According to a Winchester Star article back on Friday, January 30, 2009:
Shenandoah University has $66.8 million in assessed property that is exempt from taxes. That’s about $454,720 in tax revenue each year that the city doesn’t see.
Winchester Medical Center has property valued at $314.1 million in the city. If it were taxed, the city government would collect about $2.1 million in annual revenue.
Winchester Medical Center has property valued at $314.1 million in the city. If it were taxed, the city government would collect about $2.1 million in annual revenue.
Council seeking ‘balance’ on taxes
By Eric Beidel
The Winchester Star
January 30, 2009
Winchester — The new City Council has drawn a line in the sand.
The nine-person council has four first-time members, and they’re on a mission to find money and use it more wisely.
“You’re going to see a lot more logical economic decisions,” said John A. Willingham, who was elected to the council Nov. 4.
During a recent retreat, the councilors came up with a new mission:
“To provide a safe, vibrant, sustainable community while striving to constantly improve the quality of life for our citizens and economic partners.”
“Sustainable” is the key word, they said, and it is something that can’t happen if they don’t take a hard-line approach to money — the dollars that come in, the dollars that go out, and the dollars that never materialize.
The latter refers to real estate tax breaks handed out by previous councils.
As of the latest general assessment, the total value of property in the city tops $3.8 billion.
About 20 percent of those properties — at a total value of $747.5 million — are exempt from paying real estate taxes.
Winchester’s real estate tax rate is 68 cents per each $100 of a property’s assessed value. That means the owner of a $200,000 home, for example, pays $1,360 in real estate taxes each year.
Two weeks ago, the new council heard its first request from an organization that hopes to avoid paying the real estate tax.
Shenandoah Valley Community Residences recently bought a home at 809 Chelsea Drive. The nonprofit organization offers fully staffed residences for mentally handicapped adults.
The group has another home in the city that was granted a property tax exemption by a previous council.
But the new council decided that it needs to draw the line. As it stands now, Shenandoah Valley Community Residences must pay the taxes — about $3,600 a year — on the Chelsea Drive home.
“We’ve got to get this scale back in balance,” Councilor Les C. Veach said.
SU and WMC
State law exempts several kinds of entities from paying real estate taxes — governments, schools, and many nonprofit organizations.
However, just because an organization is a nonprofit doesn’t mean the city government must exempt it from paying real estate taxes. The organization must apply for an exemption and go before the council.
Aside from government-owned properties, the biggest tax-exempt entities in Winchester are a university and a hospital.
Shenandoah University has $66.8 million in assessed property that is exempt from taxes. That’s about $454,720 in tax revenue each year that the city doesn’t see.
Winchester Medical Center has property valued at $314.1 million in the city. If it were taxed, the city government would collect about $2.1 million in annual revenue.
The city government has approached WMC about paying real estate taxes because of its Wellness and Fitness Center, a branch of the hospital that opened in September and offers services for profit.
The center has a store that sells fitness gear, and offers fitness classes for a price. The hospital pays business taxes on those for-profit operations, but does not pay real estate taxes for the facility on WMC’s Amherst Street campus.
“It hasn’t been part of our 100-plus-year history here to be asked to pay property taxes,” said Wes Williams, vice president of marketing and community relations for Valley Health, the corporate parent of WMC. “It’s all on the same hospital campus, so the whole part of the area would be exempt.”
Some on the City Council see it differently, especially after watching other fitness businesses in the area flounder and close.
The city once had several Curves locations. It now has one.
PERC Fitness, formerly the Downtown Athletic Club, closed its doors last month. Owner Caren Werlinger said then that a dire economy and competition from WMC’s fitness center forced her hand.
Valley Health is a large nonprofit organization competing against small independent businesses, Willingham said.
“At some point, there has to be equal footing,” he said. “Continuing to provide tax exemptions at the pace we have in the past will not lead us to our mission of creating a sustainable community.”
“Tough decisions”
Of all the real estate in the city, about 20 percent has been granted exemptions.
In Fredericksburg, a city about the same size as Winchester, about 15 percent of its $4.8 billion in property is exempt from paying real estate taxes.
“I think it would be wise for us to look at all the properties that have been granted tax exemptions in the past to see if they’re still what they said they were,” Councilor Art H. Major said.
The list of exempt properties has some discrepancies, most of which have been corrected. Still, the list has some properties that officials don’t know much about — or when an exemption was granted.
“It’s worth the effort to go back and look,” Major said, adding that even revoking previously granted tax exemptions could be an option.
“There are going to be some tough decisions to make,” he said. “We only have a certain capacity — and I’m not sure what that capacity is — to sustain ourselves.”
Those applying for tax breaks in the future have been warned.
“I don’t see us granting tax exemptions like in the past,” Willingham said, “if any at all.”
— Contact Eric Beidel at
ebeidel@winchesterstar.com
