Three Texas medical centers are the latest investor-owned hospitals to seek property tax relief.
Conroe (Texas) Regional Medical Center, a 244-bed facility owned by HCA-The Healthcare Co., is deciding whether to appeal a recent denial of its request for a lower property tax bill, hospital officials said last week. Meanwhile, two Houston hospitals owned by Santa Barbara, Calif.-based Tenet Healthcare Corp. await trials on their property assessment appeals.
In recent years, HCA and Tenet have adopted a strategy of fighting for lower property taxes. In some cases, the companies have argued that Medicare cutbacks and lower inpatient utilization have eroded the value of their properties (Feb. 14, 2000, p. 16).
Conroe Regional presented evidence in a state court trial late last year that its acute-care real estate is worth about $35 million rather than its assessed value of $49 million, said Robert Mott, a Houston attorney representing the Montgomery County (Texas) Central Appraisal District, which sets valuations. The amount of the hospital's annual tax bill was not available late last week.
Judge Fred Edwards of the 9th District Court of Texas in Conroe notified the appraisal authority in February that he would deny the hospital's request for a revised valuation, officials of the appraisal district said. A formal judgment is expected to be entered in the next few weeks. The judgment pertains to tax years 1997, 1998 and 1999; a separate suit involving 2000 taxes is pending.
The district's expert witness, Bruce Krider, a senior partner at American Health Care Appraisal in San Marcos, Calif., said the hospital's profitability undermined its case that it suffered from an inefficient layout and a surplus of beds. "This is a very well-run hospital," Krider said. "Where (HCA) might have success (arguing for lower assessments) in other places, this is clearly not one of them," he said.
Conroe Regional spokeswoman Karen Stewart said hospital officials couldn't comment last week because the case was still pending.
Tenet's 140-bed Cypress Fairbanks Medical Center and 386-bed Houston Northwest Medical Center are expected to go to court as early as this spring to argue for lower assessments for the 1999 and 2000 tax cycles.
Cypress Fairbanks was assessed at $22.3 million last year, while Houston Northwest was valued at $36.8 million, said Donald Landry, director of review appraisals for the Harris County (Texas) Appraisal District.The hospitals' respective tax bills for 2000 were approximately $780,000 and $1.03 million.