NORTH SMITHFIELD – A three-year dispute over the town’s right to tax a rehabilitation hospital has yet to be settled, with five suits pending in state Superior Court and nearly $800,000 of municipal revenue hanging in the balance.

Prime Healthcare Services lobbied its first Superior Court suit against the town of North Smithfield in 2018, challenging a roughly $250,000 tax bill on its holdings including the Rehabilitation Hospital of Rhode Island, and surrounding lots related to its operations.

Prime, the parent company of the rehabilitation hospital and its sister facility in Woonsocket, Landmark Medical Center, contends that as a non-profit entity, it is not liable for the assessment, and was taxed illegally.

The town also sent Prime tax bills in 2019 and 2020, despite appeals for exemptions, and ongoing litigation now leaves all three years in dispute.

Solicitor David Igliozzi updated Town Councilors on the lawsuits in executive session this week, and NRI NOW obtained documents filed in Superior Court last year detailing the claims.

According to a Statement of Fact signed by both parties in the ongoing suits, the litigation involves five lots on Eddie Dowling Highway, including four owned by Prime Healthcare Services and one leased from an entity known as, “HC 116 Eddie Dowling Highway, LLC,” in town tax records.

Prime filed for, and received, non-profit status in 2017, and much of the legal discussion that year was relative to when the change took effect, with town officials noting that the party responsible for the parcels was a for-profit entity at the time of the 2018 assessment.

Real estate and tangible property taxes on Prime totaled $264,279 in 2018, according to court records.

In 2019, the town charged Prime $256,645 in taxes, and in 2020, the cost was $268,285, bills paid by the plaintiff even as the lawsuits remain unsettled, according to court documents.

The hospital, represented by Mark Pogue of Pierce Atwood, LLP, has challenged all three years for a cumulative total of $789,206.

“As a proximate result of the town’s illegal imposition of taxes on the hospital,” Prime, Pogue states has been damaged, “in an amount to be determined at trial.”

The town, represented by Providence-based attorney Anthony Cottone, meanwhile, contends that Prime does not qualify for exemption.

A statement signed by both parties in September of 2020 states that Prime has exhausted all possible administrative remedies.

Igliozzi said he could not comment on the ongoing litigation, but confirmed that the suits pertain to all three tax years.

Future taxes of the facility, an 82-bed rehabilitation center valued at around $12 million, seem unlikely to land in court. Last June, Prime announced plans to return to its for-profit status thanks to a joint venture with a Kentucky-based company known as Kindred Healthcare.

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