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Jim Kenyon: Uncharitable Assessment

  • Valley News columnist Jim Kenyon in West Lebanon, N.H., on September 15, 2016. (Valley News - Geoff Hansen) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.


Tuesday, June 26, 2018

The city of Lebanon recently sent Listen Community Services a property tax bill for nearly $50,000 — the first half due next week — for the former Bridgman’s Furniture Store, which it bought last year, on Miracle Mile.

A mistake, right?

After all, Listen is a nonprofit social service organization — exempt from property taxes — that has been helping people in need for more than 45 years.

But that’s not how Lebanon Chief Assessor Rick Vincent looks at it.

Vincent is recommending the city’s Board of Assessors deny Listen’s request for a charitable exemption on the grounds that the building has not been “used and occupied for the stated mission of the organization” this year as New Hampshire law requires. 

Technically speaking, Vincent is correct. At the moment, the only ones in the Bridgman’s building are construction workers.

And there are good reasons why Listen has yet to move in, said Lebanon attorney Barry Schuster, who is representing the nonprofit. Listen, which closed on the $2 million purchase in October, is in the process of transforming the aging building into its flagship thrift store.

“It couldn’t further its purpose without doing this work,” Schuster said. “We couldn’t use the building unless we complied with all applicable building codes.”

The $750,000 in renovations, which includes installing an elevator, upgrading the sprinkler system and adding restrooms, should be completed later this summer. Listen hopes to move in by late August.

By Vincent’s reading of  the state law pertaining to property taxes, however, that’s about six months too late.   

Each year, the city bases its assessments on what the property is being used for on April 1. Since Listen hadn’t moved its thrift store on Hanover Street to Miracle Mile before the deadline, Vincent maintains that the Bridgman’s building doesn’t qualify for a nonprofit exemption.

I sort of get where he’s coming from. The city doesn’t want to set a precedent that an undeserving nonprofit could use as a tax loophole. “We have to be fair,” Vincent told me. “What we do for one (organization), we have to do for everyone.”

Today, Listen officials will take their case to the five-member Board of Assessors in a noon meeting at City Hall.

A lot is riding on the board’s decision.

If Listen has to write a check for $24,509 now and another for the same amount in December, “it’s certainly going to impact what we can do,” Executive Director Kyle Fisher told me.

Money going into city coffers that would otherwise have provided fuel or rent assistance to low-income residents in Lebanon and other Upper Valley communities. In the first 11 months of the fiscal year, Listen gave $115,594 to families and individuals who were having trouble paying heating and electric bills.

Through its “Housing Helpers” program, Listen awarded more than 150 grants of $500 each to help people who are homeless — or are on the verge of homelessness — with their first month’s rent or security deposit.

It gave away $100,000 in clothing and furniture to thrift store shoppers who couldn't afford to pay. The 708 thrift store vouchers represent a 43 percent increase from last year. More people are also coming to its community dinners and food pantry.

With the economy supposedly booming and the jobless rate at record lows, how can this be?

“The cost of living in the Upper Valley is going through the roof,” Fisher said. “Our clients just can’t make ends meet.” 

On Monday, I went to see Jay Hutchins, who chairs the Board of Assessors. Hutchins, a financial adviser, and other members of the board are in a tough spot.

Although Listen is a worthy cause, I’m sure some people want to keep the Bridgman’s property (assessed at nearly $1.7 million) on the city tax rolls as long as possible. If the board grants Listen's request, it’s a $49,000 hit for the city that must be made up elsewhere or lopped off the budget.

Listen is a “valuable community asset, we’re all aware of that,” said Hutchins, who has lived in Lebanon for 40 years. “We want to help them, but we must follow the law.” 

If denied, the organization could apply again next year, Vincent said. I’m assuming Listen would have little trouble getting a tax exemption in 2019, if its thrift store and adjacent warehouse are in operation.

But that wouldn’t help this year’s bottom line.

Listen provides roughly $200,000 a year in services to low-income Lebanon residents. In other words, the city has a stake in Listen’s financial health.  

In the world of nonprofit social service organizations, Listen is something of an outlier. It doesn’t rely on state or federal tax dollars. It’s not involved with the United Way.

Private donations — cash and used goods that can be sold at the thrift stores  — keep Listen afloat. Its four thrift stores generate roughly $1.8 million in total sales annually.

“Many people think of us just as stores,” Fisher said. “Every dollar of our proceeds stays right here in the Upper Valley.”

It seems to me that the Board of Assessors has a choice: Follow the letter of the law governing state charities. Or consider the spirit of the law, and what Listen means to the Upper Valley.

Listen specializes in doing good. The city now has an opportunity to do the same.