Council raises red flag after tax bills catch city nonprofits off-guard

Council raises red flag after tax bills catch city nonprofits off-guard

The Armory building owned by St. James Baptist Church is among several properties that received unexpected tax bills this year after the city removed their tax-exempt status.

WOONSOCKET – Nonprofit organizations long considered exempt from the city’s tax rolls may have to pay up after a status change led to a wave of unexpected tax bills earlier this year.

In July, the city sent bills to at least six organizations for properties that were previously considered tax-exempt under the law. Among those that received bills were the former Sacred Heart Church in Fairmount, the former Father Marot CYO Center on Federal Street, the Armory building on South Main Street, the former St. Louis School on George Street, the former Our Lady of Victories School on Spring Street and RISE Prep Mayoral Academy on Cumberland Street.

According to Tax Assessor Elyse Pare, the bills were part of an annual review of properties that no longer fit the requirements for tax-exempt status. While most of the buildings on the list continue to be owned by nonprofit organizations, she explained, several of them sit vacant and are no longer used for tax-exempt purposes, including a school or a church. In the case of Sacred Heart Church, the building was closed after the parish merged with two others in July of last year and is currently up for sale. According to city tax records, the property received a bill for $21,898.24 for the 2019-2020 fiscal year.

“Once the church becomes decommissioned, it’s no longer technically a church or a sacred space,” she said. “I can’t in my position give them an exemption knowing that it’s not a church.”

In 2017, Northeast Revaluation Group completed a full revaluation of the city, a process Pare said prompted her to take another look at some properties that had been considered tax-exempt for many years. These included 316 South Main Street, the former Armory building that St. James Baptist Church purchased more than 20 years ago in the hope of incorporating it into their ministry. Those plans never came to fruition, and last month, the church received a bill for $23,274.74.

Pare said she looked at how each property was used as of Dec. 31, 2018. The date explains how 30 Cumberland Street, the home of RISE Prep Mayoral Academy, made the list. Though the charter school’s move to the former Blockbuster building a few months later was well publicized, as of December, the property was still undergoing renovations and did not qualify for tax-exempt status as a school, according to Pare.

At least one of the properties is appealing the city’s decision that it’s no longer used for tax-exempt purposes. Leo Fontaine, former mayor and director of the Father Marot CYO Center, told The Valley Breeze the organization is currently in discussions with the city about the status of its properties on Federal and Clinton Streets. Last year, the center announced plans to sell its Federal Street properties and move to a new location on Harris Avenue. The sale fell through, but the move went forward, with most of the center’s offices moving to the rectory of St. Stanislaus Church last fall.

However, according to Fontaine, the center has continued to use the building to host some of its ministry activities until it can find a new buyer, including a bible study series and an upcoming praise and worship event. He’s hoping the part-time use will be enough to wipe out a $37,449.48 tax bill on a building currently classified as “commercial” under the city tax records.

“When the building was reported as being sold, the city basically had the assumption that we were no longer in the building and not using it,” he said. “But after that sale never came to fruition, we have continued to use the building, albeit not as before, and will continue to be using the building until the property sells.”

The center’s situation caught the notice of City Councilor John Ward, who raised concerns over the unexpected bills at Monday’s City Council meeting. Though he wasn’t disputing the tax status of the properties in question, he said, he found it troubling that the organizations were not notified of the status change until they received a bill in the mail.

“To simply do it with no notice, send a bill for $25,000 to $35,000 and not give the courtesy of a notification, I found disturbing,” he said.

Later in the meeting, councilors voted unanimously to support an ordinance that curbs the city’s ability to change a property’s tax-exempt status without notice, requiring the tax assessor to notify the property owner and City Council of the change in writing at least 90 days before sending a bill. The measure also applies the standards previously used to levy non-utilization taxes to formerly tax-exempt properties. Under the new measure, any organization that can demonstrate it is actively marketing a vacant property or have used it for tax-exempt purposes within the prior calendar year would continue to be exempt.

Though the new ordinance will have no effect on the current year’s taxes, Ward said he plans to ask his fellow councilors to consider an abatement of taxes for the six properties. If that doesn’t pass, he said, the organizations’ next option will be to file appeals in Superior Court.

The former Father Marot CYO Center on Federal Street is among several properties that received unexpected tax bills this year after the city removed their tax-exempt status.

Comments

The Stadium Theater is a revenue generating machine which utilizes city resources on a regular basis, Police details for traffic management, Fire/Rescue, Municipal Parking lots, etc....
If Landmark Medical, Mount St. Charles Academy, Veteran's Organizations, etc. needs to pay their fare share, so should the Stadium Theater.

Mount and the Stadium are exempt by state law. These properties should be taxed too, but fair notice and evidence of vacancy should be done first. That will move to sale and possibly to a tax paying purpose. The Armory will be a serious problem though. Cost of rehab for use is extremely high, I'm sure.

From what I understand Mount has a Pilot Agreement and contributes to the tax base, The Does not have an agreement and contributes nothing to the tax base.

Your Job is to level the playing field for everyone, CHANGE THE LAW.