Wheeling Council Approves B&O Tax for New Ohio Valley Medical Center Owner
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Wheeling City Council voted 7-0 Tuesday to charge Alecto Healthcare Services 17 cents for every $100 in gross revenue the southern California firm generates for operating Ohio Valley Medical Center, while planning to spend $3 million or more in Center Wheeling to facilitate the company's $36 million purchase.
The approximately $3 million will come from a planned $5 million tax increment financing bond sale, which city leaders said can only occur because Alecto is a taxpaying entity. Up to $2 million of this will go toward upgrades at the Center Wheeling parking garage, with the remaining portion going to the demolition of the former nurses' residence at OVMC.
After the meeting, Vice Mayor Chad Thalman responded to a comment by Wheeling Hospital spokesman Gregg Warren in a story published in the Sunday News-Register that "private health care businesses should not look to the city for taxpayer help."
Thalman said Wheeling Hospital does not pay this kind of tax to the city, which is the reason it does not qualify for TIF funding.
"We would be very happy to give Wheeling Hospital a similar deal if they give up their tax-exempt status," Thalman said.
Contacted late Tuesday, Warren said Wheeling Hospital had no further comment on the matter.
"There is no such thing as a perfect transaction," Mayor Glenn Elliott said Tuesday of the Alecto matter. "And even if Alecto had never come around, we would still need to put money into that parking garage."
Tuesday's unanimous vote by Elliott, Thalman, Councilwoman Wendy Scatterday, along with Councilmen Ken Imer, Brian Wilson, Ty Thorngate and Dave Palmer, established the 17 cents per $100 tax for Alecto. However, the vote to establish a TIF district that includes the OVMC property will come later.
"We appreciate what has been a very good working relationship with the city, which was evidenced by this evening's vote. As a for-profit entity, Alecto will be paying its fair share of taxes, which will provide the city with a new and reliable stream of revenue that does not exist with not-for profit hospitals," OVMC spokeswoman Karin Janiszewski said late Tuesday. "As Alecto is provided more information relevant to the city parking garage, including the actual costs associated with deferred and necessary maintenance and upgrades, we will work with the city to finalize plans that are beneficial to both parties."
Plans tentatively call for the city to transfer ownership of the garage to the Area Development Corp., which is a nonprofit entity that Wheeling uses to facilitate property deals. The ADC will then lease the 830-space garage to Alecto for $1 per year. Meanwhile, city leaders say Alecto plans to construct a new building on the nurses' residence site.
After spending about $3 million for Alecto in Center Wheeling, Elliott and Thalman said the city could use the remaining $2 million from the bond sale for other development within the TIF district.