The nonprofit Spectrum Health facility applied for the exemption in January, seeking a 95 percent reimbursement totaling about $1.3 million dating back to 2016.
The township denied the exemption while investigating whether Health Pointe’s lease arrangements merited the refund.
The township’s Board of Review recently determined the exemption must be granted, but the Township Board will decide whether to accept the ruling or pursue legal action.
Township officials say they are concerned that nonprofits can receive large tax exemptions without providing a comparable level of charity. Health Pointe reported it provided $35,000 in “charitable services” in 2018. Under Michigan law, any level of charity makes a nonprofit eligible for a tax exemption.
In a closed session Monday, the Township Board will determine whether to appeal the Board of Review decision, estimate the legal costs of furthering the issue in the court system — up through the Michigan Supreme Court — and consider alternatives, such as joining other appeals processes.
Cargo said other communities in Michigan are appealing similar decisions. Case law has shown Michigan courts consistently siding with nonprofits when challenged by local taxing authorities, Cargo said. Township officials want to elevate this concern to the state Legislature, where Cargo said the solution lies.
Officials estimate the personal property revenue loss from the Health Pointe tax exemption for Ottawa County in 2019 would approach $729,000, based on current millage rates.
Township Assistant Assessor Ashley Larrison said Health Pointe’s charitable services include accepting Medicaid and Medicare health insurance and not limiting the number of patients the facility accepts. Health Pointe also provided free services to uninsured individuals in 2018, she said.
Township Supervisor Mark Reenders was not on the Township Board when the Health Pointe facility was approved. But, as a township resident, he said he was “very vocal” in his opposition to the development at the time.
The township receives a payment in lieu of taxes (P.I.L.O.T.) from Health Pointe, which amounts to about 75 percent of what it would receive in taxes. The county, state, schools and various services will be tasked with the reimbursement.
Cargo said Health Pointe’s services are needed in the community, but the facility has incurred a cost to the township’s emergency services. First responders made 80 paramedic runs to Health Pointe in 2018.
Health Pointe has told the township that its charitable services, such as Medicaid acceptance, will increase over time.
Cargo said a legal battle would likely be very expensive for the township.