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Ruling soon on Geer tax status

NORTH CANAAN — The North Canaan Board of Assessment Appeals (BAA) has 10 days from Tuesday, April 10, to rule on whether Geer will be able to keep its tax-exempt status.

At their meeting April 10, the three BAA members heard an appeal from Geer CEO Kevin O’Connell; Geer’s attorney, Joseph Schwartz of Murtha Cullina; and Geer CFO Mark Kovitch.

North Canaan has a new assessor, Donna Patchen, who officially started work on April 2 but who has been working in the assessor’s office in town since last autumn. 

Every four years, all tax- exempt organizations in Connecticut have to file an M3 to reaffirm their tax-free status. When Patchen prepared the 2018 quadrennial M3 for Geer, she felt that the retirement facility could in fact be taxed by the town.

Geer has federal 501(c)(3) status but the state’s regulations on tax exemption supercede the federal regulations. It is up to each town’s assessor to interpret the state statute and decide whether an organization qualifies.

Patchen told Geer that in her opinion, the facility (which is broken up into five parcels) does not qualify. It is not clear how much the Geer parcels would be assessed at for tax purposes, but it is believed to be several hundred thousand dollars.

Patchen was previously the assessor for Torrington.

Geer has appealed to the BAA, which has the power to overrule the assessor. If at the end of the 10-day period, the board members choose to agree with the assessor, then Geer has the right to appeal to the state’s superior court and then perhaps the state Supreme Court. 

The three board members are Chairman David Jacquier and members Thomas Gailes and Richard Crane Sr. 

O’Connell’s plea

Geer head Kevin O’Connell spoke first and gave a brief history of Geer, which has been in North Canaan for 80 years. He stressed the charitable aspects of the organization, noting that many area residents are welcomed to the facility even if they are unable to pay. The Geer campus is open to community members, many of whom host events and meetings in the conference/meeting room. 

He pointed out the important part Geer plays in the economic health of the town. Of the organization’s 300 employees, he said, more than 100 live right in North Canaan. 

“Geer alone, not counting the hundreds of people who live at Geer and shop locally, but Geer by itself spends over half a million dollars annually on local goods and services.”

Jacquier commented that the board was “as shocked as you were” at the assessor’s decision to challenge Geer’s tax-exempt status. The board’s goal, he said, would be to honestly and fairly consider the question and, if possible, avoid getting a lot of lawyers involved.

The lawyer’s explanation

Next to speak was Schwartz, the attorney for Geer. 

He offered an explanation of why Geer should in fact continue to qualify as tax exempt.

In recent years, he said, the state has pulled back funding for towns. In response, towns have looked for ways to increase their grand lists of taxable property. Many have chosen to challenge previously tax-exempt organizations, including hospitals and nursing homes.

An area assessor, speaking off the record, confirmed this and said that most of these cases have been settled out of court. Noble Horizons in Salisbury, for example, was involved in a lawsuit with the town. 

A settlement was reached in which the retirement community is not taxed for any areas that involve nursing care. The independent living cottages, however, are taxed.

Noble has three taxable parcels. The town collected taxes on those properties last year of $41,693, $5,473 and $1,890.

Salisbury has one of the lowest mill rates in the state, at 11.1. The mill rate is used to assess taxes. 

North Canaan has a much higher mill rate, at 27.5 mills.

Sharon Health Care Center is no longer tax exempt; it had been until  2012, when it was sold. It is now owned by Athena Skilled Nursing. It paid $52,596.80 in 2017. The mill rate was 14.4 for half the year and 14.7 for the second half. 

 Schwartz said the only case that has gone to the state Supreme Court so far was tried in 2009 and is St. Joseph Living Center v. The Town of Windham.

In that case it was decided that five factors qualified St. Joseph as tax exempt. 

Schwartz listed those factors and explained why Geer satisfies all five. 

Personal property

CFO Mark Kovitch then went over a detailed listing of property owned by Geer, including several motor vehicles that the facility no longer owns. The items were carried over year after year, Kovitch explained, because Geer was not being taxed. 

The board will announce its decision to Geer within 10 working days of the April 10 meeting.

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