Prime Healthcare is in the process of seeking property tax exempt status through the state of Illinois for St. Mary’s Hospital, a Prime spokesperson said.
Meanwhile, a group of Kankakee County taxing bodies are pooling resources for an assessment of St. Mary’s property for taxation.
Prime Healthcare acquired St. Mary’s Hospital in Kankakee in March of 2025.
The hospital has historically operated as a non-profit and therefore been exempt from taxation.
Mike Deering, regional director of external communications and public relations for Prime, said that the company is currently applying for tax-exempt status at the state level for St. Mary’s.
St. Mary’s Hospital is part of the Prime Healthcare Foundation, a nonprofit 501(c)(3) public charity, and operates as a nonprofit hospital with federal tax-exempt status through the Internal Revenue Service, he said.
Obtaining property tax exemption in Illinois is a separate process.
The state’s process requires demonstrating that charitable care and community benefit are provided after the transaction is completed and exceeds the estimated property tax value, Deering said.
He said that, because the Prime Health Foundation assumed operations in 2025, this documentation could not be submitted at the time of closing, as it “requires sufficient operational data under new ownership to support the application.”
“The property tax exemption filing is currently in process and scheduled to be submitted this week, and no deadline has been missed,” Deering said in a statement to the Daily Journal on Monday. “Kankakee County is aware of the timing and requirements associated with this process.”
Agencies seeking the appraisal of the hospital for taxation include Kankakee School District 111, the City of Kankakee, Kankakee Valley Park District, Kankakee Community College, Kankakee Airport Authority, Kankakee County Board, Kankakee Township Supervisor, Kankakee Township Road District and Kankakee Forest Preserve.
Last month, the Kankakee School Board approved a resolution to pay $7,000 of the approximately $16,500 cost of the specialized appraisal of St. Mary’s Hospital.
As the largest taxing body in the county, District 111 agreed to pay the largest share of the cost of the appraisal, since it would be the largest recipient of potential tax revenue.
Erich Blair, supervisor of assessments for Kankakee County, said that when a tax-exempt property has a change in ownership, the exemption does not carry over, and a new application is required.
When Prime Healthcare received the St. Mary’s property in 2025, they would have needed to reapply for tax-exempt status in order to maintain the exemption, he explained.
“I certainly did speak with their attorney, their legal representation, in 2025 and urged them to file an application on any parcel which they felt was eligible for exemption,” Blair said.
He said that he had not received an exemption application from Prime by the end of 2025.
“If they don’t apply for it, and it’s not granted by the Illinois Department of Revenue at the state level, I am bound by law to put it on the tax roll,” Blair said.
That is why the specialized assessment of the value of St. Mary’s property was set in motion, he explained.
This is a task that is beyond the expertise of the Kankakee County assessor’s office.
Only a few people in the country are qualified to evaluate a hospital, which is why a specialized appraisal is needed, he said.
“In the absence of those applications to this point, I have to have a credible value by the time we go to publish assessments in the fall,” he explained. “I have to give that appraiser plenty of time to come up with that value and substantiate it for his report.”
Blair noted he believes the application for the hospital is forthcoming based upon conversations with Prime’s legal representation.
If Prime moves forward with an exemption application, the application would go to the county’s Board of Review.
The Board of Review would then make a recommendation to the Illinois Department of Revenue, which makes the final decision on whether a property is exempt or taxable.
At that point, either side could appeal that decision directly through the Department of Revenue.
Entities that are granted tax-exempt status must submit a renewal form to the county every year verifying nothing has changed that would affect the status.