Saint Francis Hospital is losing a year’s worth of local property tax breaks because it hasn’t produced the new jobs it promised with the expansion of its emergency department.
A Memphis and Shelby County Industrial Development Board’s Performance and Reviewmittee also voted Tuesday to rmend taking two years of tax breaks from a fledgling biofuel producer that has not created the jobs it pledged.
The IDB had granted Saint Francis Hospital an eight-year tax PILOT in 2007 contingent on it adding 46 jobs with a $10.4 million, 5,000-square-foot expansion of its emergency room.
The tax break was saving the hospital at 5959 Park in East Memphis $120,000 a year.
The hospital met itsmitment for the average salaries ($55,676) and capital investment ($10.4 million), but actually had reduced its staff by 300, from 2,186 to 1,886.
Saint Francis Chief Financial Officer Bradley Robertson blamed the recession, but also told themittee that a number of jobs subtracted from the payroll still exist. They were spun off to otherpanies.
For example, he said, the skilled nursing home care that the hospital once provided still takes place on campus, but now under thepany Signature HealthCARE at Saint Francis.
Themittee also agreed to rmend a request by Saint Francis that its PILOT be “parked” or held in abeyance for this year, 2012 and 2013. The hospital will pay full property taxes during those years.
The deferral “gives us an opportunity to see how the recession plays out,” Robertson said.
Hospital executives have said the recession has caused potential patients to put off elective surgery and also cut back on obstetric and psychiatric care.
The hospital planned the expansion and renovation in 2005, forecasting it could amodate 2,000-4,000 more patients yearly.
But the average daily inpatient census fell from 328 in 2007, to 326 in 2008, to 290 in 2009 and was averaging 264 patients a day through most of 2010.
In other action, themittee clawed back two of the eight PILOT years that had been awarded to Memphis BioFuels, now called BioEnergy Development Group.
It operates in the old plant at 2227 Deadrick near the southwest corner of Lamar and Airways. Procter & Gamble originally used the facility to purify vegetable oil byproducts.
BioEnergy will crush seeds to make diesel fuel that’s easier on the environment.
Ken Arnold and his partners purchased the defunct Memphis BioFuels at a foreclosure auction last July after an equity partner pulled out.
The IDB had granted Memphis BioFuels an eight-year PILOT based onmitments it would create 33 jobs, paying $28,600 in average wages and investing $11.7 million in capital.
By Dec. 31, thepany created 20 jobs paying $29,182 on average and had invested $12.2 million.
Arnold said BioEnergy Development now has 29 employees and has invested an additional $4 million.
By year’s end the plant should be in full production and employing about 40 people, he said.
The six-year PILOT will expire in 2013.
Memphis BioFuels opened in December 2006 with anticipation of bing one of the largest biodiesel plants in the nation. But the industry suffered as oil prices rose, raising production costs, and the recession made it hard to raise capital.
In other action, the Performance & Reviewmittee voted to rmend eliminating payments in lieu of taxes for apany that didn’t meet itsmitments and has ceased operations, Knox St. Clair Millwork Distributors at 1700 S. Third.
— Tom Bailey Jr.: (901) 529-2388
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