The for-profit company that recently purchased Eastern Connecticut Health Network still hopes it can broker a tax abatement deal with the town of Vernon, even though the sale has been completed.
Talks are ongoing, officials on both sides of the table say, but no deal is imminent.
Prospect Medical Holdings Inc. last month purchased nonprofit ECHN, including Rockville General and Manchester Memorial hospitals, for $105 million in cash, with the promise to spend another $75 million on capital projects over the next five years.
In a separate deal Prospect bought the Greater Waterbury Health Network, including Waterbury Hospital, for $100 million with $55 million promised for capital projects there.
The California-based company was able to negotiate a tax break with Manchester and Waterbury before the Oct. 1 closing date. But Vernon’s Town Council remains on the fence.
On Sept. 20 the council withdrew an agenda item at the 11th hour that would have considered a property tax assessment freeze agreement between the town and Prospect. At the time, Vernon Mayor Daniel Champagne would say only that there was no deal.
Still, Prospect officials are optimistic, saying last week, “We remain hopeful of reaching a tax stabilization agreement with the city of Vernon, and will continue to negotiate in good faith with city officials.”
The abatement would affect tax assessments of 31 Union St., the site of the 118-bed Rockville General facility, and all its equipment.
The Town Council has yet to publicly discuss the controversial takeover of ECHN, or any specifics for a proposed tax deal.
But Champagne has been on the record as saying he wants assurances from Prospect that Rockville General would remain open and operational for the same duration of time that any tax abatement is in place.
Many Vernon residents are concerned that Prospect eventually would close Rockville Hospital. In approving the sale, state regulators in June imposed a condition that Prospect keep the hospital open and operational for at least three years.
Prospect has asked Vernon for tax abatements similar to what it received from Manchester and Waterbury. Both of those municipalities approved deals that require Prospect to pay at least what the state contributes now in PILOT funds, or payment in lieu of taxes, for at least three years.
In Manchester, Prospect is expected to save just under $2 million annually thanks to a tax abatement in each of the next three years. The town will receive $830,000 in each of the three years in taxes, and Prospect is required to spend at least $10 million on the Manchester Memorial Hospital campus within that timeframe.
Besides its newly acquired Connecticut holdings, Prospect owns 18 hospitals in four other states, including Pennsylvania, New Jersey, Rhode Island, and Texas, with its main base of operations in Los Angeles.
Journal Inquirer reporter Zachary Vasile contributed to this story.
