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Tax abatement for hospital on the line in Porter County

Updated: July 8, 2014 6:09AM



VALPARAISO — Cheryl Harmon, chief financial officer for Porter Regional Hospital, requested Thursday that the Porter County Council find her facility in compliance with a 10-year tax abatement.

“I just wanted to put forth formally that we have met the conditions. We have been a good corporate citizen,” she said, as she laid out figures on jobs, payroll and other investments, including construction costs of more than $130 million.

The consensus during the meeting was that the hospital hadn’t met those terms and the council, though commending the hospital for its investment in the community, moved forward unanimously to hold a hearing on June 24 on whether the hospital is in compliance with the abatement.

The terms called for a building with an assessed valuation of $130 million, not construction costs of $130 million, said Council President Dan Whitten, D-At-large, who was on the council when the abatement was granted in 2009.

“What won me over was the hospital said they were going to build a building worth $130 million, and they showed what taxpayers would receive for $130 million in assessed valuation,” he said. “It was clearly a good investment for the taxpayers.”

For the hospital to now say the $130 million was construction costs, and not assessed valuation, is to have negotiated in bad faith, he added. “I don’t feel they are in compliance until the building is assessed at $130 million. Otherwise, taxpayers have been duped.”

Councilwoman Sylvia Graham, D-At-large, also on the council when it granted the abatement, agreed. “We’re playing numbers now. I can’t believe you’re now saying it’s not worth $130 million.”

The hospital’s commitment was to construct a building that cost $130 million, Harmon said, adding an assessed valuation of $130 million “would make that a very expensive building,” and there was no way a 225-bed hospital would be that expensive.

The hospital’s assessed valuation is under appeal for 2012, the year it opened, and 2013. While county Assessor Jon Snyder has said the value of the hospital in 2013, the first full year it was open, was $244.5 million, hospital officials claim it is worth $39 million, well below the terms of the tax abatement as laid out by the council.

Hospital officials are working with Snyder and council attorney Scott McClure to resolve the matter, but that was not before the council, McClure said, adding the subject at hand was whether the hospital met the terms of the abatement.

“They have the burden,” Whitten said. “I don’t think they’ve met it.”



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