose salaries would total an additional $7.5 million, along with purchasing at least $20 million in new informational technology equipment.

Hittinger said the hospital hired 213 new full-time employees in 2013 with a total of $15 million in yearly salaries and spent $24 million on IT equipment purchases. He also said the hospital hired more construction workers than the estimated 600 construction jobs that were agreed to.

Whitten said the other three issues he wants to clear up are the time frame as to when the abatement was to begin, what portions of the hospital property fall under the abatement, and what is the exact assessment of the hospital.

He said that Council Attorney Scott McClure is formulating a legal opinion on the issues.

In regards to when the abatement is to start, three scenarios have been considered Ð at the time the abatement was signed; in March 2012 when the hospital received its first assessment but was partially complete; or in March 2013 assessment after the hospital had opened its doors and was fully operational.

The Council has not scheduled a meeting to take up further discussion on the abatement. It has canceled its March meeting and is expected to meet for its next regular meeting in April.

A joint meeting with the County Commissioners is scheduled for this Wednesday at 5 p.m. to talk about investing the $159 million hospital sale principle into an endowment fund or explore other options that would give the County a higher interest rate.

 

Posted 3/10/2014