Because Community Medical Center came off tax-exempt status on Jan. 15, when the nonprofit hospital was sold to a for-profit partnership between Billings Clinic and RegionalCare Hospital Partners, a sizable but undetermined amount of tax money will eventually flow into Missoula city and county coffers.
The property will have to be appraised by the Montana Department of Revenue, and the first step in that process will be a site visit sometime in the next few weeks, according to Cynthia Moore, the state's property assessment and tax division administrator.
“The first step is to basically do a site visit,” she said. “It’s been exempt for so many years. We have to go out there and essentially look at all the buildings inside and out, take measurements, take pictures and so forth. That’s going to have to happen first. Once all the information is gathered, we’ll go about looking at property values, and we will be sending out assessment notices later this summer.”
Moore said nobody from her office has visited the hospital yet, but they will be setting up an appointment soon.
Helen Greenberg, an appraiser who works for the state, said the value of Community will probably be determined using a "cost" approach, as opposed to an income or a sales comparison approach.
“Obviously we don’t have comparable sales,” she said. “It will probably be a cost approach.”
The cost approach is basically how much it would take to completely rebuild or replace a property using current designs, construction methods and materials. The same process is often used for newly constructed commercial real estate.
Greenberg said the appraisal process will require an “extensive” on-site review because Community has been a nonprofit for so many decades.
When Community Medical Center does begin paying taxes, they will go to both the city and county of Missoula, as well as to Target Range School District.
Moore said Community will pay a pro-rated amount for 2015, since the hospital was a nonprofit for the first 15 days of the taxable year.
She said she couldn’t even begin to give a ballpark estimate of how much property tax the hospital will pay.
In 2014, the total taxable value of the property owned by St. Patrick Hospital on the two city blocks between East Broadway and Spruce Street was about $43.7 million.
That number doesn’t have anything to do with Community’s potential taxable value, but it gives an idea of what a modern medical facility is deemed to be worth by the state.
“We haven’t had a chance to get out there yet, but we will,” Moore said. “Once we take all the measurements, then it will basically culminate in an appraisal.”