The Columbus City Council narrowly approved a tax incentive for $2.9 million in renovations for a downtown doctor’s office, over the protests of the mayor and Bartholomew County Commissioners.
The council voted 4-1 Tuesday to approve a three-year tax abatement for Tipton Park Offices, owners of the former Goodyear Columbus Tire store at 123 Washington St. The renovations will be made so that Franciscan St. Francis Health can open a primary care doctor’s office at the building, just off the Second Street Bridge.
To pass, the measure needed a majority of the seven-member City Council to vote in favor. Two members recused themselves, and council member Aaron Hankins opposed the resolution.
Nolan Bingham, a local architect working on the project, said the project will require gutting the building and renovating it inside and out. Although it will have the same number of square feet of office space, it will have different exterior brick and stone and new landscaping that meets city standards; and the Second Street entrance will be removed, requiring traffic to enter on Lindsey Street.
Brant Wright, attorney for St. Francis, said the office would start with two doctors, five medical assistants and an office manager. The starting salaries would range from $81 an hour for the physicians to $18 an hour for the medical assistants, Wright said. All would be positions with benefits, he said.
Wright said St. Francis has not entered into this sort of lease agreement before, but the downtown location offered a unique opportunity.
The property has been owned for more than 20 years by the Becker family, who also own Becker’s Drive-In. Bill Becker said Tipton Park Offices is locally owned and family controlled and has been doing business in the community for more than 40 years.
Becker said that because the tire company closed in 2000, the family has been approached by a variety of renters who have offered to turn the property into another tire store, a used car lot, a fast-food restaurant or a tanning salon, among other uses. He said the family held out until it found a high-quality tenant for the property.
“Here is a situation where everybody wins,” Becker said. “We get a long-term, quality tenant. The tenant gets access to a very visible, high-traffic location. The city gets a downtown property renovated, providing health care for downtown residents and workers where there now is none.”
One of the few public comments came from County Commissioner Larry Kleinhenz, who said he was speaking for all the commissioners. Kleinhenz listed other doctor’s offices who have made multimillion-dollar renovations and investments in recent years but received no tax abatements.
“I have received several calls from some of these physician groups really upset about the possibility of a direct competitor providing a similar service that they provide that would even be considered for a tax abatement, when none of them received tax abatements,” he said.
Kleinhenz said he knows of at least two medical facilities negotiating to open facilities in western Columbus, and he felt approving the Tipton Park Offices/St. Francis request opened the door to having to approve those also.
Mayor Kristen Brown said she agreed with the commissioners, in this instance. She said she opposed the use of tax abatement for service-related businesses and thought it should be reserved for primary employers.
“This is granting a tax abatement for the development of an office park,” Brown said. “It is not something we have done historically. Almost entirely, our tax abatements have been granted to primary employers. ... Their primary market is not our local market. Their markets are national markets and more often global markets. Physicians in our community would be secondary employers.”
Another audience member questioned how long the city could choose to issue the tax abatement. Council member Frank Miller said the abatement could be for three, six or 10 years.
Miller said that for him the debate came down to a request from a local business for help renovating a dilapidated property. He said that St. Francis could simply choose another location in Columbus for offices and not pay any property taxes on it because it is a nonprofit company.
Tracy Souza, a trustee of Columbus Regional Health, said that Columbus Regional Hospital does not pay taxes on its main building but has chosen to pay property taxes on other facilities it owns, including outlying doctor’s offices and even neighboring medical buildings.
Hankins voted against the tax abatement. During questioning of the St. Francis representatives, he said the downtown area already has been built up and he can’t see why it needs more assistance in economic development. He asked if there was any sunset provision to phase out downtown as an economic revitalization area.
“How can we designate this as an ERA when we have a First Financial as a next-door neighbor, we have new The Cole apartments as a next-door neighbor? Or we have a Cummins (downtown),” Hankins said.
“That is the bigger question, why should it be? If you look at it right now, that is where all of our expansion and growth and development within our city is.”
Council members Ryan Brand and Tim Shuffett recused themselves from the vote because of conflicts of interest. Both are involved in the construction business.
Columbus Regional Hospital has opposed the tax abatement. No representatives from the hospital administration were present at the City Council meeting, but CEO and President Jim Bickel said in an e-mailed statement after the meeting that the hospital’s complaint is not about limiting competition.
“The City Council’s decision to provide a tax abatement that benefits an out-of-town medical entity is disappointing because local physicians do not have such tax advantages,” Bickel said.
“We have delivered on our mission as a county-owned, not-for-profit hospital for over 96 years, and our approach has always been centered on collaboration with physicians and others to address our community’s long-term health needs. We hope that this medical office will work in cooperation with the local medical community, and help us address the needs of the uninsured and underinsured with a long-term focus on creating a healthier community.”