Prospect Holdings loses Springfield Hospital tax fight

A panel of three Commonwealth Court judges ruled 2-1 against a bid by the owner of Crozer-Keystone Health System to delay when it had to start paying property taxes on Springfield Hospital.

A subsidiary of Prospect Medical Holdings Inc., which bought Crozer-Keystone on July 1, 2016, in a deal valued at $300 million, had initially argued that a 1994 agreement between Springfield Hospital and the township and local school district for an unspecified payment in lieu of taxes for nonhospital buildings should remain in effect, preserving the hospital's property-tax exemption.

When that argument failed, Prospect said it shouldn't have to start paying taxes until Jan. 1, 2017, not when it bought the property, six months earlier. In a decision released Tuesday and reported by The Legal Intelligencer, a panel of three Commonwealth Court judges affirmed a lower-court ruling that Springfield Hospital was taxable on July 1, 2016.

"We disagree with the court's 2-1 ruling that Springfield Hospital's tax status should change effective July 1, 2016," Prospect said in a statement. "The dissenting judge, Anne E. Covey, agrees with our position that the legal doctrine regarding the tax due date is already well established and should have determined this matter."

The 11-acre property, which includes medical office buildings, a sports club, and a parking garage, was valued in 2016 at $13.8 million with a school real estate tax bill of $433,956, the opinion said.

Separately, Prospect on Feb. 5 filed nine tax appeals for properties in Chester, according to Delaware County Court of Common Pleas records.