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Health & Hospitals

Nov. 29 – HCA’s Potential Property Tax Bill in Acquiring Memorial Health Inc. and its Millions in Buildings and Land

Category: Health & Hospitals

By Lou Phelps, Savannah Business Journal

November 29, 2017 – The sale of Memorial Health, Inc., the parent corporation that owns Savannah’s Memorial University Medical Center, continues to move toward a financial close, in a deal set to close before the end of year.

And the fact that all of the land and buildings owned by the mega hospital system would now be owned by a private, publicly-traded corporation, had people starting to calculate the property taxes that will be owed to Chatham County, the City of Savannah and the Savannah-Chatham Public School System.

Back in October, the proposed Asset Purchase Agreement was filed with the Georgia Attorney General’s office for for-profit Hospital Corporation of America (HCA) to acquire not-for-profit Memorial Health Inc.’s assets, a non-profit corporation with multiple sub corps underneath it – some that are for-profit entities.

The umbrella of all corporations of Memorial Health, Inc. includes more than 100 pieces of property, many with office buildings, doctors offices, and the hospital itself, on the books of the Chatham County Tax Assessors. Some of the property record cards list Memorial Health, Inc. as the owner.  Other list Provident Health Services, Inc., the entity on the Memorial campus where many of the physicians’ practices that Memorial Health has acquired over the years, are headquartered. 

But, the total umbrella corp owns buildings and land all over the city and county.  With the acquisition by HCA, there was the anticipation that all of that property, including the entire Memorial University Medical Center hospital, heart center and medical school campus, would come onto the tax rolls. Memorial also owns a numberof clinics, and other property in the region, that would not appear on the Chatham County tax rolls, but could be found on the Effingham, Bryan, Beaufort or Jasper county tax cards.

But, sources tell the Savannah Business Journal that County Commission Chairman Al Scott is pursuing a different strategy:  that all of the property tax will go into the promised indigent health care fund.

When the HCA deal was announced, and differences were drawn between this year’s buyer versus the prior proposed sale to Novant, it was stated that HCA would be funding an indigent care trust that would be overseen by the Chatham County Hospital Authority. 

In the Novant deal, the County was not selling the hard assets of the hospital system – the buildings and land – but rather leasing them all to Novant.  In this way, the County maintained control of the publicly-owned hospital.   But in the HCA deal, priced similarly to the Novant figures, HCA will own $600 million, at least, worth of buildings, land and equipment.  

The Attorney General’s office must approve the deal, and as part of that process, a public hearing was held Nov. 17 in Savannah.  At the hearing, the commitment to maintain current services by HCA, including to continue with the construction of the children’s hospital, and the continuation of the affiliation with Mercer University’s School of Medicine, were emphasized.  The issue of the valuation of the property included in the deal was not raised.

After all debt is paid off, the remaining proceeds from the $710 million sale are slated to go to the indigent care fund, it was explained at the hearing,  because Memorial University Medical Center is termed the ‘safety net’ hospital for indigent in the region, though the St. Joseph’s/Candler system also provides a high level of indigent care annually at its multiple facilities and clinics.

The Attorney General must review all transactions related to the acquisition or sale of assets of non-profit hospitals in Georgia. 

Back in April, Memorial Health Inc.’s Board of Directors unanimously agreed to a Letter of Intent for the HCA acquisition, and the details were then developed over the summer and fall, leading the Asset Purchase Agreement now before the AG’s Office, after HCA completed its 60-day due diligence period.  

The value of Memorial Health, Inc. – the business with billions a year in total billings - is difficult to ascertain as no one expects that HCA will run the hospital with the losses that the current management team has sustained. HCA runs profitable hospitals across the Southeast.  Their quarterly financial records are available at www.sec.gov.

But, the value of the acquisition of the hard assets of buildings and land is a bit clearer:  each building and piece of property, owned by each of the different corporation names used by the Memorial Health system, have a Chatham County property record card.  The assessed value of each has been determined by the Chatham County Tax Assessors, though each property is “exempt” and pays no property taxes because Memorial Health, Inc. was a non-profit.

After the sale closes, HCA can sell off any of the properties, even the main hospital and campus, and lease it back from the purchaser, often done by businesses.  The sale of some or all of the properties could theoretically surpass whatever HCA pays for the hospital system. 

All property record cards can be found at boa.chathamcounty.org, and are  public records.  The dates that the assessments were updated is also indicated.  Many of those ‘revaluations’ have not been completed for a number of years.

Here is a partial list of property owned by just a few of the corporate entities under the Memorial Health, Inc. umbrella: 

Here's a partial list of property that HCA would acquire if the deal close:  

2-0104 -15-003  MEMORIAL HEALTH UNIVERSITY               1405       E              59TH      ST

2-0104 -15-004  MEMORIAL HEALTH UNIVERSITY                             E              59TH      ST

2-0104 -15-013  MEMORIAL HEALTH UNIVERSITY               1404       E              60TH      ST

2-0104 -22-001  MEMORIAL HEALTH UNIVERSITY               1401       E              60TH      ST

2-0104 -22-002  MEMORIAL HEALTH UNIVERSITY               1403       E              60TH      ST

2-0104 -22-008  MEMORIAL MEDICAL CENTER INC              PARNELL AVE

2-0104 -22-009  MEMORIAL MEDICAL CENTER INC             1406 PARNELL AVE

2-0104 -22-010  MEMORIAL MEDICAL CENTER INC             PARNELL AVE

2-0104 -22-012  MEMORIAL MEDICAL CENTER INC             1402       E              62ND     ST

2-0104 -22-013  MEMORIAL MEDICAL CENTER INC             PARNELL AVE

2-0104 -27-001  MEMORIAL MEDICAL CENTER INC             1116                       LEXINGTON        AVE

2-0104 -27-002  MEMORIAL MEDICAL CENTER INC             1118                       LEXINGTON        AVE

2-0104 -27-003  MEMORIAL MEDICAL CENTER INC             1120                       LEXINGTON        AVE

2-0104 -27-005  MEMORIAL MEDICAL CENTER INC             1124                       LEXINGTON        AVE

2-0104 -27-006  MEMORIAL MEDICAL CENTER INC             1126                       LEXINGTON        AVE

2-0104 -27-007  MEMORIAL MEDICAL CENTER INC                                            LEXINGTON        AVE

2-0104 -28-006  MEMORIAL MEDICAL CENTER INC             1145                       LEXINGTON        AVE

2-0104 -30-001  MEMORIAL MEDICAL CENTER INC             1202                       LEXINGTON        AVE

2-0104 -30-002  MEMORIAL MEDICAL CENTER INC             1204                       LEXINGTON        AVE

2-0104 -30-004  MEMORIAL MEDICAL CENTER INC             1208                       LEXINGTON        AVE

2-0104 -30-005  MEMORIAL MEDICAL CENTER INC             1210                       LEXINGTON        AVE

2-0104 -30-007  MEMORIAL MEDICAL CENTER INC             1214                       LEXINGTON        AVE

2-0104 -30-009  MEMORIAL MEDICAL CENTER INC             1218                       LEXINGTON        AVE

2-0104 -30-010  MEMORIAL MEDICAL CENTER INC             1220                       LEXINGTON        AVE

2-0104 -30-011  MEMORIAL MEDICAL CENTER INC             1222                       LEXINGTON        AVE

2-0104 -30-026  MEMORIAL MEDICAL CENTER INC             1121                       WINSTON            AVE

2-0104 -30-028  MEMORIAL MEDICAL CENTER INC             1115                       WINSTON            AVE

2-0104 -30-034  MEMORIAL MEDICAL CENTER INC             4720                       WATERS               AVE

2-0104 -30-035  MEMORIAL MEDICAL CENTER INC             4720                       WATERS               AVE

2-0105 -06-001  MEMORIAL MEDICAL CENTER INC             1114                       LEXINGTON        AVE

2-0105 -06-002  MEMORIAL MEDICAL CENTER INC             1112                       LEXINGTON        AVE

2-0105 -06-003  MEMORIAL MEDICAL CENTER INC             1110                       LEXINGTON        AVE

2-0105 -06-004  MEMORIAL MEDICAL CENTER INC             1108                       LEXINGTON        AVE

2-0105 -06-006  MEMORIAL MEDICAL CENTER INC             1104                       LEXINGTON        AVE

2-0105 -06-007  MEMORIAL MEDICAL CENTER INC             1102                       LEXINGTON        AVE

2-0105 -07-008LMEMORIAL MEDICAL CENTER INC            1101                       LEXINGTON        AVE       

2-0105 -07-016  MEMORIAL MEDICAL CENTER INC             1101                       LEXINGTON        AVE

2-0105 -10-001  MEMORIAL MEDICAL CENTER INC             1111                       WINSTON            AVE

 2-0114 -04-003 MEMORIAL MEDICAL CENTER INC             1205       E              66TH      ST

2-0114 -04-005  MEMORIAL MEDICAL CENTER INC             1211       E              66TH      ST

2-0114 -01-005  MEMORIAL HEALTH CREDIT UNION         901         E              65TH      ST

2-0114 -01-013  MEMORIAL HEALTH CREDIT UNION         904         E              66TH      ST          

2-0114 -04-006  MEMORIAL MEDICAL CENTER INC             1213       E              66TH      ST

2-0114 -04-007  MEMORIAL MEDICAL CENTER INC             1217       E              66TH      ST

2-0114 -04-008  MEMORIAL HEALTH UNIVERSITY               1228       E              67TH      ST

2-0114 -04-011  MEMORIAL MEDICAL CENTER INC             1212       E              67TH      ST

2-0114 -04-012  MEMORIAL HEALTH UNIVERSITY               1210       E              67TH      ST

2-0114 -04-013  MEMORIAL MEDICAL CENTER INC             1206       E              67TH      ST

2-0114 -04-014  MEMORIAL MEDICAL CENTER INC             1202       E              67TH      ST

2-0114 -04-015  MEMORIAL HEALTH UNIVERSITY               1201       E              66TH      ST

2-0114 -05-007  MEMORIAL MEDICAL CENTER INC             1111       E              66TH      ST

2-0114 -05-017  MEMORIAL MEDICAL CENTER INC             1107       E              66TH      ST

2-0114 -11-003  MEMORIAL MEDICAL CENTER INC             1215       E              67TH      ST

2-0115 -05-016  MEMORIAL MEDICAL CENTER INC                             E              66TH      ST

2-0115 -05-017  MEMORIAL MEDICAL CENTER INC             1300       E              66TH      ST                                                              

OWNED BY:  PROVIDENT HEALTH SERVICES INC.   

2-0104 -22-005                  PROVIDENT HEALTH SERVICES INC            1409       E 60TH   ST

2-0105 -05-013                  PROVIDENT HEALTH SERVICES INC            1103       E 60TH   ST

2-0105 -10-001A               PROVIDENT VENTURES INC          4750   WATERS AVE

2-0105 -10-001B               PROVIDENT VENTURES INC          4750    WATERS AVE

2-0105 -10-001C               PROVIDENT VENTURES INC          4750    WATERS AVE

2-0105 -10-001D               PROVIDENT HEALTH SERVICES INC            4750  WATERS AVE

2-0105 -10-002                  PROVIDENT HEALTH SERVICES INC            1109  WINSTON AVE

2-0105 -10-002A               PROVIDENT VENTURES INC          4750  WATERS AVE

2-0105 -10-002B               PROVIDENT VENTURES INC          4750   WATERS AVE

2-0105 -10-002C               PROVIDENT VENTURES INC          4750   WATERS AVE

2-0105 -10-003                  PROVIDENT HEALTH SERVICES INC            1107  WINSTON AVE

2-0105 -10-003B               PROVIDENT VENTURES INC          4750  WATERS AVE

2-0105 -10-003C               PROVIDENT VENTURES INC          4750  WATERS AVE

2-0105 -10-003D               PROVIDENT HEALTH SERVICES INC            4750  WATERS AVE

2-0105 -10-003E                PROVIDENT VENTURES INC          4750  WATERS AVE

2-0105 -10-004A               PROVIDENT VENTURES INC          4750   WATERS AVE

2-0105 -10-015                  PROVIDENT VENTURES INC          4600  WATERS AVE

2-0105 -10-017                  PROVIDENT VENTURES INC          4600  WATERS AVE

2-0863 -01-002G               PROVIDENT HEALTH SERVICES INC            14089  ABERCORN ST

5-0017A-01-021                 PROVIDENT HEALTH SERVICES INC            N    GODLEY STATION BLVD

5-1010 -01-054                  PROVIDENT HEALTH SERVICES INC            205 MEMORIAL BLVD

1-0115 -01-048                  PROVIDENT HEALTH SERVICES INC            1003  MEMORIAL LN

5-1010 -01-055                  PROVIDENT HEALTH SERVICES INC            200  MEMORIAL BLVD

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