Wheeling Vice Mayor Thalman: $3 Million Needed to Save OVMC
WHEELING — Vice Mayor Chad Thalman said Alecto Healthcare Services will not purchase Ohio Valley Medical Center unless the city spends $3 million to upgrade the Center Wheeling parking garage and to demolish the building that once housed the hospital’s nursing staff.
At 5:30 p.m. today, Thalman and other city council members are expected to consider a memorandum of understanding that he said is necessary for the Irvine, Calif.-based firm to finalize its purchase of the financially troubled hospital. Thalman said the memorandum is the first step in the process for the city to assist in the facility’s sale.
“They want the old nurses’ residence demolished so that they can build a new building there at some point in the future,” Thalman said.
According to the memorandum and Thalman, the city can create a tax increment financing district for the hospital site because Alecto is a for-profit company that will pay property taxes. Ohio Valley Health Services & Education Corp., the parent firm of both OVMC and Martins Ferry’s East Ohio Regional Hospital, is a nonprofit entity that is exempt from property taxes, Thalman said.
TIF is a tool that allows governments to borrow money to perform improvements to a property and use the revenue from a resulting increase in property values to repay the debt. Although the West Virginia Development Office must approve the TIF district, Thalman said city leaders are confident this will occur. City leaders previously used TIF to demolish a series of buildings in the 1100 block of Main and Market streets downtown, where the new headquarters for The Health Plan are under construction.
According to Thalman, the city will issue about $5 million in bonds for the TIF project. He said preliminary plans are to spend $1.5 million to level the former nurses’ residence and $1.5 million to renovate the Center Wheeling parking garage. This leaves $2 million for additional development.
Thalman said between $500,000 and $600,000 will go toward replacing the elevators in the garage, while the remaining funds will go to repairing “general wear and tear.”
Plans call for the city to transfer ownership of the garage to the Ohio Valley Area Development Corp., which is a nonprofit entity that Wheeling uses to facilitate property deals, in accordance with West Virginia Code. The city will then lease the 830-space garage to Alecto for $1 per year.
According to the agreement, the Wheeling Fire Department will continue to use the Market Street side of the garage for its headquarters.
“Alecto will have the sole right to establish charges for hourly, daily, monthly and validated parking in the garage,” the agreement states, although it adds that the company should consult with the city about any “significant” increases in parking rates.
Because Alecto is a for-profit entity, the city can impose business and occupation taxes on it. The new rate will be 0.17 percent.
“They (Alecto) want to know what B&O rate they are going to pay. We have to create a brand new hospital B&O tax,” Thalman said. “Wheeling Hospital will not pay B&O because they are nonprofit.”
The B&O tax continues to be Wheeling’s main source of revenue. According to the fiscal 2017-18 budget projection, City Manager Robert Herron expects receipts to increase slightly in the new year to $6.65 million, in addition to $2.85 million in delinquent B&O taxes the city expects to collect.
Thalman didn’t know how much the city would gain from the new B&O tax on OVMC, but he said the money would go into the general fund.
Thalman said the city must do its part to ensure the future of OVMC, which provides about 1,500 jobs in the area.
“Our main goal has to be to keep these jobs in the city of Wheeling,” he said.
Michael Garrison, an attorney representing Alecto, did not immediately respond to a request for comment.