The Township Board approved the Health Pointe development on Monday. The medical center is a joint venture between Spectrum Health and Holland Hospital.
“By approving this development, a prime property for commercial development, the township will lose all sales tax revenues which helps support the taxpayers and the community,” township resident Bob Brown said. “A check of the tax records shows that Meijer and Walmart pay property taxes of approximately $200,000 a year to the community for property appraised at considerably less than the $10 million used as the basis for the Health Pointe project.”
The P.I.L.O.T. agreement would provide the township an amount substantially equal to the township’s millage rate (about 4.32 mills) on a $10 million taxable value. This equates to a $43,200 annual payment to the township, which is to be adjusted annually for inflation.
“As a taxpayer, I have seen my tax bill increase substantially more than inflation in every year for the last three years,” Brown said. “If this is such a great deal for the residents of the township, the board should extend this thinking and not increase expenses and salaries more than inflation. ... You would think that a corporation such as Spectrum, which says they are interested in helping the community, would have put the community first in all their presentations and not be forced to pay a pittance in taxes.”
While there is concern about the agreement, Township Manager Bill Cargo said it would only go into effect if the development is granted a property tax exemption.
“The earliest that Health Pointe could seek a property tax exemption from the Michigan Tax Tribunal would be 2018,” he said. “I would also note that the P.I.L.O.T. agreement contains a clause wherein Health Pointe waives its right to challenge the P.I.L.O.T. at some future date.”
Cargo also noted that the agreement with Health Pointe is believed to be the first and only example in Michigan in which a P.I.L.O.T. agreement has been used because of a possible tax exemption being granted by the state tax tribunal.
Revenue from a P.I.L.O.T. deal, Cargo explained, is only meant to cover any township revenue loss should a property tax exemption be granted.
“Specifically, the P.I.L.O.T. monies will cover services that the Health Pointe facility would directly receive from the township,” he said.
These services include police and fire, Harbor Transit, and ordinance enforcement.
“The P.I.L.O.T. agreement is not meant to cover services that do not directly benefit the Health Pointe facility,” Cargo said, referencing items such as the local museum, schools and county parks.
How the agreement was reached
According to Cargo, the $10 million taxable value estimate for Health Pointe was based on the taxable value per-square-foot average of three area medical facilities: North Ottawa’s lakeshore health care facility (53,682 square feet, $2.86 million taxable value), the Holland Spectrum medical facility (58,710 square feet, $3.73 million taxable value), and the Grand Rapids Township Spectrum integrated care campus (95,205 square feet, $6.17 million taxable value).
With an average taxable value of $61.47 per square foot, officials figured the taxable value estimate for a 120,000-square-foot facility would be $7.38 million.
“I had (township attorney Ron) Bultje begin the negotiations at a $10 million taxable value number — expecting that there would be some compromise and we would end at a number closer to $8 million,” Cargo said. “However, Health Pointe agreed to this initial taxable value number without complaint.”