The request by Kirchoff Medical Properties, HealthQuest Inc, and its affiliate, Northern Dutchess Hospital, for a PILOT, a payment-in-lieu-of-taxes, for seven years for the construction of a medical building on the campus of Northern Dutchess Hospital should not be approved by town, village, and school district officials. The granting of a PILOT is nothing more than a not-too-veiled taxpayer subsidy to a for-profit business.
Proponents of this project and the PILOT request will suggest that the grant of a PILOT will reap economic benefits to the community and without it, the building will not be constructed. In my opinion, this building will be constructed with or without the PILOT.
The real issue that needs to be addressed is the greater return on investment the developer and hospital will receive as a result of the PILOT. It is admirable that the developer is “gifting” the building back to the hospital over 35 years, but what tax benefits will accrue to Kirchoff by putting the title to the property in a family trust initially and subsequently over the terms of the lease to the hospital. Do they really need additional real estate tax benefits while the rest of the community sees their property taxes rising every year? Officials should also consider the need for a PILOT program for benefit of the hospital. While the hospital is a not-for-profit, this does not mean that they don’t earn profit, just that they do not pay income taxes on it.
Lastly, officials should inquire with hospital representatives if the hospital currently leases or has plans to lease, rent or provide space to other for-profit medical practices or doctors who are now occupying or may occupy space on the campus. Is the hospital currently enjoying not paying taxes on that portion of their building or campus?
John C. VanWormer
Rhinebeck resident and Former Chair of the Board of HealthQuest and Northern Dutchess Hospital