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Neighbors Growing Together | Nov 24, 2017

Supervisors deny tax break for Bonnell Project

By DIANE VANCE | May 28, 2014

The Jefferson County Board of Supervisors held its purse strings tight Tuesday at its regular weekly meeting.

The board, on a 2-0 vote with one abstention, denied Roland Well’s request on behalf of The Bonnell Project for an abatement of $20,000 in property taxes and did not contribute funds to the Friends of Lake Darling for rental cabin construction at the newly refilled lake.

Wells had asked the board the previous week about the tax abatement on the former St. Mary Catholic Church property on North Third Street.

Supervisor Lee Dimmitt had said he would abstain from voting because his wife rents a commercial space at The Bonnell Project’s building at Burlington Avenue and Main Street. Supervisor chairman Dick Reed was absent the previous week, so the board could not hold a vote May 19, and Wells returned this week, when all three supervisors were present.

“The request on the table is to abate the property taxes,” said Wells. “We didn’t file the paperwork on time last year.”

Wells said The Bonnell Project, which includes both properties in Fairfield — the building on the southwest corner of the square, purchased by the nonprofit organization in 2008, and the former church property bought three years later, is a nonprofit business incubator which focuses on the 30-and-under crowd, but aims to serve the whole community.

The former church property was purchased in October 2011, and includes a five-bedroom house (parsonage), a 15,000-square foot schoolhouse, formerly DeCoursey Hall with a large kitchen and dinning hall, a 1,500-square foot workshop/warehouse and 1.7 acres of land.

“When we purchased the Bonnell building in 2008, it was half-vacant and it was envisioned as a space for start-ups. We decided to let the commercial tenants already in the building stay, and they pay rent.

“We ran out of space in a few years and had more young people asking for a bigger space, a commercial kitchen and artists studio areas for the enterprises they wanted to start,” said Wells. “That’s why we purchased the former St. Mary property. It has a commercial kitchen, industrial space and open spaces as well as a yard for gardening.

“We also had a group of college graduates who wanted to create an intentional living space, a different way of living as a community,” he said.

“We’ve had great success in both buildings. People begin projects and businesses, and learn and grow, and move out and move on. Ideal Energy used our warehouse space until just recently when the company purchased its own warehouse and will move out. We have a candle maker and a soap maker right now. The Gardens restaurant has been very popular.”

Wells said the Bonnell building pays property taxes on the portion of spaces rented by commercial tenants, those who were already in the building when the nonprofit bought it in 2008.

“The property on North Third Street has no commercial tenants,” said Wells. “If this space is not available for young people who might not qualify for conventional bank loans to be able to start a business, we lose a great economic development opportunity.

“These young people will leave and go to another town that wants to encourage entrepreneurship and new enterprises.”

Supervisor Becky Schmitz asked how the nonprofit determines what and how to charge people using spaces and living in the house.

“This nonprofit has no owners, no shareholders, no one is paid, it’s all volunteer-run,” said Wells. “That’s one way we can reduce costs. We pay mortgage, utilities and maintenance. We figure the total square footage and determine we need ‘X’ amount per square foot to cover expenses. We ask people to pay what they can, and if they develop a for-profit business, they contribute. We have no agreements about payments being required.”

Reed asked if the organization knew it would need to pay property taxes when it purchased the property.

“When you started the nonprofit and bought the Third Street property, it’s governed by county assessment,” said Reed. “Now, you owe money and it seems like you’re wanting a bailout.

“You’re asking 16,000 people [county population figure] to support paying the taxes on this,” said Reed.

“We’re asking 16,000 people to support young people wanting to develop businesses, creating economic opportunities and staying in the community and raising families.

“I’m a volunteer, working with a nonprofit,” said Wells. “I have been here for decades trying to do good things for the community. As a nonprofit, we qualify for a tax exemption.”

Wells said the issue of tax abatement is a separate issue of qualifying for a tax exemption; the paperwork was not filed by the annual deadline and now the Third Street property is going to a tax sale in June.

“We want to create more jobs here with The Bonnell Project, more jobs than Heartland Co-op is ever going to create,” said Wells. “This niche of people can’t go to the banks for conventional loans. We can provide mentoring and a review of business plans and rent-free space for them to try out ideas and find out what works.”

Jefferson County Assessor Sheri Blough said the old St. Mary Church property already receives some tax exemptions.

“The home is assessed at $110,000 value and people have sleeping rooms and live there. To me, it’s like a boarding house and people pay rent, and it’s more like at-market rent.”

Wells said the organization has nonprofit status of 501.4 with the state and IRS, but Blough said that status has nothing to do with property taxes.

“Given the circumstances in the Bonnell building, where not all tenants pay rent, I see that as having an adverse affect on the commercial tenants,” said Dimmitt.

“We’re a landlord, and landlords do different things with their money,” said Wells. “We could have kicked everyone out [in 2008] when we bought the building.”

Dimmitt said the commercial businesses are trying to stay in business also and are sustaining the nonprofits.

“You’re asking every business and person there to pay your property taxes,” said Dimmitt.

“Absolutely!” said Wells. “The community is lacking — in some ways — supporting young people thriving here. This discussion should be had more often. Our business is to help those coming up.”

Schmitz said it was the opinion of assistant county attorney Pat McAvan that, “window of opportunity came and went,” for filing for exemption status.

“The biggest concern for me is setting a precedent,” said Schmitz. “I have a concern about your mission, also. It is difficult for young people to get loans and get started. I do have a lot of respect for this project. But I get a bit murky about the intentional living aspect.”

Wells said the intentional living community is like any other business at The Bonnell Project.

“No rent is charged, three or four people are living in the rectory and are starting projects, there is a crossover,” said Wells. “From our standpoint as a nonprofit, we’re taking the same risk with the intentional living community. We are not running an intentional living community; we own the property and building where an intentional living community is growing.

“As for setting a precedent, the county has supported other economic development breaks,” said Wells. “And if it does set a precedent — if we had more projects to grow business and increase economic activity in the community — it would be wonderful to have more such organizations.”

Reed said the board didn’t want to set a precedent in abating property taxes.

“A big factor in my decision is I represent 16,000 people,” said Reed. “I’ve sat on the board of review for several years, and I know how to be objective.

“I like your projects, I like your kids there doing the projects. You made a mistake — and I’m not going to say OK and fix it. The county assessor has to do a job. I’m denying your request.”

Schmitz said she didn’t want the county to abate property taxes for other groups of people who want to live together.

“It should be noted Sheri [Blough, assessor] has exempted more than half your space, at $190,000. We are supporting your efforts. And this is as much as I’m capable of supporting,” said Schmitz.

Wells said The Bonnell Project model wouldn’t work with needing to pay $20,000 per tax year.

Reed told the representatives from Friends of Lake Darling that Jefferson County had supported the lake with $30,000 in 2004 and 2005.

“You’ve done a pretty good job of fundraising again, and I don’t see that we have funding to give you at this time,” he said.

Dimmitt and Schmitz said they agreed not give funding now, when the county doesn’t have it, but would like to keep options open in the future.

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