Riverview to make payments in lieu of taxes for Westfield facility

As part of an arrangement for Riverview Health to construct an outpatient facility on prime commercial property at the northeast corner of U.S. 31 and State Road 32 in Westfield, the hospital will make payments to the school district and city as a way to make up for its tax-exempt status.

Riverview spokeswoman Olivia Huser said the organization does not pay property taxes on land where the primary use is health care services, which includes its main hospital in Noblesville. That does not include the adjacent Noblesville Square shopping center where Riverview has offices for medical billing services. Riverview paid $108,816 in property taxes on the shopping center land in 2015, according to Hamilton County records.

Huser said the land in Westfield is expected to be tax-exempt, but the hospital has agreed to make payments in lieu of taxes on the property. Riverview and city of Westfield officials are still negotiating the amount of the payments.

“Riverview Health purchased the land previously owned by the Westfield Washington school system and there was interest on the school’s part to have ongoing financial support,” Riverview Chief Operating Officer Larry Christman said in a written statement. “As a good corporate citizen, Riverview Health agreed to support the school through payments in lieu of taxes.”

The school district and the city will both receive a portion of the payment from Riverview.

“That was part of the criteria of locating in a very highly desirable area,” Mayor Andy Cook said. “It’s a compromise between yes, we need a medical facility and they’re normally not taxed, but they also chose to be on a highly visible property.”

A 2010 survey conducted by the Indiana Advisory Commission on Intergovernmental Relations showed that more than 50 percent of local government officials in Indiana believe Payment In Lieu Of Taxes, or PILOT, agreements should be mandatory for hospitals.

Fishers and Noblesville have also started regulating where tax-exempt institutions such as not-for-profits and churches can locate and whether some form of payment needs to be made as a way to ensure the communities keep growing their commercial tax base.

In 2015, Riverview also paid about $300 in property taxes on the development site in Westfield, although the land is currently vacant. The hospital intends to construct a $34 million six-story patient care center on the 8.6-acre property south of Westfield Intermediate School and to the west of Shamrock Boulevard where the old football and track stadium is located. Riverview broke ground on the project Tuesday morning. It is expected to be completed by fall 2017.

The 105,000-square-foot building will include urgent care, primary and specialty physician services, an ambulatory surgical center, physical and occupational therapy, rehabilitation services, an outpatient pharmacy, and laboratory and imaging services. Riverview expects to add at least 80 jobs for the new facility.

Riverview Hospital, with 156 beds, is on about 15 acres of land along State Road 32/38 in Noblesville.

“To have a health care facility be the first anchor of this highly important interchange is just very special,” Cook said. “Its architecture is beautiful and it will really set the tone for this area.”

In addition to the patient care center, Cook said the city is expecting more development on the property.

In May 2014, Westfield Washington School sold the property to a group of local investors for $4 million. EdgeRock Development LLC, led by R. Birch Dalton and Randy Zentz, has been pursuing a project known as “The Junction”, which could eventually include restaurants, entertainment, offices, hotels and senior housing.

The potential $40 million “life wellness” development would also include the adjacent land to the east where the Westfield Washington School Administration building sits. The investors have had a $2 million option on the property for years. Plans show six multistory buildings on the land to the west of Shamrock Boulevard and another three on the east side of the intersection.

Westfield Washington School Superintendent Mark Keen said the school board approved moving the administration offices at its meeting Tuesday night, so staff will vacate the building within the next few months. Once the building is empty, the school district will finalize the sale of the approximately five-acre property.

“When the school administration decides to leave that building, which could happen soon, then that property also becomes available commercially,” Cook said.