City tells PRMC they must repay taxes after defaulting on an abatement agreement

Photo: Amanda Cutshall / eExtra News

The city council has passed a motion to require PRMC to repay back taxes and to terminate the current abatement agreement.

According to the council, the hospital defaulted on the tax abatement agreement when they closed the south campus earlier this summer.

The agreement was made in 2012 and specified the hospital would keep both the north and south campuses open for the next 10 years. According to Steve Hyde, CEO of PRMC at the time of the closing, “There simply was not a feasible way to provide health care services in a meaningful and ongoing way at two different and older facility locations.” 

In September, the council gave the hospital 60 days to get back in compliance. According to Paris Mayor Steve Clifford, the council was able to decide whether or not they were going to do anything from allowing the hospital to default to requiring them to pay back taxes owed if the problem was not corrected.

“I feel we are not out of compliance because, out of the $27.2 million abatements, $27.1 million was committed to the north campus and only $100,000 was committed to the south campus,” said Hyde during the citizen’s forum. “Maybe we can amend the agreement without it being placed in default.”

Stephanie Harris, city attorney, said PRMC officials have not yet reopened the south campus, and are therefore out of compliance with the abatement.

“At this time, we have not been served with any sort of lawsuit, so we can vote tonight,” Harris said.

Paula Portugal said she doesn’t want the hospital to have to pay back taxes as the hospital employs and helps many people in the area.

“I just would not agree with making them pay back what they have already been abated,” she said. 

“This was the agreement,” said councilmember Billy Trenado. “They didn’t do what they were supposed to do and that is unethical.”

Derrick Hughes said during the abatement, both hospitals were supposed to be open.

“They didn’t come to the city first, before closing the south campus. They didn’t come to us first and that is a concern I have. I’m sure, though, we can come up with some type of agreement,” he said.

“Paperwork is paperwork and I hate it,” said councilmember Clayton Pilgrim. “We represent the citizens of Paris and we are public stewards of that money. We have to do what we say we are going to do. We have to enforce tax abatement rules and we have to do the right thing. Moving forward, I think we have to make better decisions when we make these abatements.”

Mayor Clifford said, “The intent was to not have a vacant building. That was a major part of the agreement. Now we have a vacant building and we have to deal with it. If we’re never going to enforce an abatement agreement, then we shouldn’t do them.”

“I concur,” said councilmember Linda Knox. “Not only did they close it, but they delicensed it, so it can’t benefit the area anymore.”

Mayor Clifford made a motion to terminate the agreement and seek back taxes. The motion passed.