City of Fairfax, Virginia City Council Regular Meeting

Transcription

1 City of Fairfax, Virginia City Council Regular Meeting Agenda Item # 7c City Council Meeting 3/28/2017 TO: FROM: SUBJECT: Honorable Mayor and Members of City Council Robert Sisson, City Manager Introduction of an ordinance granting a charitable real estate and personal property tax exemption to Centreville Moose Lodge No. 2168, for certain real and personal property located at 3529 Chain Bridge Road, Fairfax, Virginia, more particularly described as tax map parcel A. ISSUE(S): SUMMARY: Whether or not to grant a charitable real estate and personal property tax exemption to Centreville Lodge No. 2168, for certain real and personal property located at 3529 Chain Bridge Road, Fairfax, Virginia, more particularly described as tax map parcel A. Centreville Lodge No is requesting tax exempt status as a benevolent and charitable organization for their property located at 3529 Chain Bridge Road (Tax Parcel A), which is used as the fraternal lodge home of their organization. This organization feels that they have made considerable donations to the community for the common good of the public that is not otherwise provided by the City of Fairfax, and should be granted a tax exemption (by classification) for this property as a benevolent and charitable organization under subsection 6(a)(6) of Article X of the Constitution of Virginia and Section (A) of the Code of Virginia. The tax exemption committee made up of David Hodgkins, Page Johnson, Cindy Petkac, and Thomas Reed is opposed to this request. FISCAL IMPACT: The real property located at 3529 Chain Bridge Road is assessed for $2,725,900 for 2017, and the 2017 taxes based on this assessment (and the current tax rate of $1.157) are $31, RECOMMENDATION: ALTERNATIVE COURSE OF ACTION: RESPONSIBLE STAFF: COORDINATION: ATTACHMENTS: Introduce the ordinance, waive the first reading, and set the public hearing for April 18, Take no action. David Hodgkins, Assistant City Manager/Finance Director Thomas Reed, Assessor Page Johnson, Commissioner of Revenue Cindy Petkac, Planning Division Chief Memorandum, Proposed Ordinance, Sample Motion

2 Memorandum Date: 3/28/17 To: From: RE: Bob Sisson, City Manager David E. Hodgkins, Asst. City Manager Request for Real Estate and Personal Property Tax Exemption by Classification by Centreville Lodge No The Loyal Order of Moose was founded in 1888 as a fraternal and service organization dedicated to bettering the lives of children and elderly in need. Centreville Lodge No is requesting tax exempt status as a benevolent and charitable organization for their property located at 3529 Chain Bridge Road (Tax Parcel A), which is used as the fraternal lodge home of their organization. This organization feels that they have made considerable donations to the community for the common good of the public that is not otherwise provided by the City of Fairfax, and should be granted a tax exemption (by classification) for this property as a benevolent and charitable organization under subsection 6(a)(6) of Article X of the Constitution of Virginia and Section (A) of the Code of Virginia. In 2007, the City Council adopted an ordinance which provides for organizations not automatically exempt from taxation by classification to apply for tax exemption by designation, pursuant to Section of the Code of Virginia, as amended. Qualifying properties must be owned by non-profit organizations, be used for religious, charitable, patriotic, historical, benevolent, cultural, or public park and playground purposes, and must meet other specific criteria. As is stipulated in the ordinance, the tax exemption committee made up of David Hodgkins, Page Johnson, Cindy Petkac, and Thomas Reed met and considered the following criteria with respect to this applicant: 1. Whether the organization is exempt from income taxation pursuant to 501(c) of the Internal Revenue Code. Centreville Lodge No qualifies. 2. Whether a current annual alcoholic beverage license for serving alcoholic beverages has been issued by the Virginia Alcoholic Beverage Control Board to such organization for use on such property. A current annual alcoholic beverage license has been issued to this organization for use on the property in question. 3. Whether any director, officer, or employee of the organization is paid compensation in excess of a reasonable allowance for salaries or other compensation for personal services which such director, officer, or employee actually renders. No director, officer, or employee of the organization is paid compensation in excess of a reasonable allowance for salaries or other compensation for personal services rendered. 3/28/17 1

3 Memorandum: Request for Tax Exemption by Centreville Lodge No Whether any part of the net earnings of such organization inures to the benefit of any individual, and whether any significant portion of the service provided by such organization is generated by funds received from donations, contributions, or local, state or federal grants. As used in this subsection, donations shall include the providing of personal services or the contribution of in-kind or other material services. None of the net earnings inure to the benefit of any individual. Most of the funds for Centreville Lodge are self-generated. The Lodge receives no local, state, or federal grants. The Lodge receives monetary donations but no in kind donations. 5. Whether the organization provides services for the common good of the public. The Centreville Lodge has indicated that in the past it has provided donations of goods, services, and funds to local charities including Britepaths, Our Daily Bread, Food for Others, Special Olympics, Go Baby Go, Alzheimer s Association, FHS, RHS, OHS, fire stations, Easter Seals, Autism Awareness, FF Backpack Drive, No Child Left Behind, Facets, homeless shelters, and blood drives. It has also indicated that it supports orphans in Mooseheart, IL and senior citizens in Moosehaven, FL. However, with the exception of approximately $10,000 in donations reflected in the 2015 Form 990 and 2015 financials included with the application, these charitable activities are not quantified in any of the remaining documentation. 6. Whether a substantial part of the activities of the organization involves carrying on propaganda, or otherwise attempting to influence legislation and whether the organization participates in, or intervenes in, any political campaign on behalf of any candidate for public office. Centreville Moose Lodge 2168 is not involved in lobbying, attempts to influence legislation, or any propaganda. 7. The revenue impact to the city and its taxpayers of exempting the property. The property located at 3529 Chain Bridge Road is assessed for $2,725,900 for 2017, and the 2017 taxes based on this assessment (and the current tax rate of $1.157) are $31, Any other criteria, facts, and circumstances that the city council deems pertinent to the adoption of such ordinance, including, but not limited to: a) Whether the organization is current on all obligations to the City. Centreville Lodge 2168 is current on all City obligations. b) Whether the organization is in compliance with all city ordinances and regulations, including, but not limited to building, subdivision and zoning ordinances. The organization is in compliance with all City ordinances and regulations. c) Whether the property for which the exemption is sought is located within a redevelopment or business improvement district. The property located at 3529 Chain Bridge Road is located in the area known as Northfax, one of the three potential commercial centers located along the Fairfax Boulevard corridor. The Northfax area consists of two tracts of land separated by Route 123 (Chain Bridge Road) on the north side of Fairfax Boulevard in the City of Fairfax. One of the City s main economic initiatives is to support and encourage the redevelopment of this underutilized commercial area which serves as the northern gateway into the City. 3/28/17 2

4 Memorandum: Request for Tax Exemption by Centreville Lodge No Summary d) Whether the property relates to the purposes for which the organization was created and tends to directly promote these purposes. The property is being used as the fraternal lodge home of the organization. This use is consistent with the Articles of Incorporation and Bylaws of this organization. e) Whether the services provided by the organization are services the city would provide if the requesting organization did not do so. Currently, the City does not provide the services offered by this organization. However, while the Centreville Lodge has indicated that in the past it provided certain charitable services, these services do not appear to be supported by or reflected in the 2015 Form 990 included with the application. f) Whether the organization meets a general public need for which the benefits derived by the community at large are equivalent to or exceed the city s loss in revenue from taxes on the entity s real and/or personal property. While the Centreville Lodge indicates it has made considerable donations and provided other charitable work supporting the local community, this is not supported by or reflected in the financials and Form 990 included with the application. Therefore, it cannot be determined if future benefits to the general public will be equivalent to or exceed the City s loss in revenue from taxes on the entity s real property. g) Whether the services provided by the organization meet an established priority of the city council. While the Centreville Lodge indicates it has made considerable donations and provided other charitable work supporting the local community, this is not supported by or reflected in the financials and Form 990 included with the application. Therefore, It cannot be determined if future services to be provided by the organization will meet an established priority of City Council. Centreville Lodge No is requesting tax exempt status as a benevolent and charitable organization for their property located at 3529 Chain Bridge Road (Tax Parcel A), which is used as the fraternal lodge home of their organization. This organization feels that they have made considerable donations to the community for the common good of the public that is not otherwise provided by the City of Fairfax, and should be granted a tax exemption for this property as a benevolent and charitable organization. The tax exemption committee has concerns as to whether or not there is a predominant charitable or benevolent purpose to Centreville Lodge No. 2168, and whether or not the subject property is predominantly used for this purpose. As a result, we do not see where at this time they qualify for exemption by classification or designation. In addition to the negative fiscal impact (lost tax revenue), the tax exemption committee makes a number of critical points as follows: 1. The predominant use of the property does not appear to be for charitable or benevolent purposes. Their IRS Form 990 shows that they do rent out their facilities for profit, but very little money is identified as going to any charitable organization or program. 3/28/17 3

5 Memorandum: Request for Tax Exemption by Centreville Lodge No While the Centreville Lodge indicates it has made considerable donations and provided other charitable work supporting the local community, this is not supported by or reflected in the financials and Form 990 included with the application. The annual benefit derived by the City s general public is typically exceeded by the City s loss in revenue from taxes on the Lodge s real property. 3. The property located at 3529 Chain Bridge Road is located in the area known as Northfax, one of the three potential commercial centers located along the Fairfax Boulevard corridor. One of the City s main economic initiatives is to support and encourage the redevelopment of this underutilized commercial area which serves as the northern gateway into the City. We do not believe it is in the City s best interest to grant tax exemption for properties in this area, as it would discourage redevelopment. 4. While the committee fully acknowledges the charitable benefits that organizations such as the Centreville Lodge No have to offer, we must also be cognizant of the costs of services the City provides to all of its residents, how those costs are funded, and how they are distributed amongst residents in the form of taxes. Committee Recommendation: In consideration of its concerns stated above, the tax exemption committee recommends that the Council deny the Centreville Moose s request for tax exemption at 3529 Chain Bridge Road. 3/28/17 4

6 CITY OF FAIRFAX, VIRGINIA ORGANIZATIONS CURRENTLY RECEIVING CHARITABLE TAX EXEMPTION ParcelID Owner StreetNumber StreetName Unit Assessment State Code LUC MASONIC HENRY LODGE NO CHAIN BRIDGE RD $ 229, MASONIC HENRY LODGE OAK PL $ 346, MASONIC HENRY LODGE OAK PL $ 243, A 327 PATHWAY VISIONS INC MOSBY WOODS DR 327 $ 173, PATHWAY VISIONS INC 9473 FAIRFAX BLVD 202 $ 181, AMERICAN LEGION # OAK ST $ 3,913, THE BRAIN FOUNDATION LAYTON HALL DR $ 458, A 202 LOYOLA FOUNDATION, INC DEMOCRACY LN #B $ 346, A 203 LOYOLA FOUNDATION, INC DEMOCRACY LN #A $ 346, HUMANE SOCIETY OF FX COUNTY INC 4057 CHAIN BRIDGE RD $ 1,446, THE BRAIN FOUNDATION ARMSTRONG ST $ 389, THE BRAIN FOUNDATION 3942 WILCOXSON DR $ 388, A THE LAMB CENTER 3160 CAMPBELL DR $ 2,423, HUMANE SOCIETY OF FX COUNTY INC 4057 CHAIN BRIDGE RD $ 1,446, $ 12,333,400

7 ORDINANCE NO AN ORDINANCE GRANTING A CHARITABLE REAL ESTATE AND PERSONAL PROPERTY TAX EXEMPTION TO CENTREVILLE LODGE NO. 2168, FOR CERTAIN REAL AND PERSONAL PROPERTY LOCATED AT 3529 CHAIN BRIDGE ROAD, FAIRFAX, VIRGINIA, MORE PARTICULARLY DESCRIBED AS TAX MAP PARCEL A WHEREAS, pursuant to Chapter 90, Article XII of the Code of the City of Fairfax, Virginia, the City Council of the City of Fairfax, Virginia, is authorized to exempt from taxation, by designation, real and/or personal property owned by qualifying organizations; and WHEREAS, in order to grant any such exemption by designation, both the organization seeking the exemption, together with City staff and the City Council of the City of Fairfax, Virginia, must comply with the requirements set forth in Chapter 90, Article XII of the Code of the City of Fairfax, Virginia; and WHEREAS, a request for exemption by classification was received by the City from Centreville Lodge No. 2168, an organization owning property located within the City of Fairfax, Virginia and such application has been reviewed, and a recommendation provided by the City s property tax exemption committee, pursuant to Section (b) of the Code of the City of Fairfax, Virginia; and WHEREAS, the City Council of the City of Fairfax, Virginia, has (i) conducted a required public hearing, which public hearing was noticed as required by Section (b) of the Code of the City of Fairfax, Virginia, and (ii) has considered each of the stated criteria in Section of the Code of the City of Fairfax, Virginia. NOW, THEREFORE, BE IT ORDAINED, by the City Council of the City of Fairfax, Virginia, that pursuant to Section of the Code of the City of Fairfax, Virginia, a charitable property tax exemption by designation is hereby granted to Centreville Lodge No. 2168, specifically for certain real and personal property located at 3529 Chain Bridge Road; and BE IT FURTHER ORDAINED that the specific use upon which the exemption is based is as follows: benevolent and charitable use; and BE IT FURTHER ORDAINED, that the continuation of the exemption granted hereby shall be, and is, expressly contingent upon the continued use of the referenced property in accordance with the above stated specific purpose; and BE IT FURTHER ORDAINED, that the exemption granted hereby shall be effective as of April 18, 2017, and shall continue until revoked by the City Council in accordance with Section of the Code of the City of Fairfax, Virginia, and, further, that Centreville Lodge No. 2168

8 shall comply with all other requirements of federal, state and local law insofar as it pertains to the exemption granted hereby. This ordinance shall become effective as provided by law. INTRODUCED: PUBLIC HEARING: ENACTED: Mayor ATTEST: Date City Clerk Vote Councilman DeMarco Councilman Drummond Councilman Greenfield Councilmember Miller Councilmember Schmidt Councilman Stehle

9 SAMPLE MOTION I MOVE TO INTRODUCE AN ORDINANCE GRANTING A CHARITABLE PROPERTY TAX EXEMPTION TO CENTREVILLE LODGE NO. 2168; FOR CERTAIN REAL AND PERSONAL PROPERTY LOCATED AT 3529 CHAIN BRIDGE ROAD, FAIRFAX, VIRGINIA, MORE PARTICULARLY DESCRIBED AS TAX MAP PARCEL A. I FURTHER MOVE TO WAIVE THE FIRST READING AND SET THE PUBLIC HEARING FOR APRIL 18, 2017.