The Poplar Bluff City Council conducted a public hearing Monday night on tax abatements for the proposed Poplar Bluff Regional Medical Center to be built in the southwest quadrant of the Oak Grove Road and Shelby Road intersection, which is within an enhanced enterprise zone.
Through the efforts of the Greater Poplar Bluff Area Chamber of Commerce, along with city, county and school officials, a second enhanced enterprise zone was established in Poplar Bluff and approved by the state. Healthcare facilities that locate within the enhanced enterprise zone may receive a 100 percent property tax abatement for 15 years and a 50 percent abatement for the following 10 years. The abatement does not apply to taxes on the land (62 acres) or personal property. Potential retail businesses in the proposed Eight Points commercial development will not be eligible for tax abatements.
Health Management Associates of Naples, Fla., which owns PBRMC, plans to construct a $173 million, seven-story hospital with 250 private beds. Construction is expected to take three years.
By being in the enterprise zone, PBRMC would be eligible to pay no property taxes on its new structure for 15 years, but would pay $800,000 per year or $8 million over the final 10 years to all the taxing bodies. 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.
However, the hospital has agreed to pay 50 percent of its property taxes for the last 18 years of the enterprise zone. As a result, the taxing bodies will receive a total of $14.4 million or $6.4 million more than required under the enterprise zone agreement. PBRMC also has agreed to make payments in lieu of taxes during the first seven years.
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.
Seven persons testified during the public hearing. Four cited the economic benefits and infrastructure improvements that will result from the hospital locating in the enhanced enterprise zone, while three others supported a site on Highway PP because it is not in the enterprise zone and more funds would be available to the school district.
Greg Carda, PBRMC chief executive officer; Ryan Kiser, a partner in the K2 Commercial Group that is developing Eight Points; Steve Halter, Greater Poplar Bluff Area Chamber of Commerce president; and Tom Lawson, chairman of the Highway 67 Corporation, supported the tax abatements while John West, Jim Vernon and Patty Boyers expressed concerns about the school district losing revenue.
"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," said Carda, who explained the hospital will pay approximately $23 million over 25 years by making payments in lieu of taxes for seven years and paying half of the taxes for 18 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.
Kiser commended city officials for passing the half cent sales tax to help fund the four laning of Highway 67, having a vision for city growth in the new comprehensive city plan and creating the enhanced enterprise zone.
"We (the developers) would not be here if the Highway 67 project had not happened," Kiser said.
In addition to the benefits cited by Carda, Kiser also mentioned 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. He also said the incentives offered to the hospital are no different than those offered by other communities to attract healthcare facilities.
Halter explained how the enhanced enterprise zone was formed in the fall of 2010 when the hospital first considered the Eight Points site. HMA did not announce a change to the Highway PP site until in February.
The benefits of the enterprise zone at the Poplar Bluff Industrial Park were cited by Halter.
"Briggs & Stratton now has almost 1,400 employees. The plant has a big impact on the community with its $40 million annual payroll," Halter said.
Lawson also cited the benefits Poplar Bluff residents are receiving from having approved a half cent sales tax in April 2005 for the four laning of 50 miles of U.S. 67 north of Poplar Bluff.
"We would not be talking about Eight Points if the Highway 67 campaign had not been successful," Lawson said.
He cited the improved safety as seen in the reduction of traffic fatalities and the future economic development of Poplar Bluff.
"The hospital is going to be the keystone of the Eight Points project," Lawson said.
West, a former Poplar Bluff mayor, said he would like to see the new hospital on PP Highway "for the sake of the school tax for kids."
"The tax abatement will deprive the school district of a good sum of money," Vernon said.
Boyers and her husband, Steve, own one of three tracts the hospital had planned to purchase at the Highway PP site before returning to Eight Points. She said she had "fundamental problems" with the way the enterprise zone was established and she wants to see the agreements the city has made with K2 and the hospital.
According to Boyers, the school district would receive $1.2 million annually if the hospital stayed at the Highway PP site.
Chris Hon, superintendent of Poplar Bluff Schools, could not be present Monday night, but had previously 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 contends "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 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.