Mayo Clinic sues City of Eau Claire over property taxes

(WQOW) – The City of Eau Claire is facing legal action from Mayo Clinic over their property taxes.

Mayo Clinic Health System-Northwest Wisconsin Region is suing the city for over $1 million in real estate taxes and $48,896.31 in personal property taxes. According to Mayo’s complaint, since they’re a nonprofit organization under state law the assessed taxes are unlawful. This is the first time Mayo Clinic has taken legal action against the city.

Mayo argues they should not be taxed on seven of their Eau Claire properties, some of which are parking lots. In their claim, they say the main campus is used “exclusively for the purposes of a hospital that is devoted primarily to the diagnosis, treatment or care of the sick, injured or disabled.”

The only portion they concede is the approximately 255-square feet leased by The Goat Coffee House.

As for the parking lot addresses, they said it’s a “reasonable necessity to the efficient functioning of the hospital as an organization,” additionally claiming that it doesn’t qualify as a doctor’s office and isn’t used for commercial purposes.

However, according to city attorney Stephen Nick, exemption only applies to the hospital portions, not office or commercial space.

“Nonprofit hospitals are exempt from property tax by state law, but clinical or medical office buildings and related uses are not,” Nick said. “Mayo-Eau Claire has a hospital facility but also considerable doctor’s offices or medical clinic uses.”

Nick said Mayo received a proper partial exemption this year and in previous years.

The City of Eau Claire hasn’t been served with the lawsuit according to Nick, he said “it is disappointing Mayo would elect to take this step without a prior discussion with the City.”

Mayo Clinic sent News 18 a statement saying: 

“Mayo Clinic Health System is committed to providing the best care for our patients. In upholding our value of stewardship, we emphasize sustainability so that we can continue supporting and investing in our staff as well as patient care, research and education. Early last year, it was determined that Mayo Clinic Health System had been paying taxes inconsistent with Section 70.11 of the Wisconsin Statutes, which provides an exemption from property taxes for nonprofit hospitals and outpatient departments used for the primary purposes of the hospital. As a result, a lawsuit claiming improper taxation has been filed in Eau Claire. Mayo Clinic Health System remains committed to resolving this issue.”