West Chester Hospital to receive $6 million tax break
It will continue making annual $552K payment to TIF district through ’32.
The Butler County commissioners recently agreed to give West Chester Hospital an annual $552,631 tax break as part of a verbal agreement forged when they settled a dispute over tax exempt status several years ago.
The hospital, which is owned by UC Health was scheduled to continue making the annual $552,631 payment in lieu of taxes to the University Pointe tax increment financing district through 2032. The total savings will be $6 million. The hospital has already paid $4.4 million into the TIF that has funded infrastructure in the area like the Liberty Way Interchange.
Commissioner Don Dixon said they made a promise when they settled the dispute with the hospital in 2014.
“We made a commitment to them, they were the only hospital out there that was paying into the TIF,” Dixon said. “They didn’t execute their tax exempt status and they didn’t go to court to force that either. I said look if you’re the only ones left out here and nobody else is going to pay their way we will make the playing field level.”
TIF districts are an economic development tool that many local governments use to encourage new investment in an area. A district typically surrounds a parcel or group of parcels and enables the taxpayers within it to make payments into a special
fund in an amount equal to their property tax liability for the life of the TIF. These payments in lieu of taxes are used by the local governments to retire debt incurred for the infrastructure improvements.
The county, Lakota Schools and the hospital battled over tax exempt status for years and after the state tax commissioner agreed the hospital was exempt, the county could have owed the hospital $3 million. The settlement solved the issue.
County Administrator Judi Boyko said after the settlement the hospital continued to make payments but at a reduced level. She said since other medical facilities in the area aren’t under the same tax obligation “it was putting them at a competitive disadvantage in the market” hence this tax break.
Commissioner T.C. Rogers said the tax break is justified.
“UC Hospital has been a community partner to the region and they were competing with other hospitals which didn’t have any obligation,” Rogers said. “So because of the amount of money they had already paid, we thought that was fair where they didn’t have to pay anymore.”
Lakota will not lose any money on this deal and the tax break will be contingent annually on whether the TIF can cover debt repayment without the hospital’s contribution.
“UC still has to make their payment but should all of the debt have been paid they can be reimbursed for that payment,” Boyko said. “It will be reviewed each year, they make their payment and if all the debt has been paid and covered then we can reimburse them.”
When asked about the tax break, Tom Daskalakis, vice president and chief administrative officer of West Chester Hospital, said “UC Health appreciates its strong working relationship with Butler County including the many ways in which both entities work together to support our respective missions.”
Assuming the refunds come to fruition, UC officials said the money will be used for “an investment in our staff and also used as a means to address supply and labor cost increases.”
The commissioners extended the life of the University Pointe TIF out to tax year 2061 a couple years ago, but officials have said they might pare back the extension. Since its inception it has funded about $110 million in public improvements that has spurred about $1 billion in property value, according to Boyko.
She said about $60 million in roadway improvements is anticipated due to future growth in the Liberty Way interchange area. Part of that is going on now with the modification of the tricky interchange at Interstate 75. Since the bill for the Liberty Way and Ohio 129 interchange “fix” and other improvements associated with it is so hefty at around $32.5 million — about $11.6 million is federally funded — the commissioners agreed to loan the TIF $8 million from the general fund, rather than borrow money.
“Obviously anytime you can pay cash and not borrow that’s good,” Dixon said. “The TIF generates enough money so it can adequately provide the funds. If you spread that out it’s not such a big number. But we’re doing all that work out there, so it requires a lot of cash at one time. So rather than go borrow that and pay interest on it we had the funds available so we just did it. We’ll get that back eventually.”
The commissioners budgeted $10 million for the loan that will be repaid to the general fund but Boyko said given present circumstances “we think we can manage with $8 million.”