PROVIDENCE CITY LEADERS are frustrated with how long it’s taking to reach a payment-in-lieu-of-taxes agreement with Lifespan Corp., but the health system says it’s open to reaching an agreement. / COURTESY LIFESPAN CORP.
PROVIDENCE – City leaders are frustrated with how long it’s taking to reach a payment-in-lieu-of-taxes, or PILOT, agreement with Lifespan Corp., but the health system says it’s open to reaching an agreement.
PILOT agreements are deals that large nonprofits – which are exempt from paying taxes – make with cities to help offset their reliance on city resources and lack of tax revenue.
Providence reached new PILOT agreements last year with several colleges and universities, including $223.5 million in direct payments to the city over 20 years from Brown University, Providence College, Rhode Island School of Design and Johnson & Wales University.
Care New England Health System also has an existing PILOT agreement that will expire in 2026 that includes annual payments between $375,000 and $400,000.
Lifespan, the state’s largest health system and employer, was not part of the agreement. But leaders from Lifespan and the city met in October 2023 to discuss a PILOT agreement.
Since then, few details have surfaced about what the agreement could look like.
At the last City Council meeting on July 18, councilors received an update on the talks with Lifespan from Mayor Brett P. Smiley in a closed-door session. No votes were taken and council members expressed their disappointment in the lack of progress.
“In nearby cities, hospitals contribute to ensuring the vibrancies of their local communities, but thus far, Lifespan has been unwilling to do the same. As the state’s largest hospital system, this is shameful,” Council President Rachel Miller said. “These funds are necessary for us to have a sustainable and supportive relationship long term and to lessen the burden on home and business owners, who right now foot the bill for the city services Lifespan benefits from. I’m hopeful for a deal where Lifespan pays its fair share. After all, the future of our hospitals and our city are intertwined.”
Before the meeting, Smiley spokesperson Josh Estrella said negotiations with Lifespan are ongoing and “will continue until we reach a deal that is responsible and fair for the taxpayers of Providence.”
While the negotiations with the city have been ongoing, Lifespan reached new affiliation agreements with Brown University to rebrand as Brown University Health. The agreement also includes Lifespan and Brown investing millions to each other.
According to a WPRI-TV CBS 12 report, Smiley said Lifespan’s new affiliation with Brown doesn’t mean the health system has more money to give the city.
Kathleen Hart, a spokesperson for Lifespan, said before the July 18 council meeting that the health system is still interested in reaching a deal.
“Lifespan has a vested interest in supporting our host city and we very much hope to enter into an executed agreement soon for the benefit of the city and its residents,” Hart said.
Katie Castellani is a PBN staff writer. You may contact her at castellani@pbn.com.