Treasurer tells First Baptist to pay taxes

The city treasurer said he will collect $81,000 in delinquent taxes owed by a Norfolk church in spite of initially being pressured by some city leaders to back off.

The First Baptist Church on Bute Street owes the money for a senior housing complex it owns on Park Avenue, city treasurer Thomas W. Moss Jr. said. The church has not paid taxes on the apartments since July 1, 2003, when they were deemed taxable, City Assessor Deborah Bunn said.

Mayor Paul Fraim asked City Attorney Bernard A. Pishko earlier this year to draft an ordinance that, if approved by the City Council, would forgive the church’s tax bill and grant the apartments tax-exempt status.

As a result, the city attorney’s office asked Moss to hold off on collecting taxes until the council acted.

However, Moss said no. Fraim recently reversed his stance. He said he erred in agreeing to forgive the taxes before knowing all the circumstances.

“That’s my fault,” he said. “I was under the impression that it was part of their ministry. I did not appreciate the history of all of this.”

Moss’s office has been under fire for failing to adequately pursue delinquent real estate taxes. A recent Virginian-Pilot story indicated that the city failed to collect millions of dollars in delinquent taxes because of outdated and passive collection practices.

First Baptist’s tax bill was among those that had not been aggressively pursued. “We’re diligently trying to collect these taxes now,” Moss said.

In response to a Freedom of Information Act request from The Virginian-Pilot, Moss provided correspondence on the issue, including an e-mail from Commissioner of Revenue Sharon McDonald in April of 2009 asking Moss to forgive interest and penalties.

In the e-mail, McDonald said she was asked to intervene by the Rev. Robert Murray, pastor of the church. Murray also asked the mayor for help, Fraim said. Murray could not be reached at the church last week.

If the city had granted the church tax-exempt status on the apartments, it would have set a precedent on the issue.

In 2001, Norfolk leaders denied a request from the United House of Prayer For All People for a tax exemption for senior housing that it owns. The church sued and lost in Norfolk Circuit Court, then appealed to the Virginia Supreme Court, which refused to hear the case. Circuit Court Judge Lydia Taylor ruled that the city can tax church-owned property if it operates as a private business.

Bunn said First Baptist Church applied for tax exemption on the apartments earlier this year. She said she denied that request six months ago.

“We found that they charge market rates to their tenants,” she said. “If you can’t pay rent, you can be evicted. They are not subsidized. So we did not view this as a charitable endeavor.”

That left the council as the only entity that could grant tax relief.

Fraim’s proposal likely would have received a lukewarm reception from the rest of council.

Councilman Barclay C. Winn was noncommittal, but said: “We have to be very careful setting this kind of precedent.”

Councilman Paul R. Riddick, in whose ward the church operates, said he would support forgiving the taxes.

But Vice Mayor Anthony L. Burfoot, also a deputy treasurer, was opposed saying giving them tax exemption status “would mean that every developer could open a storefront church and ask that their apartments be exempt.”

Harry Minium, 446-2371, harry.minium@pilotonline.com