BY MIKE WARREN
EDITOR
MARSHFIELD – The City of Marshfield and Marshfield Clinic Health System have avoided a Circuit Court trial and have reached an agreement over a property tax dispute. The agreement was approved by the Marshfield Common Council March 12 on a vote of 9-0 with one alderman abstaining, following a 40-minute closed session. Marshfield Clinic officials then signed the out-of-court settlement the following morning.

At question was the tax-exempt status of Clinic properties at 1000 and 1001 N. Oak Ave. The parties arrived at an agreement whereby the properties are deemed to be partially exempt, and the assessment structure fully addresses and resolves the tax payments for tax years 2020–2028. 

“The City greatly values its relationship with Marshfield Clinic Health System, and we are pleased to have reached an agreement that is acceptable to both parties,” said City Administrator Steve Barg. “This paves the way to  continue and strengthen our cooperation and coordination to the greatest degree possible for  the betterment of our community and the surrounding area.”

“Marshfield has been our home for more than a century, and we are fully committed to seeing the community thrive,” said Dr. Brian Hoerneman, interim chief executive officer for Marshfield Clinic Health System. “We employ thousands of community residents, support area business and community organizations and build and support educational programs, and as a major economic driver for the region, we continually look for ways to further make Marshfield a premier health care destination in Wisconsin. We thank the City for its cooperation in arriving at a mutually-beneficial resolution.”

According to the new five-year agreement, each side acknowledges that a portion of the property may qualify for tax-exempt status and also that the Clinic “receives valuable government services and benefits from the city.” The agreement expires Dec. 31, 2028.  

According to the agreement, “the discussions culminated in the filing of lawsuits entitled Marshfield Clinic, Inc. v. City of Marshfield, which describe the property tax exemption dispute for tax years 2020-2022 and which have given rise to negotiations and an agreement addressing and resolving the property no longer qualifies for partial property tax exemption due to a material change in the law or a material change in the property’s use or ownership.”

“The premise is that, without any reduction, the 2024 real estate taxes on these two parcels (for payment in 2025) would be approximately $1.8 million (barring any changes to the current mill rates assessed by each of the four taxing jurisdictions). Under the agreement, [Marshfield Clinic] will be obligated to make their full payment, and the City will subsequently provide a refund check, so that their ultimate tax bill will have been $1,272,214.78,” Barg told Hub City Times in a March 13 email. “Should the mill rate increase in future years, that will be reflected in the equation, and any increase will result in a greater refund. After making its annual refund payment to the Clinic, the City will do a ‘charge-back’ to each of the taxing jurisdictions to recoup their portions of the refund.”

Had Marshfield Clinic won a legal court battle, the City of Marshfield stood to lose 4.7 percent of its general fund revenue, had the clinic’s 50-year-old main building and adjacent 20-year-old East Wing be declared tax-exempt. That equates to $1.1 million. All told, the city, the School District of Marshfield, Wood County and Mid-State Technical College would have lost a combined $2.8 million. The assessed value of the two parcels in question is $112 million. That’s 7.5 percent of the City of Marshfield’s annual tax revenue.