HAGATNA, Guam (AP) — The Guam Economic Development Authority has recommended tax breaks for investors in what will be Guam’s only private hospital.
The authority’s board voted Tuesday to recommend $170 million in tax breaks over 20 years for the private hospital that will be run by The Medical City, which is based in the Philippines. The organization is investing $219 million in the 130-bed, 270,000-square-foot facility scheduled to open by September near the Micronesia Mall in Dededo.
An analysis by the Guam Economic Development Authority indicated Guam will gain $420 million in taxes over 20 years because of hospital business, Pacific Daily News reported (http://bit.ly/1d6XOvm ).
The private hospital has agreed to accept patients regardless of ability to pay, according to the analysis.
The hospital is expected to help fill a recurring shortage of hospital beds. It will offer specialized services such as cancer treatment, cardiology and endocrinology. Guam patients often travel to the Philippines, California or Hawaii for services, according to the authority analysis.
The recommendation for tax breaks will be reviewed by the attorney general’s office. Gov. Eddie Calvo has the final say and has indicated he will approve certain breaks because the private hospital fills a community need.
Approval followed discussion of the hospital’s guaranteed monetary contributions to the community.
The hospital had negotiated a $500,000 annual financial contribution to the government of Guam during the hospital’s first operating year, $750,000 in its second year, and $1 million each year or 10 percent of the tax benefit for the rest of the 20 years.
The Medical City’s Guam regional CEO Margaret Bengzon agreed to an amendment that calls for the hospital to make $1 million annual contributions during the third to fifth years of the hospital being in business, $1.2 million a year during the sixth through 10th years, and $1.4 million a year during the 11th to 20th years of its business on Guam.
Bengzon acknowledged she did not have leverage in negotiating because a decision on tax breaks could have been delayed. The hospital now can focus now on preparing to open, Bengzon said.