Tuesday, November 3, 2009

Another Tax Controversy Brewing in Urbana, IL?

Most of the readers of this blog know about the pending property tax litigation involving Provena-Covenant hospital in Urbana, IL (see prior blog post here and the previous blog coverage cited).  Now Urbana has a potential new tax controversy on its hands.  Carle Foundation, the tax-exempt entity that owns Carle Hospital in Urbana, recently announced plans to acquire the for-profit Carle Clinic (which employs doctors). Carle Foundation actually already owns most of the property occupied by the clinic, but since the property is leased to a for-profit entity, under Illinois law the property is taxable because it is not used exclusively for charitable purposes.  But if Carle Foundation acquires the lessor (the Clinic) and merges it with the exempt Carle Hospital, the acquisition could take property that currently produces millions in property taxes for Urbana off the tax rolls.  A story in the Champaign-Urbana News Gazette Sunday details the situation, including Carle's promises to continue to make payments in lieu of taxes (PILOTs) to Urbana, although the story is careful to note that Carle Foundation hasn't promised how long it would make those payments, and the Foundation seems to be tying their willingness to make PILOTs at least in part to the outcome of the Provena litigation.  This is going to be a major issue for the City of Urbana; stay tuned, folks.



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