Tension brewing between Providence and Lifespan over PILOT payments

Tensions continue to flare between Mayor Brett Smiley and the state’s largest health system over payments in lieu of taxes

The Miriam Hospital in Providence, part of the Lifespan health care network.Jonathan Wiggs/Globe Staff

There’s a public hearing set for tomorrow night on Providence Mayor Brett Smiley’s proposed 20-year, $177 million payments-in-lieu-of-taxes (PILOT) deal with the city’s four private colleges, but tensions continue to flare between the mayor and Lifespan, the state’s largest health system.

During a taping of the Rhode Island Report podcast last week, Smiley once again said he is frustrated that Lifespan, which owns Rhode Island Hospital, Hasbro Children’s Hospital, and The Miriam in Providence, is the only major nonprofit institution that doesn’t have a PILOT agreement in place with the city.

Smiley said he spoke with new Lifespan president and CEO John Fernandez in January, but negotiations aren’t expected to begin in earnest until Oct. 4.

But Kathleen Hart, a spokeswoman for Lifespan, said Smiley’s comments were “not accurate.”

”John Fernandez’s first day at Lifespan was Jan. 30 and his first meeting with Mayor Smiley – a meet-and-greet – was April 12,” Hart wrote in an email. “During that meeting, the mayor briefly mentioned the PILOT but also said he didn’t want to get too deep into that discussion recognizing it was a ‘meet-and-greet.’ We had a subsequent meeting with him on July 26, which was a more substantive discussion where we discussed following up with staff to begin those PILOT discussions.”

Patricia Socarras, a spokeswoman for Smiley, said the city’s perspective hasn’t changed.

”Whether it was two or three meetings— in the same nine months it’s taken to begin negotiations with Lifespan, we were able to get to the finish line with the colleges and universities and propose a nationally competitive deal,” she said. “This is frustrating for the many residents that are going another year paying for the many services Lifespan uses and with no financial contribution in return.”

Lifespan hasn’t made a PILOT payment to the city in two years, according to Hart. She said the organization posted a $76 million operating loss in the 2022 fiscal year.

While the deal with the colleges could win approval from the City Council as soon as next month, there is no end in sight when it comes to the negotiations with Lifespan. The Smiley administration believes that having a deal in place with the other nonprofits – such as Care New England’s hospitals, which include Women & Infants and Butler in Providence – will place added pressure on Lifespan.

This story first appeared in Rhode Map, our free newsletter about Rhode Island that also contains information about local events, links to interesting stories, and more. If you’d like to receive it via email Monday through Friday, you can sign up here.