Hospitals seeks tax abatements for Concord medical offices
Concord Hospital and Dartmouth-Hitchcock Medical Center are among the commercial property owners seeking tax abatements from the city of Concord this year.
Although Concord Hospital is exempt from taxes as a charitable nonprofit organization, it does pay property taxes for medical office buildings on its Pleasant Street campus. The hospital has applied for tax abatements at its two medical office buildings, as well as a portion of the Payson Center for Cancer Care that is not exempt from property taxes.
“The reason we had filed is that of those properties, the increase in assessed value ranged from 17 percent to 32 percent in one year,” said Domenic Ciavarro, the hospital’s vice president of facilities. “And we just questioned that substantial of an increase in one year.”
Dartmouth-Hitchcock pays taxes on its two medical office buildings on Pleasant Street, and is seeking tax abatements for both properties.
The total assessed value of commercial and industrial properties in Concord increased 13.77 percent in fiscal year 2012 – the first increase since 2008, according to the city’s assessing office. Last Friday marked the city’s deadline to apply for tax abatements; the assessing office had 254 abatement applications yesterday and continued to process documents that had arrived in the mail.
The city typically receives between 225 and 275 tax abatement applications each year, according to Kathryn Temchack, the city’s director of real estate assessments. The majority of abatement applications this year have come from commercial property owners, many of whom have expressed frustration over their increased assessments.
The total value of the Pillsbury Medical Office Building on Concord Hospital’s campus increased from $14.9 million to $17.5 million in 2012, Ciavarro said. It is divided into condos owned by Capital Region Health Care, the umbrella organization that includes Concord Hospital.
The Memorial Medical Office Building increased 17 percent in assessed value, from $10.7 million in 2011 to $12.6 million in 2012, according to the city’s assessment records.
Concord Hospital also applied for a tax abatement on a portion of the Payson Center for Cancer Care that is rented to New Hampshire Oncology-Hematology. Ciavarro said the hospital pays taxes on that portion of the building because it is leased to a for-profit company. Its assessed value increased 32 percent from 2011 to 2012, according to assessment records.
Ciavarro said he believes this is the first time the hospital has applied for tax abatements with the city. Concord Hospital has received modest assessment increases in the past, he said, but the latest increase in the 2012 assessments came as a surprise. He said the hospital filed for an abatement by comparing the value of its building to similar offices.
“In what we filed with the city, we will initially be pursuing comparison to other similar properties,” Ciavarro said of the hospital’s abatement applications.
The Dartmouth-Hitchcock Concord building at 253 Pleasant St. increased in assessed value this year from $9.6 million to $11.1 million, according to the city’s tax database. Its medical office building at 279 Pleasant St. increased 14 percent in assessed value.
Dartmouth-Hitchcock spokesman Rick Adams said yesterday that the hospital looks forward to discussing its assessments with the city, but could not provide more details about the tax abatement applications.
Medical offices are assessed differently than other office buildings because they typically cost more to build and have higher rents, said Temchack.
“They’re much different kinds of buildings,” she said.
But, like other commercial properties, Temchack said the value of medical offices would have increased last year because capitalization rates have decreased and the economy has improved since the city last updated its assessment data.
Concord Hospital also leases space for medical offices in other buildings around the city.
“And unfortunately . . . we’re also feeling the brunt, if you will, at other locations where we’re major tenants,” Ciavarro said.
Ciavarro said the hospital pays higher rates of rent as assessed values increase because the hospital’s landlords pass on the cost.
Concord Hospital’s rented offices include the Medical Offices at Horseshoe Pond; Concord Hospital Medical Offices North, on Foundry Street off Interstate 93’s Exit 16; and Family Tree Health Care on Hall Street. Each of those properties increased in assessed value last year.