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Wheeling City Council Delays Decision on OVMC Property

Nearly all of the buildings on the Ohio Valley Medical Center campus have remained vacant since the hospital closed its doors in September. Members of Wheeling City Council have been discussing whether or not the city should accept an offer to acquire the property from the current owner, Medical Properties Trust.

WHEELING — Members of Wheeling City Council on Tuesday night decided to table the proposed purchase agreement for the former Ohio Valley Medical Center property as city leaders continue to weigh the pros and cons of such a large acquisition.

Legislation on the purchase agreement for OVMC was on the agenda for a second and final reading during council’s regular meeting, but Mayor Glenn Elliott asked members of council to table the matter and hold another executive session to discuss the possible purchase.

“We’re still doing a lot of due diligence on this, but I don’t think we’re right where we need to be to make that full decision,” Elliott said.

Officials agreed to put the ordinance back on the agenda for the first city council meeting in June, which will still give the city enough time to close the transaction before July 1, for which the current owners — Medical Properties Trust or MPT — have asked because of tax purposes.

“We all see value in these properties,” the mayor said on behalf of council members. “We’ve all toured them, we’ve all walked through just about every part of every building. I think we definitely see value there. Is it the $40 million the assessor says for the value? I don’t know, but I feel confident that that value is somewhere comfortably above zero.”

MPT has offered to transfer ownership of the OVMC property to the city of Wheeling for the cost of transaction fees — including legal and brokerage costs, and a share of property taxes currently owed, which is a number that is not clear, but clearly manageable regardless of the number.

“What that amount is — it’s still up in the air right now,” the mayor explained. “MPT had requested a reevaluation on what they owe for property taxes.

“But whatever those property taxes are, one thing that has been left out of the discussion has been because we created a tax increment financing district around the OVMC campus in 2017, the city in effect would get roughly 58 percent of those property taxes directly back.”

Because of the TIF district, if the city would acquire the property and had to pay $500,000 in property taxes, the city would get $290,000 back, Elliott said.

“That’s something to keep in mind,” he said. “Before we do vote on this, we’ll make sure we know exactly what those tax numbers are going to be or at least have a pretty good idea thereof.

Taxes and purchase price are not the issue, the mayor noted. The ongoing exploration into the proposal focuses more on the liability and holding costs of such a huge piece of property.

“We’re comfortable with the purchase price,” the mayor said. “Much of the due diligence that’s going on right now has to do with us getting our hands around what the holding cost is going to be going forward. For us to manage them is probably a little easier for us to do than MPT because we’re here. MPT has to pay a third-party firm because they’re not located in Wheeling.”

MPT, headquartered in Alabama, has to pay experts and engineers from the Ohio Valley to maintain the OVMC property. MPT is in the business of managing hospital facility properties that are in operation, officials have noted, explaining that the company has no interest in continuing to manage facilities that are no longer being used as hospitals.

There are local people who have worked at the properties for years and are familiar with the buildings. If the city would acquire the campus, the mayor indicated that the city would likely look at keeping those individuals.

Officials are exploring ways to potentially repurpose and use some of the buildings on the campus, including the Valley Professional Building, which has been eyed as a potential location for the city’s new Public Safety Building to house its police and fire departments’ headquarters.

“There are a lot of moving parts, and I assure you everyone on council is taking this very, very seriously,” Elliott said.

City Manager Robert Herron said the creation of the TIF district around OVMC occurred as Alecto took ownership, converting property that was formerly tax-exempt to one that was taxable.

“As a result of that, we do have a very successful tax increment financing district,” Herron said. “Going into that project, the coverage ratio for the debt service which was issued was 175%, which has to be one of the strongest tax increment financing district coverage ratios in the state.”

The original and one of the most successful such property tax districts in the state is the city of Wheeling’s downtown, which had a coverage ratio of 135 percent.

“As a result, even as of today, we have $587,000 in our tax increment financing account for OVMC,” Herron said. “We also have $387,000 in our debt service reserve, so as this project moves forward, part of the component of it is that property taxes, because it is taxable property, be paid as part of this transaction.”

If the city takes ownership, the property will become tax exempt.

During the open public forum section of Tuesday night’s meeting, Councilman Ken Imer read a letter from a constituent who was not able to appear during the Zoom meeting. That person was Tony Domenick, who is a candidate in Wheeling’s mayoral race.

Domenick urged council to table the OVMC purchase until after the municipal election in June.

“On June 9, no less that two seats on this council will change,” Domenick stated in the letter, noting that current council members Melinda Koslik and Wendy Scatterday are not seeking re-election, and three incumbent council members and the mayor are all being challenged. “Those new council members may very well have a very different view on this acquisition. It would only be ethical to wait until after the election.”

Domenick also requested that all of the issues being considered behind closed doors be brought into the light for the public to hear.

Council members went into executive session Tuesday night to further discuss the purchase of OVMC, but took no action on the matter after reconvening and moving to adjourn.

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