Carmel city council approves rezone for Franciscan hospital after developer commits to permanent taxes 

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The Carmel City Council approved a 6-acre rezoning request Feb. 18 to make way for a specialty hospital and medical offices on the southeast corner of Illinois and 111th streets after developers agreed to make sure the land – and the rest of the campus – is taxable for perpetuity.

Developers initiated the rezoning request in September 2018 to accommodate new corporate and clinical offices for Methodist Sports Medicine and the Franciscan Health Orthopedic Center of Excellence, but the process hit a roadblock when several city councilors said they would not approve the project without a commitment to permanent taxes. Most hospitals in Indiana operate as nonprofits and are exempt from paying property taxes.

The campus includes 12 adjacent acres to the south already zoned for the development. All of the land is owned by Meridian Development Services, a sister company of Methodist Sports Medicine. MDS is a for-profit company and would be required to pay property taxes, but city officials worried it would eventually sell the leased land to Franciscan, which could then file for tax exemption.

Previously, developers said they would commit to paying taxes for 25 years on the southern parcel and were open to extending the timeframe on the northern parcel, since it was the subject of the rezone.

At a Feb. 12 Land Use and Special Studies Committee meeting, however, they reversed course and said they would commit to paying property taxes for perpetuity on both parcels. The commitments also state that future owners of the property must also commit to the tax payments.

“I think the product moving forward is the best for all the parties involved,” said councilor Tony Green, who chairs the committee.

The commitments also state that if the adjacent 31-home Meridian Suburban neighborhood is purchased and used for the project, it also will be subject to permanent property taxes. Developers are in discussions with homeowners to purchase the entire neighborhood.

“In the meantime MDS and MSM have made certain commitments to the city to reduce light pollution, noise and traffic in the area,” MSM CEO Marty Rosenberg said. “We intend on developing the land consistent with the stipulated regulations and requirements placed upon the Meridian Corridor.”   

Some Meridian Suburban residents and city councilors previously said discussions had led to “lowball” offers, but they seem to be pleased with the direction of the latest discussions.

“I think the neighbors are feeling good about the deal. I haven’t heard any reservations,” councilor Kevin Rider said. “The representatives of the neighborhood have been supportive of the deal.”


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