This story has been updated to include additional information.
Another day, another “messy circumstance” for the city to sift through.
On Wednesday night the City Borough of Juneau’s Assembly Finance Committee passed a motion 5-1 to move for the Full Assembly to determine whether the city will provide an out-of-budget grant of more than $12,200 to the Glory Hall — amended to pull the funding from the city’s affordable housing fund instead of general funds — to offset its 2022 property taxes after the nonprofit was hit with the unexpected tax burden.
“I think it’s the best solution to the little messy circumstances we have,” said Rorie Watt, CBJ city manager. “I think the best solution is that they pay their taxes and we give them a grant.”
CBJ allows for property tax exemptions for nonprofits that hold a community purpose like the Glory Hall, however, that exemption only applies when the property is being used for community purposes — which is determined by a city assessor at the beginning of each year.
If the nonprofit owns vacant land not being used for their community purposes — in this case, the Glory Hall’s former shelter on South Franklin Street was publicly listed for sale and vacant as determined by the city’s assessor on Jan. 1 — it means the building is accountable to pay property taxes on it.
The “messy circumstances” come into play after Glory Hall staff said the building was being “partially” used for its nonprofit community purpose in January, according to the city, which leaves the city in a pickle to determine if “partial” use means a partial exemption or if the building should remain taxable to a certain degree.
Chloe Papier, interim executive director for the Glory Hall, largely disagrees with the accuracy of the city’s assessment that led to the situation.
Papier said in an interview Thursday afternoon that the building was being used to “full capacity” as it was in previous years, and the city assessor inaccurately determined it to be vacant based off “assumption” and “opinion.”
“I think the city has made a decision that storage is not a charitable use, which I have always disagreed with,” Papier said. “I think it’s inaccurate and we’re using the full building for charitable use. We have always said that our building has been completely used for a nonprofit purpose, we never said partially.”
Papier also said a memo included in the committee’s meeting packet, the city inaccurately describe the Glory Hall as a “community purpose non-profit organizations” which she said is incorrect. She said the Glory Hall is a “charitable-use organization” and falls under a different category which she said is the reason the organization did not apply for tax exemption and why she said believes the city’s decision to apply property tax holds no legal basis.
The CBJ Finance Committee decision to keep the nonprofit accountable for the property taxes with the caveat that the city will then provide a grant to offset property taxes would mean it would be an expenditure not previously outlined in the city’s budget.
Assembly member and Finance Committee Chair Carole Triem said she doesn’t like the idea of it and was the sole member to object to sending the decision to the full Assembly. She said her reasoning was based on previous criticism from the public about the Assembly’s decisions to OK multiple out-of-budget expenditures in the past.
“The fact that we never say no to anybody, it almost feels like we’re being extorted,” she said. “I realize this is the least bad option, but I don’t like it.”
However, according to a memo on the topic written by Finance Director Jeff Rogers, the decision to not provide a grant would mean a reduction in the amount of money available for the nonprofit to spend on their sheltering operations due to its burden of being accountable to pay the “unexpected” property taxes.
“Admittedly, this may feel like an obtuse solution, but it is the only practical way to keep the Glory Hall whole,” Rogers wrote.
Not providing a grant would also mean the city’s finance department would likely need to work through the appeal process that would come with it instead, which Watt said would be difficult given the department’s current shortage of staffing.
[City announces hours change for cash office and sales tax office starting Sept. 19]
“It’s not my favorite idea but I think it’s the least bad decision, it poses a lot of gnarly questions that would be unsatisfying to all parties,” he said about the logistics of a “sticky” appeal process instead.
Assembly members Wade Bryson, Maria Gladziszewski, Christine Woll and Michelle Bonnet Hale all voted to send it to the full Assembly, with Hale making the call to amend the motion to pull the money from the city’s affordable housing fund rather than the general funds previously outlined.
“I’m fine — it’s the least bad option. It’s hard to handle, but it’s the least bad option,” Woll said.
• Contact reporter Clarise Larson at clarise.larson@juneauempire.com or (651)-528-1807. Follow her on Twitter at @clariselarson.
