King’s Fork-area retirement community Lake Prince Woods has applied for a real estate tax exemption under the city’s allowance of such exemptions for nonprofit organizations. Some city leaders want a moratorium on all such exemptions.
King’s Fork-area retirement community Lake Prince Woods has applied for a real estate tax exemption under the city’s allowance of such exemptions for nonprofit organizations. Some city leaders want a moratorium on all such exemptions.

Exemptions on Council agenda

Published 9:49pm Saturday, August 31, 2013

Tax exemptions for charitable organizations will dominate the City Council agenda for its meeting this Wednesday.

A public hearing to receive comment on an application by Lake Prince Woods to exempt its 172-acre campus from about $307,000 annually in real estate taxes will be held.

However, a moratorium on new exemptions is on the meeting’s consent agenda, meaning it could be voted on before the public hearing is held.

City leaders say the growing amount of exemptions from the tax rolls is becoming a concern. Property that is tax-free makes up 13.5 percent of the city’s total taxable value, and the city has no control over most of the exemptions, such as for churches.

However, exemptions for nonprofit organizations are not mandated by the state.

City Councilman Charles Parr said the city needs to rein in the exemptions it hands out because every one shifts more tax burden onto the rest of the taxpayers.

“You’ve got to make that up, and the only way you can make it up is to cut services through reduction in staff, through tax raising … we don’t want to do any of that if we can avoid that.”

But, he said, he believes some organizations are “genuinely qualified.”

“I look at the Obici (Healthcare) Foundation as a prime example,” he said. “The amount of benefit they give back to the community far outweighs how much they would pay in property tax.”

He cited the Western Tidewater Free Clinic as another such example.

Susan Stone, director of development and public relations for Lake Prince Woods, said the retirement community also has given back to the community, just not in quite the same way.

“We certainly think that Lake Prince Woods has had a very positive economic impact on the city of Suffolk,” she said, noting the $41 million initial construction in 2000. Another phase of construction at $10 million began in 2007.

In addition, Stone said, the community paid about $1 million to extend water and sewer lines down Kings Fork Road to its site. It has about 115 employees on the $3 million payroll.

“They’re pumping a lot of that $3 million back into the local economy,” Stone said.

In 2011, the site spent about $2 million with other Virginia businesses. Stone also noted the untold amount the retirees at Lake Prince Woods spend locally on groceries, doctors and more.

“That’s a lot of benefit we feel like we have brought to the Suffolk community in the last 11 years,” she said.

The entire site is owned by the 501c3 organization. Retirees who live in the 78 cottages and villas do not own or rent the property but rather pay a “residency fee.”

“It’s a contract we’re making with them that because we have health care areas, we will be able to take care of them for the rest of their life,” Stone said. “They have the security of knowing hopefully they’ll be able to stay in their house, but if they need other health care they can go to assisted living or skilled nursing. It’s a wonderful system.”

The community also has 94 apartments and capacity for 36 residents in assisted living, 40 in the skilled nursing area and 16 in the memory care unit. About 397 people currently live there, Stone said.

She said the organization has been considering becoming tax-exempt for “quite a while.” Two affiliated communities in North Carolina have similar status, she said.

“We recently learned there was a specific application process to make application for tax exemption relief,” she said.

City leaders have denied raising the issue of the moratorium simply because of Lake Prince Woods’ large pending application. The ordinance drafted for the council’s consideration states it does not apply to organizations “that applied for such exemptions prior to the passage of this ordinance.” Since Lake Prince Woods already applied, the decision would seem to be at the council’s discretion, whether or not it votes on the moratorium beforehand.

The drafted ordinance also says it will not apply to organizations that have already been exempted that are approved at their triennial revalidation.

The meeting begins at 7 p.m. in City Council chambers, 441 Market St. Also on the agenda is a staff report on city emergency services, likely a response to recent conversation about the status of the Nansemond-Suffolk Volunteer Rescue Squad.

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