A two-member majority of the Property Tax Assessment Board of Appeals (PTABOA)
voted to increase the 2012 assessment for Porter Regional Hospital in
Liberty Twp. from the original value of $34.1 million to $117 million.
PTABOA president Joe Wszolek and member Vicki Urbanik issued the new value
after continuing the case from their Nov. 26 meeting (the board’s other
member Nicholas Sommer has recused himself from matters dealing with the
hospital) which included a request by the hospital to withdraw the appeal
but the action was unsuccessful as petitioners must give eight days notice
prior to a hearing.
The appeal was challenged by Porter County Assessor Jon Snyder who argued
that the value should be higher based on a few pieces of evidence.
While a stock of media reports quoted hospital officials saying the new
hospital was close to $210 million, Snyder submitted as evidence copies of
forms signed by Porter CEO Jonathan Nalli in 2011 and 2012 for the abatement
that said the construction value for the hospital was $130 million.
A tax representative for the hospital, Donald Feicht, Jr., vice-president of
taxation for Uzelac & Associates, had said at that Nov. 26 meeting that the
hospital fits under the state’s model as an office building and argued the
assessor should assess it as such.
Feicht, who was not present for the proceedings Monday nor was any other
representative for the hospital, said that “cost is not the same thing as
value” and that Snyder did not get permission from the state to deviate from
On Monday, Wszolek said he came across rulings in a recent appeal case by an
administrative law judge of the Indiana Tax Board of Review Ellen Yuhan that
made the point that establishing a figure using the state’s assessing
guidelines is “merely the starting point” and that the assessor can use
other methods to come up with the market value-in use for a property such as
looking at construction costs.
Urbanik said that the county assessor’s office used the cost-approach
assessing method which came up with the $34.1 million value but the Indiana
Assessor’s Manual states that assessing officials may also consider other
available data for the cost approach in determining the true tax value.
As Snyder felt the cost approach figure did not represent the true tax
value, Snyder, Wszolek and Urbanik looked at what would be considered the
market value-in use which is defined as the value for a property’s current
use reflected by the utility received by a similar user.
Urbanik said that market-value in use would be considered as the price that
a property would sell for with continuation of its current use.
Snyder had provided the PTABOA with comparable sales of medical buildings in
other parts of the country, but the board decided the most reliable data was
the value on the forms submitted for the hospital abatement.
“I find the CEO’s statement on the document the best to use,” she said.
Since the hospital was reported to be 90 percent complete, Urbanik made the
motion that the new 2012 assessment for the hospital be $117 million based
on the $130 million construction cost.
Urbanik however said she did sympathize with the hospital’s decision to
appeal since the hospital was right that the assessment value set by the
county assessor was incorrect.
The hospital argued that the value should have been lower. Wszolek said
appealing an assessment gives “an open door” to the possibility for an
assessment to be increased as tax specialists always often advise.
Assessments made by the PTABOA can be appealed to the Indiana Board of Tax
Snyder said this assessment value shouldn’t be confused with the hospital’s
2013 assessment which was established at $244 million with the assistance of
an appraiser. The hospital last month appealed the $242.8 assessment of the
hospital building to the county’s PTABOA, which will be heard at a later
Later on Monday, Wszolek and Urbanik also voted to set an assessment of $18
million on the former Porter Memorial Hospital Valparaiso campus, which is
an average of the hospital’s 2010 assessment of $14 million and the 2012
assessment of $22 million.