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BayCare Aurora suing Green Bay over hospital value, taxes

By John McCracken

GREEN BAY – The City of Green Bay is being sued by its largest taxpayer claiming a wrongful 2020 property tax assessment, based on a difference of almost $73 million in property value.

BayCare Aurora, LLC filed a suit in Brown County Circuit Court against the City of Green Bay in early August 2020.

According to Brown County property tax records, the total amount of property taxes imposed for 2020 on the Aurora BayCare Medical Center at 2845 Greenbrier Road was $3,587,853.

BayCare Aurora’s property is worth $196.3 million, according to Green Bay’s 2019 Comprehensive Annual Financial Report.

The private health care facility is also one of the top employers in the Green Bay metropolitan area and owned by one of the largest health care systems in Northeast Wisconsin.

The suit argues the fair market value of the property should be no higher than $72.9 million and the city should correct the assessment and that 2020 property taxes should be no higher than $1,754,703.

The 2020 assessment of the hospital on Greenbrier Road was $145.7 million, $3.88 million for the land and $141.82 million for the improvements.

According to the City Assessor’s office, the value was determined by the cost approach formula, which relates to how much it would cost to develop the property as a hospital.

The Greenbrier Road location is the only taxable hospital in the city. Other large health care systems in the area are not-for-profit organizations.

If BayCare Aurora would win in court, the City of Green Bay will be required to refund about half of the property taxes imposed for 2020 to the health care company.

The hospital is located in Tax Incremental Financing District (TID) No. 12 in the City of Green Bay.

TID No. 12 includes a large section of the I-43 Business Park and the far eastern corner of the city bordering the Village of Bellevue and Town of Humboldt.

Because the TID was created in 2005, after the health care facility was already built, only money from improvements made to the facility goes into the TID, while the rest of the property tax revenue is distributed to the overall levy.

In a Nov. 16, 2020, letter, the City of Green Bay denied all requests for correction to the assessment and refunding of payment.

Aurora BayCare stated if litigation goes beyond the date for payment due, the hospital will be entitled to a refund of its 2020 tax amount of around $1.7 million, or a greater amount determined by the court, as well as statutory interest, now at 4.25 percent.

Aurora BayCare claimed the city violated a section of the Wisconsin Constitution known as the Uniformity Clause.

This clause states “the rule of taxation shall be uniform but the legislature may empower cities, villages or towns to collect and return taxes on real estate located therein by optional methods.”

The city denies allegations of violating the clause and is seeking to dismiss the suit and affirm the assessment.

Green Bay assessor Russ Schwandt said the practice Aurora is pursuing has been cropping up in recent years elsewhere in Wisconsin.

“There’s money to be made, and this is where a lot of tax representatives do their business,” Schwandt said. “They take a shot and move onto the next community.”

Big-box retailers such as Menards, Woodman’s and Walmart have sued municipalities within Brown County in recent years on the basis of unfair property tax assessment, in what’s known as the Darkstore Loophole.

Schwardt said if tax representatives were interested in the welfare of their clients, they’d get the value reduced to the amount they are looking for within the first year, instead of dragging out litigation after multiple years and moving the burden to other taxpayers.

The facility on Greenbrier Road is a joint venture between BayCare Clinic, the largest physician-owned specialty-care clinic in Northeast Wisconsin, and Advocate Aurora Health, a merger between Advocate Health – the largest Illinois-based health system – and Milwaukee’s Aurora Health, now the 10th largest health system in the country.

“We value our relationship with the Green Bay community that we’re so privileged to serve,” said a statement from Aurora Health Care. “We’re following standard procedures to appeal this assessment, as it’s always our responsibility to be good financial stewards, especially as the pandemic has put stress on health care providers nationwide.”

Mayor Eric Genrich’s office declined to comment, citing ongoing litigation.

The Milwaukee-based, for-profit health care provider also owns a 769,313-square-foot property at 2253 West Mason Street.

The 2020 tax assessment for this location came in at $16,766,700.

The health care system has yet to submit a 2020 property tax payment for their 2.9-million-square-foot Greenbrier Road facility, with the first installment due at the end of January.

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