Although a new tax increment financing district encompassing Lutheran Health Network's new downtown hospital was approved, some members of the Fort Wayne City Council expressed concerns about the timing of the request and the designation's impact on city tax revenue.
Tax increment financing districts capture property tax revenue generated within a specific area. Those funds can then be used for improvements within the district itself.
The proposal was approved in a 5-4 vote Tuesday night. Council Members Paul Ensley, R-1st, Russ Jehl, R-2nd, Jason Arp, R-4th, and Sharon Tucker, D-6th, voted against the designation.
Jehl said he is concerned that creating a TIF District for the hospital would result in a $400,000 loss in property tax revenue for the entire city.
“It's no small matter. This is actually, if I understand it correctly, not just capturing increment, this is really blowing a large hole in our revenue during COVID,” he said.
Redevelopment Manager Joe Giant said Jehl's point was well-taken but disagreed that the new hospital is causing the loss in tax revenue.
“This is a 150-year-old hospital, they could close tomorrow and that tax revenue would go away,” Giant said of the facility. “Fortunately they're re-upping and building downtown next to it.”
Giant also pointed to a “significant increase in jobs here that does offset this loss in funds to the general fund.”
Tucker, D-6th, wondered why “we are just now looking at providing a tax incentive for this project,” when construction began some time ago. “It's obvious that they were going to do the project without the tax incentive,” she said.
The pandemic is part of the reason the hospital requested a TIF designation, said Twilla Lee, CEO of Lutheran Downtown Hospital, which is being built to replace an aging St. Joseph Hospital. As COVID-19 took hold, “resources were redirected, diverted to manage some of those emergent situations,” she said.
The project is expected to add nearly 500 jobs with the new hospital, Lee said. The positions will be newly created for the downtown hospital.
The new hospital will offer services including general surgery, gastrointestinal services, interventional radiology, general cardiology, bariatric surgery and a range of testing.
“All of those services would add to the need for the additional nearly 500 employees to the hospital,” she said.