Tax abatement plan approved for new Poplar Bluff hospital site

POPLAR BLUFF, Mo. -- A resolution granting tax abatements for a new Poplar Bluff Regional Medical Center on a 62-acre site along Oak Grove Road was approved Monday night by the Poplar Bluff City Council.

Health Management Associates of Naples, Fla., which owns the medical center, plans to construct a $173 million, seven-story hospital with 250 private beds. Construction is expected to take three years.

The Oak Grove site is within the Poplar Bluff 2 Enhanced Enterprise Zone, which was approved by the Missouri Department of Economic Development. Healthcare facilities locating within the zone are eligible for a 100 percent property tax abatement on new construction for 15 years and a 50 percent abatement for the following 10 years.

However, the medical center has agreed to make payments totaling $10,400,000 in lieu of taxes over the first seven years and then pay 50 percent of the taxes over the next 18 years.

According to a redevelopment agreement between the city, the medical center and the K2 Group, which is developing the Eight Points commercial area, the city will use the payments in lieu of taxes to purchase right of way from K2 for the expansion of Oak Grove Road to a five-lane street. Council members approved the agreement during a special meeting July 7.

By granting the abatement, the city desires to incentivize the construction of the hospital project with the enhanced enterprise zone in order to create jobs and foster the development of health care and social assistance industries within the zone, according to the resolution. The city conducted a public hearing on the abatement on Aug. 1.

The abatement does not apply to taxes on the land or personal property. Potential retail businesses in the proposed Eight Points commercial development will not be eligible for tax abatements.

After 25 years, the hospital will pay the full 100 percent of its tax bill -- estimated at $1.6 million per year. The hospital currently pays $559,000 in property taxes annually.

With the hospital agreeing to pay 50 percent of its property taxes for the last 18 years of the enterprise zone, the taxing bodies will receive a total of $14.4 million or $6.4 million more than required under the enterprise zone agreement.

The Poplar Bluff School District will benefit the most from the new tax dollars. It will receive $9 million in property taxes over 18 years instead of $5 million over the last 10 years of the enterprise zone.

"Poplar Bluff Regional Medical Center takes seriously our responsibility to be a good corporate citizen and to create broader economic development opportunities for the region," medical center chief executive officer Greg Carda said at a previous council meeting. He said the hospital will pay about $23 million in property taxes over 25 years.

"Even with the abatement, the collective Eight Points development district is more than a $400 million project that will generate more tax revenue for our schools and community than the previous location on PP Highway," Carda said. "In addition, it will spur an even greater long-term impact on the broader economy, including the creation of more than 1,400 jobs."

Carda also cited how Eight Points will make possible $20 million in transportation improvements, which will create safer access to the 5th & 6th Grade Center and to Oak Grove Elementary School.

The school district will receive $1.5 million from the sale of excess dirt on its property, which will be used at the new hospital site.

Earlier, Chris Hon, superintendent of Poplar Bluff schools, said he was looking at the long-term benefits for the schools, which will be realized if the hospital is part of Eight Points.

While the district will have less of an increase in property tax revenue from the hospital initially, Hon contended "quicker commercial growth will increase the amount of property taxes the district will receive."

"Our district will benefit from the widening of Oak Grove Road, site improvements at the 5th & 6th Grade Center and increased safety for our students," Hon said in an earlier interview.

In addition to widening Oak Grove Road to five lanes, the infrastructure improvements include a new interchange at Bypass 67 and Oak Grove Road and improvements to the intersection of North Westwood Boulevard and Oak Grove Road.

City Manager Doug Bagby reported the Missouri Health Facilities Review Committee decided Monday morning to wait until Sept. 12 to have a hearing in Jefferson City, Mo., on PBRMC's request to relocate the hospital to the Oak Grove site. The committee had previously approved a certificate of need for the Route PP site.

"Letters were sent to the committee by six Poplar Bluff school board members expressing their concerns about the tax abatement," Bagby said. The abatement issue will be discussed at the school board meeting Thursday night.

"HMA is still committed to the Eight Points site," Bagby said after talking with hospital officials Monday.

Councilman Loyd Matthews emphasized the community needs to support the hospital locating at the Oak Grove site just like they supported the half-cent sales tax for the four-laning of U.S. 67.

Matthews thinks people opposed to the tax abatement are being "penny wise and pound-foolish." He expects the new hospital and new retailers will greatly increase tax revenue for all the taxing bodies.

Councilwoman Susan McVey expressed concern about the loss of jobs if a new hospital and Eight Points are not built.

Pertinent address:

Oak Grove Road, Poplar Bluff, MO