TAXMAN, CHURCH AT ODDS

Troy plan to add closed sites to tax rolls draws opposition of diocese

KENNETH C. CROWE II STAFF WRITER
Section: Main,  Page: A1

Date: Friday, October 22, 2010

TROY -- Six saints are at the center of a property-tax dispute in Troy.


The city has added four closed Catholic churches -- St. Paul the Apostle, St. William's, St. Peter's and St. Francis de Sales -- to the local tax rolls this year. And two more shuttered sites -- St. Mary's and St. Patrick's -- could soon join the list.


Local officials, seeing a green light in state law, want to tax churches after they've been closed for a year.


"A church can be deemed taxable by the assessor if the church is not being used for purposes of the religious organization," according to state Tax Department spokesman Geoff Gloak.


But the Roman Catholic Diocese of Albany isn't buying that take on church and state and has launched a legal challenge. It and other dioceses around the state maintain their nonprofit status means churches -- open and closed -- are tax-exempt. Church officials say the sour economy has spurred communities to break with past practice.


"As municipalities and counties become desperate for tax revenues, they begin to look at nonprofits," said Dennis Proust, a spokesman for the New York State Catholic Conference. The conference has joined with other nonprofit organizations to oppose taxing their properties.


Selling properties is one way out of the conflict. So far, the diocese says, it's sold 18 of the 33 worship sites closed under its Called to Be Church consolidation. Among them are St. Francis de Sales, which is set to start a new life as an RPI fraternity, and St. Paul the Apostle, which is under contract for a closing by year's end.


For local governments, putting a value for tax purposes on a church that's up for sale may not reflect the price it commands on the open market.


St. Mary's, across from Washington Park in an upscale part of town, is listed for sale at $250,000. The city assessment roll pegs its full market value at $1.26 million. St. Patrick's in North-Central Troy, the city's most troubled neighborhood, hasn't been listed for sale yet, but it's valued at $3.73 million for tax purposes.


"The assessed values for some of the churches are pretty high," said Paul Ehmann of the Coldwell Banker real estate firm. "That's something which is always a question for a future purchaser: What are the taxes going to be?" Ehmann and colleague Todd Curley have handled most of the recent church deals under a contract between their firm and the diocese to sell the dormant houses of worship.


One local attorney with property tax law expertise said taxpayers and tax collectors should not count on churches lightening the load.


"That would be a pretty tough row to hoe," said Paul Goldman, of the law firm of Segel, Goldman, Mazzotta & Siegel in Albany. He noted that over the years assessors had been "deferential to the diocese and religious organizations" and there is little legal precedent for taxing them.


Neither the diocese nor the city would comment on the pending litigation.


City spokesman Jeff Pirro said "We believe the diocese can sell a church for a profit. Why can't we tax it?"


In Albany, Commissioner of Assessment and Taxation Keith McDonald said plans are to add the recently closed St. Teresa of Avila church to the rolls next year. Watervliet Mayor Michael Manning said his city won't take action on taxing its closed churches while it watches what develops in Troy. Cohoes and Green Island, also home to closed churches, are also keeping an eye on Troy's efforts too.


Most of the closed churches are in urban areas while suburban parishes are growing as population has shifted. However, buyers are out there for the city sites despite the deep recession.


"What we're finding is there's a lot of small churches looking to grow, particularly nondenominational storefront churches," Ehmann said.


St. Mary's has drawn attention from other religious groups as well as arts organizations and investors considering converting the landmark into housing.


St. Mary's and St. Patrick's remain challenges because they are so big. "They're tough with 25-foot-high ceilings," Ehmann said.


Neighborhood leaders are concerned that any future owner be able to afford to rehab and maintain the historic structures.


"We obviously want it to be a sustainable use," said Lynn Kopka, president of the Washington Park Association.


In Cohoes, the sale has altered the city's pulse, said Mayor John T. McDonald III.


"It's strange not to have the physical presence of the Catholic church in downtown," he said. "The church bells don't ring any more. You miss that."


Kenneth C. Crowe II can be reached at 454-5084 or by e-mail at kcrowe@timesunion.com.





At a glance


The six closed Roman Catholic churches in Troy carry different property assessments. St. Patrick's and St. Mary's are listed as exempt while the other four are considered taxable by the city.


CHURCHMARKET VALUE


St. Patrick's $3,733,610


St. Mary's $1,268,302


St. Paul the Apostle $790,000


St. William's $490,000


St. Francis de Sales $183,426


St. Peter's $161,494


The values are for churches only.


Source: City of Troy 2010 Final Assessment Roll.


PULLOUT:


"We believe the diocese can sell a church for a profit. Why can't we tax it?"


JEFF PIRRO, Troy city spokesman





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