By Jay Tokasz
The Buffalo News
January 31, 2009
http://www.buffalonews.com/cityregion/story/565477.html
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| Buffalo's St. Agnes Church, left, and Holy Name of Jesus are no longer being used for religious purposes and have lost their tax exemptions. |
It’s a tab most churches never would expect, but some area Catholic parishes are now paying property taxes on buildings they no longer use.
Five church properties in the city are currently being taxed. Four others were recently added to the city’s tax rolls and will get their first bills in July, in accordance with the city’s fiscal calendar. Other municipalities say they will follow suit.
The parcels previously were exempt from property taxes because of their religious purposes. Since they are no longer being used by a church or nonprofit entity, the properties lose their exemptions.
The closing of religious buildings is not uncommon, and some area government officials say such properties have been added without fanfare to the tax rolls in the past.
But the Catholic Diocese of Buffalo’s restructuring of parishes has brought the issue more into the forefront. The diocese over the past two years has moved to close 77 of its worship sites in eight counties, including 17 in Buffalo.
The taxes will cost parishioners tens of thousands of dollars — although the bills could have been much higher.
In most cases, the city dramatically lowered assessed values on vacant churches. The old assessments, determined years ago, had some church properties valued at more than $1 million.
Combined, the city tax bills for the closed Catholic parishes would have been more than $400,000 per year, according to calculations by The Buffalo News.
The new assessments, as well as the sale of three properties and continued exemptions at others, bring that figure way down, to below $50,000 per year.
The campus of St. Agnes Church in Lovejoy, for example, had been assessed for many years at $1.2 million.
But when the church was closed in 2007, city officials took a closer look at the property and determined its value was $246,600. Visitation Church’s assessment was reduced to $139,000 from $429,800.
“A lot of that has to do with the fact that, for years and years, an assessment on an exemptable parcel may not have been looked at,” said Martin F. Kennedy, city commissioner of assessment and taxation.
Instead of owing more than $25,000 in taxes, St. Katharine Drexel parish, formed from the merger of St. Agnes, Visitation and St. Francis of Assisi parishes, paid about $6,700 in 2008 to the city for a half-year’s worth of taxes. The county tax bill has yet to arrive.
Tax burden grows
That’s little consolation, however, for the people of St. Katharine Drexel, who already have spent nearly $ 200,000 over the past year on heating, maintenance and other “carrying costs” associated with the empty buildings of St. Agnes and Visitation.
“It continues to be a burden on the new community,” said the Rev. James Monaco, pastor of the new parish, which still uses the St. Francis of Assisi church site on North Ogden Street. “We had to take a loan out to help defer the cost.”
The diocese loaned the money through a special fund it established in 2007 with $2 million. Diocesan officials recently added another $1 million to the fund, which they hope will help parishes with their carrying costs for up to three years.
Parishes that sell property will be expected to repay the diocesan “advances” through income from the sales, said Steven D. Timmel, executive director of financial administration for the diocese, who acknowledged that some of the money might not get repaid.
In addition to St. Agnes at 92 Benzinger St. and Visitation at 1040 Lovejoy St., the church properties being taxed were Holy Name of Jesus Church at 1947 Bailey Ave., Precious Blood Church at 140 Lewis St., and St. Valentine Church at 522 South Park Ave.
Those churches offered final Masses in 2007 and were put on the city’s tax rolls in 2008. Nine churches that were closed in 2008 will receive tax bills later this year, in accordance with the city’s fiscal calendar.
The new status, while an encumbrance for parishioners, is at least a slight boost for municipalities, which have not generated property tax revenue from the parcels in decades.
A handful of other Buffalo churches that were closed continue to be used by the diocese in some fashion or are leased by non-profit groups, allowing their exempt status to remain. Three closed Catholic churches were sold in 2008 to other religious or nonprofit groups.
Five empty churches in Niagara Falls will be added to the tentative tax roll on May 1. Bills will go out later in the year. City Assessor Dominic Penale said he was reviewing property appraisals submitted by the diocese, as well as prior church sales in Niagara and Erie counties, to determine more up-to-date assessments.
Kennedy said his office arrived at its reassessments after considering factors such as current use, potential for reuse, square-footage, location, property condition and appraisals from private firms hired by the diocese.
The diocese, said Kennedy, played no role in determining the new assessed values — even though some of the assessments now are lower than the prices the diocese or owning parishes are asking for the properties.
The assessment of Queen of Peace Church at 1955 Bailey Ave. was changed from $880,800 to $220,000. The diocese’s asking price on the property, which includes a church, rectory, school and convent, is $330,000.
The diocese also provided appraisals of properties for the assessor in Lackawanna, where diocesan officials are disputing the city’s valuation of St. Barbara Church and accompanying property.
The city assessed the St. Barbara property on Ridge Road at $1.2 million, after the diocese offered to sell it for that much to city officials, who briefly considered converting the church into a new city hall.
The assessment isn’t out of bounds, Lackawanna assessor Frank Krakowski said.
“They have quite a lot of land, the priest’s rectory, the large parking lot,” he said.
The assessment figure, he added, dated back several years but was “never a problem until they had to pay taxes on it.”
But diocesan officials contend that the city’s figure was based on what the diocese originally advertised as the sales price of the property.
“We have an issue with that. Just because that’s what we’re asking doesn’t mean that’s what it’s worth,” said Steven D. Roth, associate director of buildings and properties for the diocese.
A private appraisal determined the value was significantly lower than $1.2 million, and the diocese is now asking $750,000 for the St. Barbara property, Roth said.
Assessment disputes
Leaving the assessment at $1.2 million could jeopardize a future sale, he added, because any religious or non-profit entity purchasing the parcels would be obligated to pay taxes until they prove to the city that they are a tax-exempt organization.
The issue of tax-exempt properties in Lackawanna was broader than Catholic churches, said Lackawanna Mayor Norman Polanski, citing $154 million worth of exempt property in the city of 20,000 people.
“That figure to me is a very large figure for a small community,” said Polanski, who wants a better inventory of the city’s roughly 7,000 exempt parcels.
The city is sending letters to all the owners of those properties, asking for proof that the parcels should be exempt from taxes, he said.
Contact: jtokasz@buffnews.com
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