July 26, 2014

Elyria
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CHP buys up land

Hospital, Elyria Schools in property tax battle involving 13 acres near Ireland Cancer Center

ELYRIA — Community Health Partners Regional Medical Center and the Elyria Schools are locked in a legal fight over how much some of the land the hospital has been quietly buying up near the Ireland Cancer Center is worth and how much the hospital should pay in taxes.
Since 2004, the hospital has spent nearly $5 million on more than 13 acres of land off Schaden Road and Keep Court that it plans to eventually turn into a campus-style medical center.
In one instance, the hospital purchased — through an agent — 3.95 acres in 2004 for $1,995,000, but the property was valued at half that by county Auditor Mark Stewart’s office, prompting Elyria schools to challenge the value and the property taxes it received.

Who is Robert P. Ellis Jr.?
CHP has done its best to keep the purchases below the radar, going so far as to have Avon attorney Robert P. Ellis Jr. buy the land as its trustee, resulting in the hospital’s name being hard to locate in county records as the actual property owner.
Ellis said the idea was to keep property owners from asking for unreasonable sums of money if they learned their land was being sought for a hospital project.
“Typically when you’re assembling, you don’t want people to know, because then they tend to ask for more,” he said.
Just this month, Ellis purchased a home for the hospital at the corner of Schaden Road and Keep Court for $240,000.
Only three pieces of property remain in the area — bordered by state Route 57 on the east, Interstate 90 on the south, Schaden Road on the north and Keep Court on the west — that the hospital might still want to purchase for the potential expansion, Ellis said.
But those properties, two of which are owned by Elbert Investments LLC, are not entirely necessary for the hospital’s plans.
“Right now, they have enough to do a project,” Ellis said. “If the prices are right, we might be interested in acquiring them.”

No firm plans for 25 acres
Exactly what CHP’s plans are for the now approximately 25 acres it owns — including the more than 11 acres on which the cancer center sits — and when something might be built there are still undecided, said hospital spokeswoman Jennifer Kennedy.
“We’re unsure of the services we’re going to provide,” she said.
But during a July 2006 county Board of Revision hearing on the fight over the value of the land, Karen Yacobucci, the hospital’s senior vice president of strategy services, said the site was ideal for a large-scale medical operation.
According to minutes of the hearing, Yacobucci said the location was desirable in part because 425,000 people would be able to reach it within 15 minutes.
Jack Kilroy, Stewart’s special projects coordinator and a Board of Revision member, said Yacobucci and other hospital officials spoke of the project as a centrally located facility that could serve Cuyahoga, Lorain, Medina and other counties.
“They said it was going to be huge for the region,” he said.
The hospital promised to provide a copy of its strategic plan for the site to the Board of Revision but never followed through on that promise, Kilroy said.
Elyria Mayor Bill Grace said he hasn’t heard anything about the hospital’s plans.
“They haven’t intimated to me they plan to do anything,” he said.

Previous plans, tough times
This isn’t the first time the idea of a medical facility being built on the site has come up. In February 2005, CHP announced that it planned to spend $30 million to build two new facilities, one in North Ridgeville and the other as an expansion to the cancer center, which had opened a few years before.
The cancer center expansion was supposed to include an 85,000-square-foot building that would have housed a women’s health center, MediSpa, diagnostic testing, physician services and a conference center.
Work was supposed to have begun on both projects that summer, but nothing was ever done.
“There were changes in leadership, changes in priorities and changes in economics,” Kennedy said.
Economic problems remain for the hospital, which in the past year has laid off staff and cut contributions to the charitable Lorain County Health and Dentistry and just this week announced it would scuttle its support for St. Joseph Community Center.
Kennedy said those are symptoms of the hospital refocusing its efforts on its core mission — providing hospital services to the growing number of poor and underinsured in the city of Lorain. Losses in the amount the hospital is reimbursed by government agencies for treating the uninsured have also dropped, $5 million alone last year, Kennedy said.
“We’re definitely feeling the pinch right now, but we are really working hard to streamline our services and being efficient,” she said. “But we are also looking to grow our services.”
That doesn’t mean, Kennedy added, that CHP has any plans to close its Kolbe Road facility in Lorain. Any expansion at the cancer center, she said, would be just that, an expansion.

Tax fight
When Ellis purchased for CHP the 3.5 acres from Sun Life Assurance in 2004 for $1,995,000 — more than twice what that company paid for it in 1997 — the county appraised the land for about $1 million.
That drew fire from Elyria schools, which relies largely on property taxes for its funding — the lower the value, the less taxes the schools would collect.
 The district’s attorney, Tim Armstrong, argued that the land was worth what the hospital paid for it when he appealed to the Board of Revisions.
“They had made a study and determined that was the premiere location in the county for this,” he said.
The hospital countered that it had no choice but to pay more for the land than it was really worth because it needed the property for its expansion project, but that didn’t mean the land was actually worth that much. An appraiser hired by the hospital put the value of the land at $1,060,000.
“The theory is it’s supposed to be fair market value,” Ellis said.
After the hearing, the Board of Revisions declared the land was actually worth $1.4 million.
“We split the difference,” Kilroy said.
The decision didn’t satisfy the schools, which appealed to the Ohio Board of Tax Appeals in Columbus. That board agreed with the schools, saying the land was worth nearly what the hospital paid for it.
Now the hospital is appealing that decision to the 9th District Court of Appeals, hoping to have the value reduced.
Contact Brad Dicken at 329-7147 or bdicken@chroniclet.com.