Company wants its tax break back
Concern for Independent Living lawyers insist group is a nonprofit
1 comments below
Concern for Independent Living, the company that owns the former Henry Perkins Home, is hoping to convince town officials to give back the tax exemption that was taken away last year.
The company, which rebuilt the former Henry Perkins Home on West Main Street into a 50-unit low-income apartment complex for people with psychiatric needs, was stripped of its tax exemption by Riverhead Town last year on the basis of a legal opinion that the company that owned the property was a for-profit corporation.
The loss of the tax exempt status cost Concern for Independent Living $130,000 in 2010, and the town also wants the company to pay $118,000 for 2009, according to the company's executive director, Ralph Fasano.
"It's enough to make the project not feasible anymore," said Mr. Fasano, who said funding the group receives from the state does not include money for real estate taxes.
With a new Town Board in place as of January, Mr. Fasano and his attorneys appeared last week in Town Hall to make their case for getting back the exemption.
But Supervisor Sean Walter warned that the town has budget problems of its own and is not in a good position to be giving back money.
Concern for Independent Living purchased the property in October 2004 for $3 million, then sold it for $1 to Concern Riverhead Housing Development Fund Corp. in September 2006, according to town records. Both are nonprofit corporations, according to the New York Department of State.
But deputy town attorney Dan McCormick last year said that in researching the deed to the property, he learned that Concern Riverhead Housing Development Fund Corp. is actually just a "nominee" for the property's actual owner, a for-profit company called Concern Riverhead LLC. A nominee is a person or company in whose name the title to the property is held, but who is not the actual owner, he said.
Because of this, he urged that the tax exemption on the property be voided.
But Concern for Independent Living maintains that this is the way affordable housing projects are financed throughout the U.S.
"We purchased the building under the name Concern for Independent Living, a nonprofit corporation," Mr. Fasano told the board last Thursday. "But in order to secure the funding for the project, we used low-income housing tax credits, which are federal credits which are issued to the state, and then issued to applicants that are successful."
He said $5 million of the $15 million cost of the project came from low-income housing tax credits, "which require that our organization set up numerous corporations, one of them being a for-profit corporation, which gives the investors the tax credits.
"It's a complicated process, but simply put, for-profit investors invest in affordable housing and they receive a tax credit over a 10-year period. Our organization is clearly that of a nonprofit organization. We have close to 100 sites in Suffolk County and 99 of them are exempt; this is the only one that isn't."
"This process for how we got the funding was kind of forced upon us," said attorney Charlie Russo. "It's the one process that's used for low-income housing across the nation. It's what the government gives us to use. It's not as if we chose to do this."
"I believe we do provide value to the town," Mr. Fasano said, pointing out that the group has spruced up the building and eliminated many of the problems that existed with the previous Perkins Home.
"We have numerous staff who shop downtown and we have 50 residents who get $200 monthly food allowances and they don't go anywhere else, they walk into the town and spend $10,000 a month in town," he said.
Mr. Fasano added, "It doesn't seem in the town's interest to force us into a foreclosure and have the county take it over."
Mr. Walter said the town will try to work with Concern for Independent Living and suggested a payment in lieu of taxes.
Mr. Fasano suggested "nominal payments."
"We might want more than nominal payments," Mr. Walter said.
The board did not reach a decision on the case.
tgannon@timesreview.com
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1 comments found
Tax break : 2/10/2010
The town needs to get its priorities straight, they tax an agency that helps the less fortunate and gives 10 year free rides to people like Ray Dickhoff and Jim Bissett who are only in it for the big bucks. Thats not why I voted for Sean Walters
