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Nonprofits seen as gold; Big property values that go untaxed draw interest.

Byline: Nick Kotsopoulos

Whenever it comes time to set Worcester's tax rates, city councilors often bemoan the large number of tax-exempt properties in the city.

They contend that is robbing the city of much-needed tax revenue, thus forcing homeowners and commercial property owners to carry a greater share of the local tax burden.

More often than not, councilors like to chide the larger nonprofit institutions, such as the local colleges and hospitals, whenever they buy properties and take them off the tax rolls because of their tax-exempt status.

A report prepared by City Assessor William J. Ford underscores the impact tax-exempt institutions, especially the local colleges, have on the city's ability to generate tax revenues.

As part of his report, Mr. Ford was asked to calculate the potential dollar amounts of property tax revenues from nonprofits and colleges across the city that are not currently participating in ongoing payment-in-lieu-of-taxes agreements with the city.

He pointed out that the local private colleges -- Assumption, Becker and the College of the Holy Cross, which does underwrite a portion of the cost for the city's mobile library -- that do not have so-called PILOT agreements with the city have a combined total assessed property valuation of $468.4 million.

Based upon those assessed valuations and the terms of PILOT agreements the city has with other colleges, those valuations would yield a PILOT payment value of $2.1 million, using the city's single tax rate of $22.75, according to Mr. Ford.

In addition, he said, the land value of the properties owned by the state for colleges and universities, such as Worcester State University, University of Massachusetts Medical School and Quinsigamond Community College, totals $512.9 million.

Using the same formula as he used with the private colleges, Mr. Ford said similar PILOT agreements with the state colleges and universities would yield a PILOT payment value of $2.3 million.

So, just with the colleges alone, you're talking about $4.4 million in potential tax revenues.

Speaking of tax-exempt property, the city is by far and away the largest owner of such properties in Worcester, according to Mr. Ford's report.

It owns more than 380 properties that have a total assessed valuation of $1.37 billion. In fact, city properties account for about 40 percent of the total tax-exempt property in the city.

That total includes public school buildings, fire stations and other public safety facilities, parks, sewer pumping stations and other municipal buildings.

In addition, the Worcester Housing Authority and the Worcester Redevelopment Authority, government agencies that operate independently of the city, own properties that have total assessed valuations of $256.6 million and $18 million, respectively, according to Mr. Ford's report.

Meanwhile, the federal government owns four properties in Worcester that have a total assessed valuation of $36.8 million, while the state owns 123 properties that have a total assessed valuation of nearly $1 billion.

Those classified as state-owned properties include ones owned by the Massachusetts Port Authority, such as Worcester Regional Airport, the Worcester Regional Transit Authority, and the state colleges and universities.

There are also more than 300 properties owned by religious entities that have a total assessed valuation of $437.9 million, according the Ford report.

Overall, tax-exempt properties account for more than 25 percent of all properties in Worcester.

The City Council, which requested the report, will take it up at its meeting tonight.

The city and the U.S. Postal Service have agreed on a new lease agreement for parking services at the Major Taylor Municipal Parking Garage.

Paul J. Moosey, commissioner of public works and parks, said the agreement is for five years and replaces the lease agreement that expires March 31.

The deal gives the U.S. Postal Service non-exclusive use of 245 parking spaces in the garage at an annual rental rate of $216,000.

The Major Taylor parking garage is near the East Central Street post office.

For the first time since becoming city manager two weeks ago, Edward M. Augustus Jr. has had to recuse himself from an item going before the City Council that is related to his previous employer, the College of the Holy Cross.

City Solicitor David M. Moore had to sign off on a report done by City Assessor William J. Ford, because the report included property assessment information on the local colleges requested by the council, including information on Holy Cross.

Mr. Augustus has been granted a nine-month leave of absence from his position as director of the office of government and community relations at Holy Cross. He has expressed his intention to go back to the college after his nine-month stint as city manager.

As a result, the City Council has designated Mr. Moore as the city's point person for the time being for all city matters involving Holy Cross.

City Manager Augustus has appointed Jennifer Carey and Thomas Conroy to the Worcester Arts Council.

Their appointments are for terms to run through 2016.
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Title Annotation:Local
Author:Kotsopoulos, Nick
Publication:Telegram & Gazette (Worcester, MA)
Date:Jan 21, 2014
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