East Baton Rouge Parish Metro Council members on Wednesday received a thick tome filled with ideas, examples and laws that might persuade health care providers to build in medically underserved north Baton Rouge.
The more than 300-page volume lists six tools the city-parish could offer health care providers to interest them in building in north Baton Rouge. The area has been devoid of emergency and full hospital care since Baton Rouge General Medical Center’s Mid City emergency room closed in April and the public Earl K. Long Medical Center closed in 2013.
The incentive options include a host of tax abatements for builders and possible tax increases through a variety of possible venues: hospital service districts, enterprise zones, cooperative-endeavor agreements, economic development districts, tax-increment financing districts and community development money.
Metro Councilman John Delgado, who requested the study, said he will send the list of options to local hospitals.
“We send this to Baton Rouge General, to Lane, to the Lake and say, ‘Are you interested?’ ” Delgado said. And if the local hospitals do not bite, Delgado said, he will send the information to hospital systems in other states.
But city-parish Chief Administrative Officer William Daniel warned the council members that the copious pages of ideas might not be enough. “There’s very little way” the city-parish can lure a hospital to build in a certain area without first forming a hospital service district, he said.
Hospital service district designations allow hospitals to build their facilities and purchase some equipment without paying taxes on them. Hospital districts also have the ability to seek property taxes within their districts.
The city-parish’s only hospital service district is Lane Regional Medical Center in Zachary.
Daniel said increased sales taxes from the Louisiana Legislature spell trouble for any city-parish entity trying to levy new property taxes or increase existing property taxes any time soon.
“For any projects that anyone has in mind, that pretty much shuts us down from doing everything,” Daniel said about seeking local property taxes. “Local government has always been subservient to state government.”
Enterprise zones, another idea in the report, are meant to attract developers to build in areas that are economically depressed. Of the materials used to build a project in an enterprise zone, 1.9 percent of the local sales taxes on them can be rebated.
The report says Baton Rouge General is the only hospital in the parish that has participated in an enterprise zone program in the past 10 years. The report shows large swaths of land north of Florida Boulevard that fall under the enterprise zone designation.
Developers can glean the benefits of enterprise zones from both a city and state level. The state can kick in $2,500 in tax credits for each new job created, along with other sales tax rebates.
But the state’s enterprise zones have been the subject of scrutiny for at times giving tax credits worth hundreds of thousands of dollars to businesses building in wealthy areas. In Baton Rouge’s upscale Perkins Rowe development, for example, shops that received enterprise zone tax credits included Anthropologie, Fresh Market and Urban Outfitters.
A third option, cooperative-endeavor agreements, creates partnerships between city-parish or state agencies and private developers for public purposes like safety or health. The city-parish used a cooperative-endeavor agreement to give IBM $4.5 million over three years as part of a package for the company to build its offices downtown.
Cooperative-endeavor agreements also were used when the state privatized the public hospital system.
“So long as the payment made by the city-parish does not exceed the expected economic benefit from the hospital, the expenditure would be allowable,” the report reads.
An economic development district also could be created for a specific health care provider.
Delgado already is trying to create an economic development district for most of north Baton Rouge. Under his plan, developers could pay property taxes at the original value of blighted property for 10 years, rather than the more expensive taxes for the land once they develop it.
Economic development districts can create additional mechanisms for sales taxes, property taxes and hotel occupancy taxes.
They go hand in hand with tax-increment financing, in which developers keep a portion of tax revenues their projects generate. The Metro Council has approved a handful of them for downtown hotels.
Before Costco Wholesale built in Baton Rouge, the council created the Dawnadele Economic Development District, which rebated $7 million of local sales taxes and interest to Costco for its demolition and infrastructure improvement costs.
The final option, community development funds, involves federal monies that go toward building and operating specific programs on the local level. The report says some of the money could go toward helping people with HIV/AIDS. This year, the report says, the city-parish received $5 million in community development funds.