CLARKSVILLE, TN (CLARKSVILLE NOW) – Ascension Saint Thomas’ planned full-service hospital is coming with much more than a hospital, and that was further clarified Wednesday morning with a proposal for tax increment financing (TIF) for their 96-acre health campus.
Ascension Saint Thomas (AST) is planning a groundbreaking ceremony June 16 at the site, recently annexed into the City of Clarksville, on the north side of Highway 76 just past Interstate 24, according to previous reports.
The $148.5 million hospital will anchor the Ascension Clarksville Medical Campus, bringing together physician partners, Tennessee Oncology, Tennessee Orthopaedic Alliance, Ascension Saint Thomas Heart, the inpatient Lifepoint Rehabilitation hospital, and a Montgomery County Emergency Medical Services station. There will also be restaurants and retail on the campus, to support the patients, employees and visitors.
“I think we all can remember about a year ago where the community showed up in droves to support those certificate of need hearings,” said Janet Wilson, EDC vice president of Urban Development, at Wednesday morning’s Clarksville-Montgomery County Industrial Development Board meeting. AST’s development, she said, “represents a transformational health care and economic development project for Montgomery County and the broader region.”
While AST is a faith-based nonprofit, exempt from property tax, most of the campus and its tenants will not be, and therefore will be subject to millions of dollars a year in property tax, Wilson said.
Public projects on medical campus
To make the project happen, AST will build a public connector road from Mulberry Place at the north to Little Hope Church Road at the east. Current plans show the road will not directly connect to the AST campus but to the future EMS station in between. The medical campus will have two road access points on Little Hope Church Road, in addition to primary access from Highway 76 and possible future access at Hawthorn Drive.
AST is also having to build a new “force main” water line. The existing force main is enough for the hospital, but to support the other tenants on the campus, a parallel 8,000-foot line will be needed.
The TIF is being proposed to support those public road and utility projects. TIF is a finance tool used by local governments to fund redevelopment in areas that are unlikely to see private investment without a public subsidy. TIF captures future property tax revenue growth within a defined zone to pay for the upfront costs of public infrastructure and land improvements.
How medical campus TIF will work
AST is asking for $12.28 million in TIF on a 20-year term. Jim Murphy, an attorney with Bradley Law Firm representing AST, said for every $1 in incentives under the plan, $3.44 will come back to the city and county in tax dollars.
Currently, the 96-acre property generates only $3,600 per year in property taxes, going to the county since it was previously outside the city limits. During the 20-year TIF, the city will receive $377,000 per year and the county $1.047 million. Once the TIF expires, the city will receive $909,000 per year and the county $2.073 million.
Murphy pointed out that if the land included only the hospital, there would be no property tax revenue. “If we just did the hospital, the county’s tax would go to zero and the city’s tax would be zero because the hospital would be exempt,” Murphy said. “We want the taxable development to build a campus around us so that all of those specialties – the medical offices for all those subspecialties – would be here in Clarksville right in close proximity to the hospital. That’s good for us and also good for Clarksville residents.”
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As for the total economic impact of the medical campus, AST estimates the following.
One-time impact of construction:
- Construction investment: $418.2 million
- Jobs: 2,821
- Wages: $151.4 million
- Local tax revenue and fees: $6.7 million
Ongoing:
- Annual impact: $316 million
- Jobs: 1,337
- Wages: $68 million per year
- Sales tax: $705,000 per year
- Property tax: $1.4 million per year (during TIF)
What happens next in TIF process
The IDB approved the TIF, which will also have to be approved by the Clarksville City Council and the Montgomery County Commission.
Murphy said AST is working to get approval nailed down so they can market the site to potential tenants. “Having certainty on the infrastructure and how it’s going to be constructed and how it’s going to be funded is critical for that,” he said.
During discussion, the matter of using local contractors came up, and Dylan Finch with the AST team said they chose a general contractor who is committed to working with local companies. “We are aligning our goals to yours to select local communities’ local contractors in support of that.”
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