FairPoint Fought Bill For Seized Property
Claremont — FairPoint Communications, whose Broad Street office building was seized by the city for back taxes this week, did not pay taxes in 2009 because of an abatement that remains tied up in court, Jeffrey Nevins, a spokesperson for FairPoint Communications in Maine and New Hampshire, said yesterday.
The city tax deeded the 16,000-square-foot building on Wednesday because under state law a municipality must take a property when taxes are delinquent more than three years.
Nevins said the abatement was filed in 2010, challenging the $1.6 million assessment in 2009 of FairPoint’s Claremont properties, including the rights-of-way where the utility poles are located. Quoting from the abatement, Nevins said the company alleges the assessments are “illegal, excessive, disporportionate and unjust.” While he acknowledges that the abatment was being sought on the rights-of-way, Nevins said the office building is tied into the filing because the company received one tax bill.
“It goes to the whole package,” he said. “Because the bill is one, the building becomes part of the abatement. The city’s interpretation that the building is separate from the rest of the property, we disagree with that.”
The city proceeded with the tax deed when taxes on the building became more than three years delinquent, not when FairPoint’s taxes on other property were delinquent more than three years. According to the city’s finance department, FairPoint owes a total of $300,000 from 2006, 2007 and 2008 on its rights-of-way.
Nevins also pointed out that FairPoint filed for Chapter 11 bankruptcy protection in late 2009. He said any claims that were not resolved when the company came out of bankruptcy in 2011 were not required to be paid and the pending tax abatement falls into this category.
“We can only pay claims that were allowed under the order of the bankruptcy court,” Nevins said, disputing a statement Thursday by Claremont City Manager Guy Santagate that paying back taxes was part of the court order.
“The city’s action (tax deeding) is a direct violation of the bankruptcy court. There is no agreement (with the city) in place,” Nevins said. “We will be responding to the city’s action and will do it rather quickly.”
The tax deed action means the city is now the owner of record on the building, which is assessed at $1.2 million. FairPoint’s total assessment, including the building, poles and conduits and rights-of-way is $3.1 million. The $56,000 owed by FairPoint from 2009 — when the poles were not taxed — applies to all of FairPoint’s taxable property for that year. The Legislature removed the tax exemption on poles a couple of years ago.
“We were very surprised (by the city’s action,)” Nevins said. “There was no heads up whatsoever that I know of.”
Santagate and Finance Director Mary Walter said Thursday they sent notices by registered mail to FairPoint but never received a response.
The company paid in full its 2011 and 2012 taxes as well as the first quarterly payment this year.
Nevins said FairPoint made a “business decision” to stay current on the most recent years’ taxes to avoid steep interest charges if it loses the abatement appeal it is seeking on the 2011 assessment of the poles.
“We will pay now and challenge it later,” he said.
Santagate last night said that the methodology used to assess a right-of-way and the bankruptcy make the matter extremely complicated. But he quickly added the city wants to work with FairPoint to resolve the dispute.
“We are looking to untangle this and will consider reasonable proposals,” Santagate said. “If there is a way out of this, we are willing to look at it. Hopefully we can work it out.”
The tax deed for FairPoint that was recorded at the county register of deeds was the first of what is likely to be about 20 similar actions on other properties, including homes and vacant land. Walter said this week they are doing final title searches. Once the city owns a parcel it can put it up for tax sale or hold onto it for three years. If the city sells it after three years, it keeps all the proceeds but when there is a sale within three years, any amounts above the city’s costs, including taxes, are refunded to the owner, Walter said. She said she does not plan on recommending the city hold onto properties for three years.
Patrick O’Grady can be reached at email@example.com.