Chesterton Tribune

 

 

PTABOA hears hospital challenge to $242.8 million assessment

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By JEFF SCHULTZ

The Porter County Property Tax Assessment Board of Appeals Tuesday heard Porter hospital’s appeal of its $242.8 million assessment.

Hospital officials have appealed the County Assessor’s $242.8 million March 1, 2013 assessment on the 430,000 sq. ft. Porter Regional Hospital at 85 E. U.S. Highway 6, Liberty Twp.

The appeal filed in November contends that the hospital should be assessed at $39 million including the $1.7 million in assessed value for the land according to state guidelines.

The higher figure set by the County Assessor is based on work by an outside appraiser.

Tax representative for the hospital, Donald Feicht of Uzelac & Associates of Valparaiso, said the appeal was made because Assessor Jon Snyder did not use the state’s assessment model contained in the most recent real property assessment manual.

“We don’t know what (Snyder’s) methodology was,” said Feicht.

Snyder has called the hospital “a unique property” and contends that the Indiana Department of Government Finance gives county assessors the choice of appraisal methods in order to come up with a “fair and equitable assessment.”

Feicht said both the 2002 and 2012 real property assessment manuals mention that full line hospitals are to be assessed as general office. However, data for cost models related to actual construction costs for hospitals was not included in the tables for office buildings, Feicht said.

In other materials given as evidence to PTABOA President Joe Wszolek and Vice-president Vicki Urbanik, Feicht included a copy of a letter he received from DLGF Assessment Division Director Barry Wood who said he was unsure as to why specific cost models for hospitals were not included in the DLGF’s manual and suggested that medical office cost models could be a closer assessment model for hospitals.

Finally, Feicht said the assessment manual indicates that true tax value does not mean the same as fair market value and that an assessment under the guidelines is to be the correct and true tax value.

Feicht contested that’s Snyder’s appraisal was “unauthorized and beyond the scope he is to do with the assessment guidelines.”

Snyder said the appraisal done by Jack Poteet of the Kansas-based Hospital Appraisal Services used three standard approaches recommended by the DLGF to get the market in-use value Ð the cost approach, the sales-comparison approach and the income approach. All three arrived within 1 percent of the same value of each other, Snyder said.

The manual on the three standard approaches also mentions that standard appraisal and valuation published by the Appraisal Institute and the International Association of Assessing Officers are acceptable for determining the market value-in-use, Snyder said.

To complete the appraisal, Snyder had filed a petition for a writ of production of books and records with the Porter County Circuit Court and told the PTABOA the copy of the appraisal given to them contained confidential information.

Snyder said accepting the $39 million assessment over the $244.5 million value offered by Poteet would be “an injustice” suffered by the taxpayers since the county’s overall tax value continues to drop.

Feicht said he has looked at the property record cards of roughly 20 hospitals in Indiana and Snyder is the only assessor in Indiana who deviated from the state manual in configuring a value.

“On the other side of the coin, maybe (Snyder) is doing it the right way,” Wszolek told Feicht.

Urbanik asked Feicht if it was Snyder’s methodology or his assessment he was specifically contesting. Feicht replied the appeal is the result of Snyder not following the state’s guidelines.

Porter had appealed tax values on 11 properties for 2013 but decided to withdraw all but the U.S. 6 property.

In November, Porter attempted to withdraw its 2012 assessment for Porter Regional Hospital but was not able to do so given the timing before the PTABOA board got to review it.

There it said that the Assessor’s Office was correct in assessing the amount at $34 million because it was using the state’s manual guidelines. At the March 1, 2012 assessment date, the hospital was said to be 90 percent complete.

PTABOA members Wszolek and Urbanik assigned a new 2012 assessment at $117 million which they believed to be the market-in-use values based on the construction costs reported on the hospital’s tax abatement the County had on file. Porter’s CEO at the time Jonathan Nalli signed the abatement form indicating the cost to construct the new hospital was $130 million.

Porter ended up appealing the PTABOA’s new assessment this past month to the Indiana Board of Tax Review which will hear the case in Porter County.

Snyder said the true value of the hospital is expected to be discussed at the Porter County Council meeting this Thursday when the Council questions hospital officials as to when the 10-year tax abatement is supposed to begin.

Wszolek said the PTABOA board has 120 days maximum to make its decision on the hospital’s 2013 appeal.

 

Posted 2/26/2014