Ridley Park approved a 17% tax increase as Prospect Medical disputes Taylor Hospital value
The tax increase could be reduced if Prospect Medical Holdings pays at least some of what it owes on last year's property tax bill.
Ridley Park Borough Council approved a 17% increase in 2024 property taxes to make up for money that Prospect Medical Holdings Inc. did not pay last year for Taylor Hospital, which is part of Crozer Health.
The borough is still trying to negotiate a settlement with Prospect that would cover at least part of the roughly $350,000 that Taylor’s for-profit owner owes for last year’s tax bill, Borough Manager Richard Tutak Jr. said Tuesday.
The council can reopen the borough’s budget, which it approved last week, until Feb. 15 to make adjustments if Prospect pays at least part of what it owes, Tutak said.
As it stands, the owner of a house valued at $178,000 will have to pay $350 more in taxes, he said.
Crozer officials confirmed that the company is in negotiations and said in an emailed statement: “We are optimistic that we will be able to reach a mutually agreed-upon resolution shortly.”
The town of 7,100 people is in the unusual position of having more than 10% of its $540 million tax base in one property, the hospital, which is assessed at $60.6 million for 2024. That means the failure of Prospect to pay its bill had an outsized impact on the financial position of the town, which is mostly residential.
Prospect has appealed the $60.6 million assessment to the Delaware Court of Common Pleas. That is a separate matter from the negotiations with Ridley Park over last year’s taxes.
Prospect has also appealed assessments for Crozer-Chester Medical Center in Upland and for the shuttered Delaware County Memorial Hospital in Drexel Hill.
Rocky financial history
In 2019, a real estate investment firm, Medical Properties Trust, acquired most of Crozer’s real estate from Prospect Medical Holdings for $420 million and leased the properties back to Crozer. Taylor’s value in that deal was $70.8 million.
Last February, Medical Properties Trust reduced the estimated value of its Crozer properties by $170 million. In May, the real estate company took an additional $95 million reduction and gave the properties back to Prospect in exchange for a $155 million mortgage that Prospect doesn’t have to make payments on for two years.
When that mortgage took effect in July, the value of Taylor was $46 million, significantly less than the $60.6 million assessment, according to public records.
Meanwhile, state and local officials and the Foundation for Delaware County, which is the legal successor to Crozer’s former nonprofit owner, are pushing for Prospect to sell Crozer to a nonprofit.
If a nonprofit buyer emerges, the new owner could eventually seek a property tax exemption under state law. That would again put Ridley Park officials in the position of needing to turn to residents to make up the difference.