The recent purchase of MacNeal Hospital by Loyola Medicine is projected to leave a $3.5 million hole in Berwyn’s tax base, and West Suburban Medical Center in Oak Park could be next.
Berwyn’s total equalized assessed value (EAV) – the value of all taxpaying properties in the city – takes a hit from the sale, because for-profit Tenet Healthcare sold the hospital to nonprofit Loyola, making the property tax exempt.
Texas-based Tenet, which also owns West Suburban, along with Westlake Hospital in Melrose Park and Weiss Memorial Hospital on the city’s North Side, is expected to sell all three hospitals.
Oak Park Township Assessor Ali ElSaffar said taxpayers in the village also will take a hit if West Suburban is sold to a nonprofit like Loyola, but not as bad as Berwyn’s.
ElSaffar said that West Suburban is valued at $16.1 million and paid $2.3 million in taxes in 2017. Removing that from Oak Park’s total EAV of $1.386 billion would have increased Oak Park’s tax rate by 1.2 percent.
That means a homeowner who paid $10,000 in property taxes that year would have paid an extra $120, ElSaffar said. Berwyn is hit harder because Tenet paid approximately $3.5 million in taxes annually, ElSaffar said.
Oak Park has enjoyed the tax boost from West Suburban since 2010, when the hospital was sold from nonprofit Resurrection Health Care to for-profit Vanguard. Vanguard sold the hospital three years later to Tenet.
The sale of MacNeal was opposed by the Service Employees International Union Healthcare Illinois, Indiana, Missouri, Kansas, which argued that although Loyola Medicine is a nonprofit, it operates like a corporation and should not be tax exempt.
The union said in a Feb. 22 press release that the sale of MacNeal would have increased a Berwyn property tax bill of $5,000 a year by $185 – substantially more than the estimated $60 extra a similar Oak Park property owner would have paid if West Suburban were owned by Loyola.
“We’re here to send a message to the Illinois Hospital Association that workers and communities won’t be run over by big, rich hospitals and their lobbyists,” Anne Igoe, vice president of hospitals and health systems for SEIU said in a press release prior to the sale.
Joe Ottolino, CEO of West Suburban who is a former vice president at MacNeal, declined to say whether the hospital was on the market in an interview last year, but he noted that it is one of Tenet’s profitable hospitals.
West Suburban would not be the only nonprofit hospital in the village if sold to Loyola; Rush Oak Park Hospital also is partially tax exempt. The hospital paid $1.47 million in taxes in 2017 for its medical office building just south of the hospital.
Although the potential sale of West Suburban might not drive homeowners from the village by itself, ElSaffar noted that with increased tax assessments, it just adds to the pain felt by taxpayers.
He said potential tax burden, along with increased assessments and other fees is “death by 1,000 cuts.”
“It’s not like things were cheap [in Oak Park] in the first place,” he said.
* This story was updated to correct a reference to West Suburban as a nonprofit.
CONTACT: tim@oakpark.com