Connecticut and Prospect Medical Clash Over Tax Debt

Connecticut’s healthcare scene feels like it’s teetering on a knife’s edge right now. State officials are deep in tense negotiations with Medical Properties Trust (MPT), the bankrupt operator Prospect Medical Holdings, and there are millions in unpaid state and municipal taxes hanging over it all.

These talks are a big deal for UConn Health’s ambitious plan to buy Waterbury Hospital. The plan stretches out to Bristol and Day Kimball Hospital in Putnam too.

Find Your Ideal Getaway in Connecticut
Explore top-rated stays with no booking fees and instant confirmation. Your dream trip starts here!
Start Exploring Now

What happens next could decide who owns these hospitals and who’s stuck with Prospect’s ugly tax mess. Leaders in Hartford and all over Connecticut are watching closely—understandably so.

UConn Health’s Expansion Strategy

UConn Health says it wants to boost healthcare access by snapping up and upgrading several hospitals. Their bid for Waterbury Hospital—up to $13 million—is the centerpiece of the whole push.

They’re also eyeing investments in Bristol and Day Kimball Hospital. These places serve important swaths of Connecticut, and lawmakers see them as anchors in their regions.

Tax Forgiveness as a Negotiating Tool

Tax forgiveness is on the table as part of the Waterbury deal. UConn Health hopes this will help close the sale and keep the hospital running, without dragging in all of Prospect’s financial baggage.

But the idea of forgiving taxes isn’t sitting well with everyone at the Capitol. Some legislators worry it could set a dangerous example for future deals.

The Bankruptcy Battle

Prospect Medical Holdings filed for bankruptcy back in January. That move put its hospital sales under the watch of a Texas bankruptcy court.

Medical Properties Trust (MPT), acting as Prospect’s landlord, has a lot of influence in how this all shakes out.

The 2019 Property Deal and Ongoing Rent Burdens

Back in 2019, MPT bought up Prospect’s hospital properties in several states for $1.4 billion. That deal sent a $457 million dividend to investors.

Shareholders did well, but it left Connecticut hospitals with steep rent bills. Towns like Waterbury, Bristol, and Norwich have been feeling the pinch ever since.

Unpaid Taxes and Municipal Impact

Connecticut’s Department of Revenue Services has filed liens showing Prospect owes $67 million in unpaid state taxes. Attorney General William Tong thinks the real number could top $100 million.

On the local side, Prospect and MPT together owe over $23 million in property taxes to towns including:

Waterbury
Bristol
Putnam
Norwich
Manchester
New Britain
Meriden
New London

For these towns, the unpaid taxes mean tighter budgets. That often leads to tough calls about funding schools, public safety, and other basics.

Political Divisions in Hartford

State leaders can’t seem to agree on whether forgiving Prospect’s tax debt is the right move. House Speaker Matt Ritter says it might be needed to keep hospitals open and save healthcare jobs.

Minority Leader Vincent Candelora doesn’t buy it—he sees a bailout with no strings attached.

Funding the Healthcare Future

The state is getting ready to borrow $390 million for UConn Health’s expansion and to upgrade places like Waterbury Hospital. Supporters argue this will mean better care and stronger healthcare infrastructure in communities from New Britain to Manchester.

What’s Next for Connecticut Hospitals?

Negotiations between Connecticut officials, MPT, and Prospect are still underway. The outcome will decide if UConn Health can actually acquire Waterbury Hospital without getting buried under huge tax bills.

As these talks drag on, communities all over the state—from Putnam to New London—are watching with a mix of hope and anxiety. Folks know that whatever gets hashed out in Hartford or in that Texas bankruptcy court could change local healthcare for years, maybe even decades.

Here is the source article for this story: CT and Prospect Medical Holdings landlord clash over tax debt

Discover Your Perfect Stay in Connecticut
Find available hotels and vacation homes instantly. No fees, best rates guaranteed!
Check Availability Now