Some critics say it appears Atrium Health is double dipping on tax refunds. Under North Carolina law, nonprofits like Atrium are limited to $45 million in sales tax refunds each year. But the hospital system may have used a legal loophole to get an even bigger refund. The Charlotte Ledger Business Newsletter and NC Health News wrote about it this week, and the Ledger’s Tony Mecia joins me now for our segment BizWorthy.
Marshall Terry: So what is this loophole that Atrium may have used? And just how much tax refund could it have received?
Tony Mecia: Here's how it works: When a nonprofit buys something, it pays sales taxes just like you and me. But then, it's able to request a refund of those taxes up to $45 million, as you mentioned.
Now, Atrium has hit that cap in the last couple of years. Now, you might recall, that a few years ago, Atrium combined with Wake Forest Baptist — they're teaming up, they're building a medical campus in the Midtown-Dilworth area of Charlotte. And so, for some purposes, they're combined and they're a single enterprise.
But for other purposes — including the cap on sales tax refunds — they're separate legal entities. Now, the Republican state senator who helped push through the bill with the cap on refunds, says that that was not the intent. And several Democratic County commissioners say that the county could really use that sales tax money for things like parks or affordable housing. Democratic County Commissioner Laura Meier told us that she thinks that Atrium is "double dipping" by putting in multiple refund requests.
So, we don't know the exact amount that Atrium and its affiliated entities are saving through this — because that information is not publicly available. But it doesn't seem like too much of a stretch to imagine that if Atrium were subject to a single cap on rebates instead of multiple caps, it would be paying millions of dollars more.
Terry: What's Atrium's response been to this?
Mecia: Well, Atrium didn't provide a lot of specifics. But it did say generally it files for tax refunds with separate legal entities, which is legal. And it also pointed out that it invests nearly $3 billion a year in free and discounted care for low-income patients and other things that benefit the community.
Terry: All right. Well, let's switch over to development now. The Ledger recently took a tour of what's become something of a rarity in Charlotte: a new office tower. Which one?
Mecia: Yes. I took a tour last week of the fourth phase of the Legacy Union project uptown — a building called 6Hundred, at 600 S. Tryon St., at the corner of Brooklyn Village Avenue — the former Stonewall Street.
It's a 24-story office building. It just opened in the last couple of weeks. It's really a modern office building. And I can tell you as someone who used to work on that site with The Charlotte Observer back when it was The Observer building, it's a lot better.
They've got beer and cold brew coffee on tap. They've got terraces with fire pits. There are coworking spaces, high-tech conference rooms. The ninth floor is an amenity floor with a large fitness center.
And get this, Marshall, it even has an outdoor pickleball court that's lit, so you can play pickleball at night, and it overlooks Bank of America Stadium. Now this is the last office tower that's going to be completed for the next few years — except for the medical office that's going in the medical innovation district — because really there haven't been very many office towers built. Because of the changes with remote and hybrid work, this is sort of a little bit of a last gasp for the next few years, I think.
Terry: Sticking with development for a moment in Matthews this week, leaders approved plans for a Discovery Place Kids Museum. When would it open, and where's the money to build it coming from?
Mecia: It'd be about 18,000 to 24,000 square feet, scheduled to open in 2029. They say it'll be near downtown. This will be very similar to Discovery Place Kids Museums that exist in Huntersville and Rockingham. And the money is coming from the town of Matthews to build the building, cost about $4 million to $6 million. And then Discovery Place would run the museum.
Support for BizWorthy comes from the law office of Robertson and Associates.
