By Susan L. Serbin

Times Correspondent

SPRINGFIELD >> The school board and district will continue to try to collect nearly a half million dollars of outstanding taxes and associated charges. The board approved authorization to prosecute a collections lawsuit involving the property known as Springfield Hospital, now owned by Prospect Crozer LLC.

“With any matter concerning a law suit there is no public comment. We have provided information to the board members,” said solicitor Lisanne Mikula.

Similarly, the attorney representing Prospect Crozer also had no comments on pending litigation.

However, court documents on several phases of the matter were available as public record. The current action was a complaint filed with the Delaware County Common Pleas Court stating defendant Prospect Crozer owes the district delinquent school real estate taxes of $477,351 for the 2016-2017 school tax year. The complexities of the case began nearly 26 years ago.

Springfield Hospital operated as a non-profit entity and was tax exempt. Expansion of the campus in the 1990s included medical offices, the fitness center (known as the Healthplex) and a parking facility, all for-profit. The hospital and district reached an agreement whereby the hospital paid a $25,000 PILOT (payment in lieu of taxes).

When the for-profit parts began operations, and assumed the tax burden, the hospital was relieved of the PILOT so long as it continued as a non-profit organization. That ceased to be the case with the purchase by Prospect Crozer LLC, part of Prospect Medical Holdings Inc., a health care service corporation headquartered in Los Angeles. The sale and transference to Prospect was in effect for the 2016-2017 school (fiscal) year which begins July 1, and not as a calendar year. While Prospect has paid its taxes for the 2017-2018 school year, it has not satisfied the initial tax bill.

The district’s first case in Common Pleas Court resulted in a December 2016 decision to enforce the 1994 PILOT agreement, making the taxes due. It also directed the Tax Assessment Office to update the property’s status to taxable. Prospect filed an appeal to Commonwealth Court in which Prospect argued the facility still operated as a hospital and it did not matter that Prospect is a for-profit entity.

Court documents also said Prospect’s “alternative” argument was that the taxable status could not be instituted until the next fiscal year following the change, therefore Jan. 1, 2017, which is counter to school districts’ routine operations.

Prospect further appealed to the Pennsylvania Supreme Court which, as of Aug. 22 declined to hear the case.

As stated in the complaint, the district’s action is for collection of delinquent taxes of the $477,351, a 10 percent penalty, interest (to be determined) and cost of the suit.

The district is now awaiting Prospect’s response to the complaint, and/or any subsequent matters before the court.

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