Masonic group reaches agreement with Woonsocket

Masonic group reaches agreement with Woonsocket

City acknowledges organization’s tax exempt status

WOONSOCKET – Unlike the city’s social clubs and other nonprofits, the Woonsocket Masonic Temple Corporation will not be held liable for property taxes under a settlement agreement approved by the City Council this week.

Instead, the group will pay the $11,136 with the knowledge that in the future, both their tangible property and real estate will be considered exempt under state law.

The agreement ends a four-year battle between the city and the organization over taxes on its headquarters at 142 Clinton St.

Historically, the property had never been taxed, but when the city was facing potential bankruptcy in 2013, the lodge was one of dozens of groups in Woonsocket tasked with proving why they should not be receiving a bill. In 2014, the organization, founded in 1811 with the stated purpose of fellowship, received a bill for $14,848.

In lieu of the bill, city officials soon offered the group a deal that would have seen them paying $3,712 a year for the property, valued at $371,300, for five years.

Similar agreements for paying 25 percent of the full burden were offered to seven other nonprofit groups, which have been dubbed “social clubs” by city officials. Most, including the Italian Workingmen’s Club and the Woonsocket Elks Lodge, quickly agreed to the offers.

But the Temple corporation maintained that as a charitable organization with no source of income, it should not be on the hook for its Clinton Street property, a brick structure built in 1928 and used for organizational meetings. Instead, representatives hired Attorney Andrew Sholes of Warwick and appealed the action in Providence Superior Court.

“The real estate tax assessment is illegal, null and void for the reason that it would be a violation of Rhode Island General Law,” the complaint stated.

It’s a case that until this week, was still pending. And while the legal battle dragged on, the city continued to send the organization tax bills and penalties, even listing the property on a tax sale list published in September.

The organization will dismiss the lawsuit as part of the agreement signed this week. They’ll also drop three administrative appeals filed with the city assessor in 2015, 2016 and 2017 challenging their bills.

“The parties are desirous of resolving all pending disputes and claims, dismiss all pending lawsuits with prejudice, withdraw all pending administrative tax appeals with prejudice and have reached a proposed settlement agreement that is in the best interest of all parties,” states the settlement, approved unanimously on Monday by the City Council.

“I think this is a good deal because according to the law, the fraternal groups are exempt, but they’re putting their best food forward,” said Councilor Richard Fagnant.

It’s a deal for the Masonic group as well. The agreement proposed in 2014 would have added up to $18,560 over five years. And worse, members have noted that it would have amounted to admitting they were taxable.

“There’s a statute that exempts (fraternal organizations) from being taxed,” Sholes explained to The Breeze this week, pointing to Rhode Island General Law 44-3-3 covering property subject to taxation. The law, Sholes noted, also stipulates that income raised by the organization is used for the relief of indigent members.

“When we explained to the city that we were a fraternal entity they didn’t have an issue with that, but they took issue with the second part,” Sholes said.

Sholes recommended a slight modification to the temple’s bylaws, which was filed in 2016.

The rules governing fraternal organizations specify that they include only men, and other taxable organizations differ from the Mason group by operating bars and restaurants on their properties, or renting out their halls.

“There’s no income coming out of this building,” said Sholes, who represented a different lodge during a similar battle in East Providence.

The $11,136 is considered a contribution to the city, and must be paid within seven days, according to terms of the agreement.

Sholes said that overall, he’s satisfied with the settlement.

“It preserves their tax exempt status going forward so they can remain in the community,” he said.

Comments

If a PILOT agreement exists for the Stadium Theater, it should be made public. If one does not exist, it's non profit tax exempt status should be rescinded and full taxation laws for federal, State and local liabilities be enacted.

The Stadium is exempt specifically through state law

The Stadium is tax exempt per Rhode Island General Law; it does not have a PILOT agreement.

(33) The Stadium Theatre Performing Arts Centre building located in Monument Square, Woonsocket, Rhode Island, so long as said Stadium Theatre Performing Arts Center is owned by the Stadium Theatre Foundation, a Rhode Island nonprofit corporation

The point is the agreement should be either rescinded or the same agreement offered to ALL other non profits in the state. Why are we playing favorites in this day and age.... It makes no sense when a viable business entity generates revenue and makes additional demands on tax payers for municipal services.