Bamboozled Again for a Tax Abatement
Deb McCoy
6/25/2025
The Kansas County Commissioners website states that the “County Commissioners in Kansas have the responsibility of approving property tax exemptions for economic development purposes.” Does anyone recall a discussion taking place in a commissioner meeting when Legacy Healthcare Inc. applied for a tax abatement on March 11th, 2024 for the“old Mercy Hospital building”? The answer is NO. Why would anyone assume that the building could be tax exempt, when there has been no hospital facility in place since Mercy Hospital closed in 2018.
The application completed by Legacy Healthcare Inc. that was submitted to the Bourbon County Appraiser listed the KSA 79-201b statute that would authorize the exemption: “Property exempt from taxation; hospitals, public hospital authority, adult care homes, children’s homes, group housing of certain handicapped persons, housing for elder persons and single-parent families. The following described property, to the extent herein specified, shall be and is hereby exempt from all property or ad valorem taxes levied under the laws of the state of Kansas.” Under KSA 79-201b First. “All real property and tangible personal property, actually and regularly used exclusively for hospital purposes by a hospital as the same is defined by KSA 65-425.” KSA 65-452 defines hospitals and other facilities as used in this act. 65-452 (a) “General Hospital” means an establishment with an organized medical staff of physicians; with permanent facilities that include inpatient beds; and with medical services, including physicians services, and continuous registered professional nursing service for not less than 24 hours of every, to provide diagnosis and treatment for patients who have a variety of medical conditions.”
Legacy Healthcare Foundation has never housed a hospital setting in the “old Mercy Hospital” even though part of the Donation Agreement that was signed on November 17th, 2022, states that they would “include development of an Acute Care Hospital and Ancillary Services.” If this was Legacy Healthcare Foundations intentions then why was the Acute Care Hospital and Ancillary Services not initiated and an application not completed upon receipt of the “old Mercy Hospital Building” in November of 2022?
On September 12, 2024 The Board of Tax Appeal State of Kansas in the matter of the application of Legacy Healthcare Foundation for exemption from Ad Valorem Taxation in Bourbon County Kansas was granted exemption of the “old Mercy Hospital building.” According to the Board of Tax Appeals Docket No. 2024-1192-TX Order the application for exemption from ad valorem taxation is granted from November 17, 2022, and each succeeding year, so long as the property continues to be used for exempt purposes. In the event the exempt property ceases to be used for exempt purposes, the applicant must report that fact to the Bourbon County Appraiser within 30 days. So the abatement was given on a building that does not house a hospital setting. The order also stated that Any party who is aggrieved by this order may file a written petition for reconsideration with this Board as provided in KSA 77-529 within 30 days from the date of certification of this order. We as a community would not have known that this request for a tax exemption of the hospital no hospital building was even being pursued. The 2023 and 2024 property taxes that were deeded to Legacy Healthcare Inc. in the donation agreement have not been paid, which included their property taxes on the old hospital building and on the land that surrounds the old hospital building, and the three lots that Legacy divided that includes 0 S. Horton, O Hwy 69, and 0 Woodland Hills. The old hospital building taxes as of 2024 that were abated was around $400 thousand.
It was recently discovered that Legacy Healthcare Foundation, a California Non-profit corporation created a Warranty Deed on November 4th, 2024. This Kansas Entity Special Warranty Deed made and entered into this 14th day of July, 2024, by and between Legacy Healthcare Foundation, a California non-profit corporation as Grantor, and Kansas RE Investment Group LLLP, (a Georgia Domestic LLLP) as Grantee, whose mailing address is 401 Woodland Hills Blvd, Fort Scott, Kansas 66701. Witnesseth, that the Grantor, for and in consideration of the sum of One Dollar and other good and valuable consideration paid by the Grantee, the receipt and sufficiency of which is hereby acknowledged by Grantor does by these presents Grant, Bargain, Sell and Convey unto the Grantee,the following described Real Estate situated in the County of Bourbon, State of Kansas, to wit:
Lots 1 & 2, MERCY HEALTH SYSTEMS OF KANSAS TO THE CITY OF FORT SCOTT, BOURBON COUNTY, KANSAS
It was discovered that Legacy still holds the mortgage and they assigned the mortgage to Pasadena Private Lending, INC. formed in Delaware. Filed with the State of California Office of the Secretary of State on January 30th, 2024 “STATEMENT AND DESIGNATION-OUT OF STATE STOCK CORPORATION.” Agent Craig Colbath, 2 North Lake, Suite 510, Pasadena,CA. 91101
What burden of expenses has our County Commissioners and Attorney, Bourbon County REDI, and Legacy imposed upon the Bourbon County taxpayers using Bourbon County/State and Federal Funds? Decision after decision has been made regarding the need for a hospital. The amount of time and money and effort in coming up with a solution seems to always fall back on the taxpayers of our community. When you add up the monetary figures that have gone into the Legacy Healthcare Foundation and its failure to provide an Acute Care Hospital per the Donation Agreement the total figure is staggering.
Feasibility Study $1 million dollars (City 200k & County $800K)
Mercy Hospital assets assessment of the building $19.6 million dollars
$2 million dollars
($1 million dollars from citizens donations)
($1 million dollars donation from a foundation.)
Mercy monetary donation of $600 thousand
______________________________
Grand Total – 23.2 million dollars
Bourbon County REDI
(established on August 9, 2021)
Expenditures reports from the City and County for the years of 2021 thru 2024
Was given $855,017.68
County ¼ cent sales Tax effective October 1, 2024 to help “attract” Emergency
Services by funding approximately $750,000 thousand dollars annually over the next 5 years.
Estimate total $3,750,000.00
Taxes on the Mercy/Legacy No Hospital Building
2024 showed that no taxes have been paid on any of the donated“Real Property” for 2023-2024
Balance $409,828.23
Application of Tax Abatement submitted on March 11, 2024 by Legacy for years at issue 2022
A Tax Abatement request was granted by the Board of Tax Appeals State of Kansas on September 9th, 2024.
Eliminating $354,131.35 dollars off of our existing tax records for the next 10 years.
Estimated Total $1,805,131.90
(May I remind you that the 2025 budgets are already in place and the County, City, School Districts, and Fort Scott Community College.will be affected.)
Total of all figures above $30,019,977.81
This does not include the legal funds and ancillary funds surrounding the process.
AND STILL NO HOSPITAL
What an important, well-documented “sore topic” reminder! Thank you, Deb McCoy! Now, what can you or anyone else suggest to remedy this situation?
Thanks for sharing!
I cannot and will not defend the actions of past commissions, as I resigned in protest from the REDI board over the county and city’s blind support of Legacy and the arena project. However, Rick Masters raises the important question: What now? It is easy to armchair quarterback past commissions and volunteer boards, but they are all gone and we have to move forward. Freeman is an outstanding organization and they are on track to open September 1. Let’s turn our attention to supporting them. If the tax exemption is overturned, we risk losing Freeman and the county will own the building with enormous daily operating costs and will have little choice but to raze it. Let’s go forward and support Freeman.
So if it can’t be completed legally, we should just go with it and look the other way? NO, the legal owners were accepting rent in the property, carved out the land they determined might have we, and should pay their taxes owed.
“No legacy is so rich as honesty.” Wm. Shakespeare
Enjoy your ambulance rides to Pittsburg, Nevada, Girard or Iola.
Thank you Deb for compiling and explaining all this craziness. I lost count of how much has been spent on the hospital since Mercy left. There are expenditures that I sure didn’t know about, so I assume I’m not the only one. I felt early on that we were spending money that we really didn’t have, so now we know it was more than a couple of million. My goodness, I can’t believe it. Our taxes are extremely high anyway, let’s hope they don’t need another feasibility study.
Thank you again, I appreciate the information.