Ellsworth Town Hall as seen in July 2018.

The next meeting of Ellsworth’s tax appeal board will likely determine whether Maine Coast Memorial Hospital appeals the town’s decision to deny it a tax break because some of its properties are used by for-profit businesses.

Ellsworth’s tax appeal board plans to review its 4-1 vote against the tax break next week.

Maine Coast Medical Realty group — which has federal nonprofit status — handles the real estate holdings of the hospital, another nonprofit.

Last month, the Ellsworth Board of Appeals denied the group’s property tax appeal on four of its buildings.

The board’s reason: Maine Coast has what the board calls for-profit businesses — doctor’s offices — operating within its buildings, according to draft minutes of the July 9 meeting.

The appeals board will discuss its vote and “decide what will happen next,” at its Aug. 13 meeting, City Assessor Larry Gardner said.

The hospital has 60 days to appeal the board’s decision to the state property tax review board, Gardner said.

The realty group sought to avoid paying taxes on $3.2 million of property — specifically four portions of 50 Union St., and property at 107 Church St., 324 Main St., 318 Main St. and 37 Commerce Park, according to appeal paperwork.

The group pays about $55,000 in taxes a year on the property, Gardner said.

Attorney Jonathan Pottle argued on the hospital’s behalf that medical realty and Maine Coast Regional Health Facilities qualified for the tax exemption because they are for public benefit, and are charitable and benevolent, according to the minutes.

Ellsworth officials conceded during the hearing that Maine Coast Medical Realty is recognized by the IRS as tax-exempt under tax codes governing nonprofits. Gardner also agreed that the hospital is exempt by statute.

But attorney William Dale argued on the city’s behalf that under federal law, Maine Coast Medical Realty must use its properties exclusively for nonprofit purposes, yet has several doctors’ offices within the properties in question that are for-profit enterprises.

Maine Coast also can buy, lease or sell condo units and private practices to doctors in the community at a profit, Dale said.

Pottle and board Chairman Jeffrey Toothaker, declined to comment. Toothaker was the sole dissenting vote.

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