Cincinnati to Mercy Health: You owe taxpayers $7 million after defaulting on jobs promise

Almost three years ago Bon Secours Mercy Health told the city of Cincinnati the company was transitioning to mostly remote work , a violation of the health system's tax incentive agreement with the city.

In a letter to then Mayor John Cranley, Mercy's Chief Financial Officer Deborah Bloomfield estimated taxpayers would lose nearly $1.8 million a year in earnings tax. Bloomfield cited the COVID-19 pandemic as why employees needed to work from home: "As the situation continues to unfold, we are adapting to do what is best for our employees and the communities we serve."

The 2014 tax incentive package worth at least $35 million for Mercy Health to move its headquarters to Bond Hill into a new building had been touted as a boost to the city and the neighborhood. These were high-paying jobs that showed Cincinnati was a business destination.

Today the Mercy Health building is nearly empty and the failed deal is pitting city taxpayers against one of the region's largest healthcare companies.

The city wants to claw back $7 million in incentives. Mercy has made no promises so far that they would pay up.

When Mercy sent the letter, Cranley was four months from leaving office and fresh off dealing with the worst of the global pandemic that sent office workers home to work remotely.

Despite that written notice from Mercy Health, records obtained via a public records request, show the city didn't take action to hold Mercy accountable for the terms of the deal for another two years. And even now, there is no agreement between the two parties about what Mercy Health owes − if anything − to taxpayers for breaking the agreement.

The last written correspondence was a June 20 default letter the city sent Mercy Health demanding the $7 million payment.

What happened to the Mercy Health deal?

Records obtained through a public records request show how the deal fell apart and that taxpayers and Bond Hill suffered as a result.

City officials say the pandemic prompted the city to give some companies grace during unprecedented times, but default notices were sent in 2023 to any company that remained noncompliant − including one to Mercy Health. Some companies came back into compliance, other agreements were modified.

But no deal was been worked out with Mercy Health so the city sent a second default notice in May of 2024. And then the third on June 20, which included the $7 million repayment demand.

None of this was made public until July 2 when Hamilton County Administrator Jeff Aulotto publicly proposed a plan to move 600 county jobs to the Mercy Health building , in the process revealing Mercy Health was fully exiting the site in March of 2025 and that at the moment only 100 people were working in the building.

The news comes on the heels of another failed job incentive package, one meant to bring GE's headquarters to The Banks. But that deal fell apart when the company moved to its Evendale campus, vacating The Banks. GE settled with the city for $43.5 million in concessions and a promise to fill The Banks building with at least 800 jobs.

Both deals were hailed by city leaders as game-changers. GE and its 1,800 jobs was supposed to invigorate The Banks with lunchtime vibrancy. Mercy Health was supposed to be a catalyst to bring even more jobs to Bond Hill, a predominantly Black city neighborhood struggling to maintain business and jobs. And it was working − until the pandemic hit.

Both failed deals come at a time when city leaders now say they are worried about the city's financial future . Roughly 64% of the city's budget comes from the earnings tax, which is paid for by people who live and work in the city. Tax incentive deals are meant to lure companies into the city, bringing with them workers and residents. Mayor Aftab Pureval told The Enquirer last week he supports raising the earnings tax , although no increase request is expected this year.

Mercy: We're being 'fully transparent'

Mercy spokeswoman Lisa Dyson told The Enquirer the company was "in the process of carefully reviewing all pertinent details concerning the request from the city." Mercy Health looks forward to working with the city on "next steps," she said.

"Bon Secours Mercy Health remains fully transparent regarding the impact of the COVID-19 pandemic, which necessitated a complete transition of how our office-based support staff works," Dyson said. "As a result, the Bond Hill campus has become too spacious for our current needs due to the number of staff members working remotely and in hybrid roles. We continue to deliver high-quality, compassionate health care to our patients across Cincinnati via a network of nearly 10,000 associates."

Dyson added, Mercy has invested $236.7 million into the community in 2021 and 2022. She provided a list of assistance that included sponsoring Bond Hill Day, National Night Out and health screenings in the neighborhood, but also big investments as in 2022 when Bon Secours Mercy Health invested in Emerge Manufacturing to bring a personal protective equipment (PPE) manufacturing company to the Roselawn-Bond Hill neighborhoods.

Dyson also said Mercy Health is "committed to maintaining a hub in the Greater Cincinnati area" that better fits its needs.

Alicia Reece: 'Bond Hill has gone through hell and back'

City leaders declined to comment. But Hamilton County Commissioner Alicia Reece, who grew up in Bond Hill and is a former Cincinnati city councilwoman, had a lot to say about the failed deal during a board of commissioners discussion earlier this summer about moving county employees into the Mercy Health building.

"Bond Hill has gone through hell and back," Reece said. "I have been very active in trying to redevelop the area. I disagree that Mercy was a great partner. The partnership was not what was promised."

Reece added the Mercy deal brings up a bigger issue: "Are these tax credits a good idea and do they work? They never last. Are these tax deals necessary? They don’t seem to. The Mercy deal was a failed deal for Bond Hill."

And then, although there was seemingly nobody from Mercy Heath in the room, she addressed Mercy Health specifically, "You did not hold up to your end of the deal."

County information shows the Bond Hill building is owned by Chicago-based Bond Hill Funding Company and is valued at $95 million. If the county deal goes through − it needs approval from two of the three commissioners − the county would pay $65 million for the Mercy Health building and Mercy would pay the remaining $30 million.

Jacque Edmerson, Bond Hill Community Council president, said she's seen no sign of Mercy Health being active in the building since the pandemic, nor has she seen evidence of millions of dollars of investment in the neighborhood. And she's disappointed.

"There have been some community projects, but nowhere near anything worth millions of investment," Edmerson said. "Out of sight, out of mind. We know it’s there, but they haven’t been open for business."

Edmerson said whatever comes next needs to make it what was promised, "a viable, energetic space."

Why city wants $7 million back from Mercy Health

The Mercy Health deal was brokered in 2014, one of the first big tax incentive deals under Cranley's administration. In all, the deal to bring Mercy Health to Bond Hill totaled $38 million in taxpayer incentives.

The city is accusing Mercy Health of violating two provisions of its tax incentive agreement.

It was obligated to employ at least 1,250 people each year from 2019 through 2023. It employed just 172 in tax year 2023, falling short by 1,078, city records show. And it was obligated to maintain a payroll equal to or greater than $125 million from 2020 to 2023. Mercy Health reported a payroll of $30.9 million in tax year 2023, falling short of its obligation by $94 million, city records show.

Cranley left office at the end of 2021, after being term-limited . Pureval took office and hired Sheryl Long as city manager, who had been a Cincinnati assistant city manager since 2019. None of the current nine council members were in office when the original tax incentive deal was signed.

A letter from Mercy Health notes Cranley was told about the remote work plan in August of 2021 and there were subsequent discussions with the city in April 2022 and February 2023.

"These failures by grantee are of significant concern to the city," Long wrote in the June 20 letter. She demanded a response within 30 days.

A city spokeswoman said "next steps" are currently being discussed.

This article originally appeared on Cincinnati Enquirer: Cincinnati to Mercy Health: You owe taxpayers $7 million after defaulting on jobs promise