Providence signs $1.5 million deal with Lifespan for PILOT payments

Lifespan, which owns Rhode Island Hospital as well as Hasbro Children’s and Miriam, has not been paying in lieu of taxes, known as PILOT, since 2021.

Pressure on the hospital group increased last year when private colleges including Brown University, Rhode Island School of Design, Providence College and Johnson & Wales University all agreed to pay the city. More than $200 million in 20 years last September.

When that agreement was signed, Lifespan became the only major nonprofit that did not have an agreement to pay the city.

The other major hospital group, Care New England, which owns Women & Babies and Butler Hospitals, paid $350,000 this year, spokesman Josh Estrella said. There is one more year left until the end of the agreement.

Although the payments are voluntary, large, private nonprofit colleges and hospitals have historically made contributions in recognition of the fact that they occupy large tracts of non-taxable land in the city. The state also reimburses cities and towns for some of the taxes lost by hosting institutions, but the $37 million payment Providence received is less than a third of what the city would receive if universities and hospitals had to pay property taxes.

City finance officials are predicting a $10 million deficit next year.

Smiley and other city leaders had harshly criticized Lifespan. changes its name to Brown University Health In the coming weeks, as he refused to pay for several years in a row. Lifespan last paid the city $400,000 in 2021.

Lifespan, which posted a small profit last year, has previously cited financial pressures, including operating losses due to inability to make payments. The hospital group also said it contributes to society in other ways, including philanthropy, workforce and education programs, and serving patients regardless of their ability to pay their medical bills.

The new agreement also recognizes other contributions to the city and estimates their value at about $50 million annually.

“Like much of the healthcare industry, Lifespan has faced financial challenges over the years,” John Fernandez, Lifespan’s president and CEO, said in a statement. “Our goal is to generate operating income that will allow us to continue investing in our healthcare system, providing top-level healthcare and community benefits to residents and the region, while working in partnership with our host city.”

Smiley said he was “incredibly proud” of the agreement with the universities, as well as the agreement that “enables our tax-exempt institutions to contribute directly to the Providence community.”

“The financial contributions of this agreement will represent Lifespan’s largest annual voluntary payment to Providence in more than a decade and will eventually enable every major tax-exempt institution in Providence to have a formalized PILOT agreement,” he said.

Council President Rachel Miller, who in July called it a “shame” that Lifespan still hadn’t contributed, said Tuesday she was “encouraged” by Lifespan agreeing to a deal that will be presented to the City Council on Thursday and considered in Finance. Committee.

“As the state’s largest hospital system, Lifespan must do its part. “$1.5 million is just the beginning, but there is much more Lifespan must do to truly honor its commitment to Providence taxpayers who currently foot the bill for the city services that Lifespan enjoys,” Miller said.

Steph Machado can be reached at [email protected]. follow him @StephMachado.