The managers of a Rossville medical clinic are facing a rent hike of about 13.6 million percent.
For at least a decade, the nonprofit Primary Healthcare Centers has operated out of a building owned by Walker County for $1 a year. But County Commissioner Shannon Whitfield, who took office in January, says a recent appraisal puts the value of the building and land on Suggs Street at $1.1 million. He believes the county should rake in more money off the rent.
What's more, the county previously agreed to pay the building's electric, gas, water and sewer bills, plus any needed fixes on the HVAC system. All told, Whitfield said, those added expenses cost the county $30,000 a year.
His proposal? Charge Primary Healthcare Centers $8,800 a month to rent the space, and make it pay its own utility bills. Under this proposal, the annual rent would come out to $105,600. Add in what Whitfield said the other bills cost, and Primary Healthcare Centers would need to pay about $135,600 every year.
He also offered to sell the building to the nonprofit organization.
"Primary Healthcare does provide a medical service to the community," he said. "But my job description, as a commissioner, is not Obamacare, TennCare or PeachCare. It is to manage the county and to make sure the assets of the county are being best utilized."
Primary Healthcare Centers community liaison Sandy Matheson declined to comment on whether the group will shut down or move the Rossville operation.
"We are working to negotiate a new lease with Commissioner Whitfield," she wrote in an email. "At this time we have no further statement."
Whitfield said the nonprofit's board of directors meets the last week of every month, and he hopes to hear an answer from CEO Diana Allen at the beginning of December.
He also plans to increase the rent for Primary Healthcare Center's administrative office, located on South Duke Street in LaFayette. The organization rents a two-story building from the county for $1,000 a month. Whitfield said a recent appraisal put the value of the building at $250,000, with a suggested monthly rent of $3,200-$4,200.
He said he began looking into the issue in February, when he noticed the county owed a $2,000 electric bill for the Rossville clinic. After reviewing the lease, he met with Allen in May, telling her he was going to increase the organization's rent. Based on the value of the property and the cost of utilities, Whitfield said previous Commissioner Bebe Heiskell probably cost the county $1 million over 10 years on the clinic.
"That building needs to be sold or needs to be producing revenue," he said. "It simply comes down to the numbers."
Whitfield's appraisals on the two properties are much higher than the listed values on the county's Board of Assessors' website. The board lists the Rossville clinic's value this year at $330,000 — less than one-third of what Whitfield said the building is worth.
The board values the corporate office on South Duke Street at $150,000. That is about two-thirds cheaper than what Whitfield said the land is worth.
County spokesman Joe Legge said the property appraisers have not valued those lands for years. The local government owns those buildings, and as a result the county doesn't get any tax revenue from the land, no matter the value.
In addition to the Rossville location, Primary Healthcare Centers operates clinics in Cedartown, Summerville, Trenton, at Tiger Creek Elementary School in Tunnel Hill and Gilbert Elementary School in LaFayette. In 2015, according to a tax filing available online, the nonprofit organization took in about $6.5 million in revenue and spent about $6.2 million.
Most of the revenue came from $3.3 million in grants and $2.7 million in patient services. Most of the expenses were for staff salaries and benefits, as well as medical supplies.
Eddie Upshaw, a former board member, said he has tried to help Whitfield and the nonprofit's leaders negotiate the lease. He said Whitfield asked for $10,000 a month earlier this year but since has lowered his request by about 12 percent. He thinks the commissioner should start with a lower rent and gradually increase the cost.
"They could probably pay [the requested rent]," he said. "But this is a shock to them. I don't think he needs to hit them hard at first. He's trying to make a point."
Contact staff writer Tyler Jett at 423-757-6476 or firstname.lastname@example.org. Follow him on Twitter @LetsJett.