Spring Harbor retirement home, city seek ruling without trial in property tax dispute

Retirement community currently exempt from property taxes

mowen@ledger-enquirer.comFebruary 26, 2012 

A five-year legal battle between the city of Columbus and the Medical Center Hospital Authority over whether the Spring Harbor retirement community at Green Island is exempt from paying property taxes may be coming to a head.

Attorneys for both parties recently filed motions for summary judgment, meaning both sides are asking a Superior Court judge to rule on the issue without a trial.

Attorneys for both entities either declined to comment on the litigation or did not return phone requests for comment. Dr. Mike Gorum, chairman of the Hospital Authority, also declined to comment.

In their court filing seeking the summary judgment, Hospital Authority attorneys Jerome and Andrew Rothschild wrote that Spring Harbor is exempt from property taxes for two reasons: It is public property, in that it is owned by the hospital authority, which is a “governmental entity;” and it is a “home for the aged.”

The hospital authority was created under the state’s Hospital Authority Law and is thus a governmental entity, they wrote. That means that all property owned by such a governmental entity is considered public property and is exempt from taxation.

The authority’s brief cites Carlyle Place in Macon, Ga., which it claims is very similar to Spring Harbor and is exempt from taxation. They list amenities and fees similar to Spring Harbor and describe it as “virtually identical in every way.”

Attorneys for the city respond that Spring Harbor is not the kind of facility the Legislature had in mind when it created the exemption for facilities for the elderly.

“The legislature intended to create an exemption for nursing home type facilities which accept residents irrespective of their financial status and ability to pay,” the city’s motion says, at one point referring to Spring Harbor’s “country club lifestyle.”

The city points out that entrance fees at Spring Harbor can be as high as $500,000 and monthly fees are in the $3,000-$4,000 range, in addition to the fact that if a resident becomes unable to pay the monthly fees, they are kicked out.

“The traditional nursing home facility carries a charitable attribute in that a traditional nursing home accepts occupants irrespective of their financial ability to pay,” the brief reads. “Such is not the case with Spring Harbor.”

The complex features 160 apartment homes and 36 two- and three-bedroom villas. Residents, who must be at least 62 years old, have access to a theater, a formal dining room, a deli, an exercise facility, an indoor swimming pool, a bank branch, storage units, a beauty salon and a pharmacy/gift shop. The facility has a liquor license so alcoholic beverages may be served.

In 2004, the Hospital Authority issued $74.6 million in tax-exempt bonds to build Spring Harbor on 40 acres near Double Churches Road and Green Island Drive.

Columbus Regional Healthcare System Inc. owns the land on which Spring Harbor was built and leases it to the Hospital Authority. Columbus Regional pays property taxes on the land itself, but the Hospital Authority contends that the “improvements” to the land, the Spring Harbor complex, is not taxable.

The city has been sending tax bills to the Hospital Authority since 2006, causing the authority to file its lawsuit in 2007. In all, the city has sent bills totaling more than $7 million, according to city records.

Professor Frank Alexander teaches property law, among other things, at the Emory University School of Law in Atlanta. Alexander said he was limited in what opinions he could offer because he has not seen the filings. But he did comment on the timing of the most recent filings.

Alexander said the fact that the cross motions for summary judgment were filed on the same day could mean three things: Coincidence, a court-imposed deadline or both parties could have privately agreed to file the motions and let the judge decide.

“It would not surprise me that both would say, ‘We’ve litigated enough, we’ve got all the evidence and facts that we need. Let’s put it before the judge and ask him to rule. We’ll both file cross motions for a summary judgment,’” Alexander said. “They’ll both do this knowing that they will appeal if they lose.

“And keep in mind, the judge can deny both motions and say, ‘No, I’m going to go to full trial on the issues.’”

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