City and health system continue dispute over property tax status
By Mike Warren
MARSHFIELD – Marshfield officials are involved in another legal dispute with the city’s largest employer, over the property tax status of two of its parcels.
Marshfield Clinic Health System is seeking tax-exempt status for its main building and east wing at 1000 North Oak Avenue. The clinic made the request back in January, which the city denied in April. The clinic responded with litigation shortly thereafter, and the two sides have had ongoing deliberations since.
The Marshfield Common Council held closed-session discussions regarding the claim during its Sept. 14 and 21 meetings.
“You’re likely to see this (on the agenda) a lot,” Marshfield City Administrator Steve Barg told the Hub City Times on Sept. 15. “And it’s going to raise some eyebrows, because normally when we go into closed session to talk about a development agreement, you might see it one or two meetings, maybe three at the most, before we come out and take action.”
The clinic is claiming the two facilities are used primarily for hospital uses, and therefore deserve the exemption given to hospitals under Wisconsin law.
Marshfield Clinic Health System Executive Vice President/General Counsel Jerard Jensen told city aldermen at the Sept. 21 meeting the East Wing “is a hospital. It functions as a hospital. And, over the next couple months, everything in that building that isn’t a hospital use is going to be converted to a hospital use.”
“This is the first major piece of our plan to invest $600 million dollars to improve our Marshfield campus to bring it up to speed, so that it can operate here for another 100 years,” he added.
To make the project work, Jensen said the Marshfield Medical Center – the former St. Joseph’s Hospital – would need extensive remodeling, “and we can’t do that without having a place to put the patients who we have to remove to do the remodeling.”
Jensen also told the council, “The first leg in this project is to build a connector between the old hospital and the new hospital (East Wing), so that we can effectively move those patients back and forth.”
However, the clinic’s plans for the new skywalk hit a roadblock when Marshfield aldermen voted 5-4 during their Sept. 21 meeting against an ordinance that would have granted the clinic a lease for the use of air space over Oak Avenue, which is required for such structures under Wisconsin statutes.
The denial came two months after the council voted on July 13 in favor of the lease form. The clinic’s two existing skywalks over Kalsched Street and Oak Avenue connect the main building with the Laird Center for Medical Research and the East Wing, and are both permitted under similar leases.
As for the tax-exempt fight, the city has hired the law firm of Stafford Rosenbaum, and those expenses are being covered by the city’s insurance carrier.
There is a lot at stake for the city. Marshfield Clinic’s main building and East Wing are currently assessed at $112 million dollars. That amounts to roughly 7 percent of the city’s $1.6 billion valuation.
The issue would end up in circuit court if no agreement is reached, according to Barg.
The two sides have resolved past tax-exempt debates with a “PILOT”, or “payment in lieu of taxes,” in which the clinic paid the city a pre-determined amount of money instead of annual property taxes.