Wealthy real estate investor keeping Philadelphia hospital closed during pandemic stands to receive huge tax savings from coronavirus stimulus
In Philadelphia, the most hated man during the coronavirus pandemic might very well be Joel Freedman — the wealthy, Los Angeles-based real estate investor who has kept a large hospital closed even as cases in the city rise. Pennsylvania Gov. Tom Wolf and Philly Mayor Jim Kenney have been stressing that Philly will need all the hospital beds it can get in the weeks ahead, but Hahnemann Hospital remains closed because Freedman is asking much more for the property than the city can afford. And according to The Intercept’s Akela Lacy, a part of the coronavirus stimulus bill that has been passed by both houses of Congress and signed into law by President Donald Trump could offer Freedman a huge tax savings and make him even richer.
After purchasing Hahnemann in 2018, Freedman closed it down in September 2019 — a move that inspired angry protests in Philly, where the hospital (which opened in 1848) served a lot of low-income people. One of Freedman’s most vocal critics has been a non-Philadelphian: Sen. Bernie Sanders of Vermont, who has been stressing that Hahnemann (which had almost 500 beds) could treat a lot of coronavirus patients in the weeks ahead if it reopens and becomes a functioning hospital again. Freedman has offered to either sell or rent the building to the City of Philadelphia, but Kenney has maintained that he is asking too much — and possibly, Freedman plans to convert the property into luxury condos.
Lacy, in her April 1 article for The Intercept, explains why the $2 trillion coronavirus stimulus could benefit Freedman: it “temporarily and retroactively lifts a cap on the property-related depreciation real estate investors are allowed to use to lessen their tax bill,” according to Lacy.
“Depreciation is a paper cost that real estate investors can use to factor in losses to offset other income and reduce what they pay in taxes,” Lacy notes. “In Freedman’s case, that means he can use recent ‘losses’ from the hospital as it depreciates to offset his overall taxable income and, as a result, what he owes in taxes.”
#ICYMI City officials negotiating with owner of former Hahnemann Hospital for use as treatment facility for COVID-1… https://t.co/bksXVeJx8v— Trang Do (@Trang Do) 1585138331
Eileen Appelbaum, co-director of the Center for Economic and Policy Research, told The Intercept, “Depreciation on the real estate from Hahnemann from the last two years plus this year can be used to offset any tax liabilities for his household, to the extent that he’s got profit from other things that he’s done.”
This week, Freedman became a target of graffiti: outside a property he owns in Rittenhouse Square (one of the most upscale areas of Philly), someone spray-painted “Joel Kills” and “Free Hahnemann.”
@PennBat @whipsmashed @BernieSanders It isn’t about one narrow definition of eminent domain. It’s not up to one per… https://t.co/wtNc1XoXdV— Helen Gym (@Helen Gym) 1585655196
Eminent Domain was created for situations like #Hahnemann. This is a public health emergency and Philly is the lar… https://t.co/PytD5thZ78— Helen Gym (@Helen Gym) 1585076563
Philadelphia Managing Director Brian Abernathy has stressed that Freedman views the Hahnemann property as a money-making opportunity while city officials are looking at it from the standpoint of a major health crisis. One such official is City Councilwoman Helen Gym, who — like Bernie Sanders — has been arguing that the city should seize the Hahnemann building through eminent domain.
“We cannot allow unconscionable greed to get in the way of saving lives,” Gym tweeted. And Sanders wholeheartedly agrees, posting, “It is outrageous that a Philadelphia real estate investor who closed a hospital is now trying to gouge the city to re-open it. @HelenGymPHL is right: the city should reopen Hahnemann hospital immediately.”
We are facing estimates of over 100,000 coronavirus deaths. It is outrageous that a Philadelphia real estate invest… https://t.co/hj62j3sew8— Bernie Sanders (@Bernie Sanders) 1585583875
A reminder: @BernieSanders stood with Philly nurses & healthcare workers at #Hahnemann last summer. It’s why we fig… https://t.co/0J6Ni6S4du— Helen Gym (@Helen Gym) 1585592441