Sarpy County has settled a property valuation dispute with the Bellevue Medical Center, a compromise that will shave more than one-third off the hospital’s tax bills for 2012 and 2013.
The settlement agreement, approved this month by the Sarpy County Board, will end a lawsuit the hospital filed in April, as well as a pending appeal with the state Tax Equalization and Review Commission.
The dispute stems from confusion about the hospital’s ownership and a mistake by Sarpy County Assessor Dan Pittman in tracking the hospital’s tax status.
Bellevue Medical Center, located at 25th Street and Highway 370, was tax-exempt from the time it opened in 2010. Following a change in ownership — a for-profit doctor’s group gained a stake in the business — it didn’t submit exemption paperwork for the 2012 tax year.
But Pittman’s office failed to change its tax code in the county assessment system.
Pittman caught the mistake and sent out a late assessment notice in August, valuing the parcels at $80 million — for a tax bill of $1.6 million for each year.
Bellevue Medical Center maintained it owed nothing because Pittman missed the deadline to value the property. Pittman, for his part, called the mistake a “clerical error,” one of a handful of exceptions in state law that allow an assessor to issue a late valuation.
The hospital disputed this interpretation. After the County Board rejected the hospital’s assessment protest, it appealed to the state review commission and filed suit.
The settlement agreement approved this month does not include a $7.5 million office building — the doctor’s clinic that triggered the exemption change.
But it sets the total valuation of the other six parcels at $38.5 million for 2012 and 2013. Pittman estimated the tax bill from the lowered valuation would be $804,000 for 2012 and $810,000 for 2013, plus taxes owed on the clinic.
The county opted to settle rather than risk an adverse ruling, Deputy County Attorney Mike Smith said.
“We weren’t sure which way the case would go,” he said. “Rather than take the risk of getting nothing, we’ll get something.”
It’s unclear how the hospital will be assessed in the future. Pittman said the hospital has not submitted an exemption application for 2014, so he will continue to assess it as in the past.
“We’re going to have these values back up at $70 million, because we don’t see anything different,” he said.
Bellevue Medical Center spokesman Taylor Wilson said the hospital would not comment until the settlement is made final.