The city will file litigation against Paris Regional Medical Center for taxes owed as a result of a 10-year, $27.2 million property tax abatement the city terminated in December 2018, according to action taken Monday by Paris City Council. After a closed door meeting, councilors voted unanimously to begin the litigation process.
The city canceled the 2013 abatement, which required the health care center to man acute care facilities at both its north and south campuses, after Paris Regional closed the south campus in June 2018.
At the time, the city claimed the health center would owe more than $1.1 million in taxes, penalties and interest on money not collected because of the abatement, which was in its sixth year.
Both Paris Regional and the City of Paris have declined comment since 2018, while Paris City Council has met several times in closed meetings without taking action.
“As we have said before, we disagree with the city’s opinion on the tax abatement agreement. We have no choice but to let the legal process play out,” said Steve Hyde, PRMC CEO.
Discussion about the tax abatement began in late August 2018 when the hospital approached the city about removing the south campus from the abatement, something Lamar County commissioners agreed to do. The city, however, proceeded with a default notice after declaring the abatement null and void.
Paris Regional CEO Steve Hyde spoke in a public forum at a Dec. 10, 2018, meeting before councilors voted 5-2 to terminate the abatement. He argued that Paris Regional should not be considered in default because the hospital had almost doubled the $27.2 million investment required in the abatement and had added more jobs than required. He said only $100,000 of the $27.2 million was spent at the south campus.
“The city has been aware for several years there was a consolidation of health care services to the north campus away from the south campus,” Hyde said then, according to The Paris News records. He asked the city to sit down with him “to address concerns and come to a place where we can amend the agreement without placing it in termination and default.”
A month earlier, the hospital filed litigation seeking an injunction against the city to stop termination and were in the process of amending its petition. The city had not yet been served at the time of the Dec. 10 meeting, according to City Attorney Stephanie Harris.
Councilors Paula Portugal and Renae Stone were the two “no” votes at the meeting with Mayor Steve Clifford, Clayton Pilgrim, Bill Trenado, Derrek Hughes and Linda Knox voting for termination.
Both Clifford and Knox expressed concern about the effect a large, vacated building in the middle of town would have on Paris while Hughes said the hospital should have approached the city prior to closing the south campus.
Portugal noted that the city has forgiven other industries for similar situations, and said she did not believe the hospital should be required to pay back taxes previously abated while they were in compliance. Stone recognized Paris Regional for becoming a Level 3 trauma center a month earlier, and said, “They are a big part of our community … and I would like for us to have further discussion on what to do.”
Portugal and Stone joined their colleagues in Monday’s unanimous vote to begin litigation.