VALPARAISO | Porter hospital still would pay more than half of the tax bill on its new facility over 10 years if the County Council approves the request for a tax abatement.
The hospital would pay $16.7 million in property taxes if granted the decade-long abatement, as compared to $29.1 million if the break is denied, said hospital attorney James Crawford.
The $12.4 million difference has triggered a debate on the merits of the abatement as the council prepares to host a public hearing at 5 p.m. Sept. 10. Abatements, which are intended to attract employer investment, start out exempting most of a business' tax liability and ramp down over time.
The council unanimously granted preliminary approval to the request this week, but opponents are asking why the county should do without the revenue when the hospital is bound by its purchase agreement to build the new hospital. Community Health Systems agreed to build the hospital within four years of purchasing the facility from the county in May 2007.
The abatement is sought on the $130 million value of the minimum 225-room hospital proposed for the northwest corner of Ind. 49 and U.S. 6, Crawford said. The company also wants a personal property tax abatement on half of the $40 million in eligible equipment that will be installed in the new hospital, he said.
Just how much the hospital is paying in taxes on its current facility in Valparaiso is not known because the first bill to Community Health Systems is not set to go out until later this year, according to county officials. The county had owned the hospital for nearly 70 years before that, during which time no taxes were paid.
Crawford pointed out that other Porter County health care facilities that are owned by nonprofit entities pay no taxes.
No matter what happens with the abatement request, Community Health Systems will continue to pay $1.3 million in taxes each year on its Portage hospital and other facilities around the county, he said.
Hospital officials have further pointed out the county is currently collecting about $2,000 in annual taxes on the 104-acre construction site in question.
Porter CEO Jonathan Nalli said this week the hospital is holding off on buying the land until the abatement request is decided.
He would not say if a denial would impact those plans.
If the abatement is granted, it will be reviewed each year to determine if the hospital has followed through on its promised benefits, Crawford said. Those promises include boosting the number of full-time jobs from 1,500 to 1,626 within two years of opening the new hospital.
The abatement would start upon the completion of the hospital project, which is currently slated for May 2011, Crawford said. That means the savings would show up on the following year's tax bill.
