This was one of those stories that originated from what was supposed to be a pretty boring discussion about tax assessments. The Board of Mayor and Alderman were talking with the head assessor about the city’s tax base (zzzzz) when he mentioned that Elliot Hospital would likely ask for a non-profit exemption on a new, multi-million dollar medical building. That didn’t go over well with the aldermen, who are looking for tax relief where ever they can get it and expected a little help from this new development.

It prompted an investigation and the resulting data I featured in this article. Thankfully, I had the help of Mark Hayward’s great reporting, who landed a response from developer Dick Anagnost while I was out of town.

Hospital project’s tax bill questioned

Monday, March 21, 2011

By BETH LaMONTAGNE HALL and MARK HAYWARD

New Hampshire Union Leader

MANCHESTER — When Elliot Hospital pays its 2011 city property taxes on the new ambulatory care center at the Elliot at River’s Edge, it will only be charged for about 9 percent of the building.

The developer of the project, Bedford resident Dick Anagnost, said Elliot Hospital will claim tax-exempt status for most of the ambulatory care center. But subsequent parts of the development — such as a pharmacy and medical office building — will be subject to full property tax bills.

The Special Committee on Riverfront Activities and Baseball took up the Elliot at River’s Edge tax status issue on Monday after the aldermen questioned whether seeking the nonprofit tax exemption was part of the plan originally presented to them. Alderman Pat Long, who sits on the Riverfront Activities committee, said he was under the impression the project would not be subject to a tax exemption.

“My vote back then was contingent on the tax dollars we were going to be getting,” Long said.

Anagnost told the Union Leader earlier this month that Elliot always planned to claim tax-exempt status for most of the ambulatory care center. Only a few portions will be taxed, he said — a section of the parking garage, the cafeteria and the one-day surgery center, which is a joint venture between Elliot Hospital and a group of private physicians.

“It’s owned by a nonprofit hospital. Nothing’s changed from the very beginning,” Anagnost said.

Again on Monday, he said the proposal is largely the same now as it was when first presented to the board, including the tax revenue. The estimated $952,000 in taxes to be paid on the completed project included all four phases of the River’s Edge project, not just the ambulatory care portion, Anagnost said.

Board of Assessors Chairman Robert Gagne said the 2011 preliminary value of the ambulatory care center is $55 million, but about $7.5 million of that is taxable. Based on last year’s tax rate, the new building will be charged about $210,000 in property taxes this year. This is less than the city made on the project while it was under construction in 2010, Gagne said, because Elliot Hospital had not yet applied for the tax exemption.

Other parts of the River’s Edge to be fully taxed include a medical office building, residential units, and a commercial venture that will include a Dunkin’ Donuts, pharmacy and another retail company.

Projections last year estimated that the development will generate taxes of $952,000. But the city won’t likely see that for at least two years, Anagnost said.

The foundation has been laid for the medical office building, but Anagnost said he suspended construction on the building when the winter hit.

It won’t resume until he can get commitments to fill space that opened up when one big and two small tenants backed out, Anagnost said.

The financial risk would be too great to go forward without the tenants, he said.

“Unless I’m sure I can pay people back, you’re not going to see me doing anything,” Anagnost said. He said it should take about a year to build once construction begins.