April 30, 2012
By Thor Jourgensen/The Daily Item

Representatives for two of the biggest local tax-exempt organizations on Friday said the property tax money the city does not collect from them is offset by services they provide and salaries they pay to local residents.

The city values North Shore Medical Center’s Union Hospital complex on Lynnfield Street at $19.4 million, according to city assessing records, but the hospital does not pay property taxes to the city, since it is exempt under the law, along with religious institutions, public schools, colleges and other organizations, from paying property taxes except on a voluntary basis.

But hospital spokeswoman Laura Fleming pointed out the hospital “provides enormous support” to Lynn through various channels.

“Each community served by Partners (Healthcare) and NSMC is unique so the model for serving each community is unique: In Lynn, we provide millions of dollars in program and capital support for the health center, Girls Inc., the city and other community groups.”

“In 2012 alone, grants totaling $3 million were made to the city and (Lynn Community) Health Center. For instance, we provided a $240,000 grant to the city for wellness and exercise,” Fleming added.

She said North Shore Medical Center provided $15 million in uncompensated care for people from Lynn in 2011.

“No community on the North Shore receives more substantial community benefit from North Shore Medical Center than Lynn,” Fleming said.

The city received $419,000 in-lieu of tax payments last year and will receive slightly more than that amount this year, according to city Assessing Director Peter Caron. Most of that money is paid, according to city records, by agencies that have obligations under state law to make payments in lieu of the property tax-exempt status instead of doing so voluntarily.

The Economic Development and Industrial Corporation paid $370,000 of the in lieu payments collected by the city this year. EDIC Executive Director James Cowdell said 2.5 percent escalating payment negotiated almost 30 years ago between the city and EDIC increased the agency’s payment this year over the $345,400 it made in-lieu payments in 2011.

The 2012 payment includes $1,900 paid by EDIC on the harbor side pier it maintains. Another $26,000 payment made in fall and spring allotments represents an in lieu payment on the JB Blood Building, an EDIC property on Wheeler Street. Most of the agency’s payments to the city are made on two downtown residential buildings: Harbor Loft 1 in Liberty Square and Harbor Loft 2 on Washington Street.

“It’s clear it’s the largest in lieu payment to the city,” said Cowdell.

Lynn Community Health Center Executive Director Lori Abrams Berry said the Union Street-based facility, like NSMC, makes an investment in the city. Valued at $5.34 million, according to city assessing records, the center, including its new addition, are not taxed.

“I know of no community health center in Massachusetts making payments in lieu of taxes because of the extensive services they provide to communities,” Berry said.

All Care Visiting Nurse Association President Shawn Potter in March said the agency and city have been structuring an in lieu payment plan for All Care’s Market Street headquarters. Two smaller organizations, Raw Art Works and Abbott House, make in lieu payments with the downtown arts organizations.

Raw Arts paid $4,100 in in lieu payments in 2011, according to city records, and Abbott House paid $15,000 last year to the city. Caron said the nursing home’s change from a for-profit to charitable organization several years ago altered its tax status but did not prevent Abbott House’ owners from crafting an in lieu arrangement with the city.

Other major organizations exempt under the law from property tax payments include Greater Lynn Senior Services, Girls Inc., and North Shore Christian School as well as the Knowledge Is Power Program school currently building a school in the Highlands.

Caron said Boston city officials have been studying a task force proposal calling for tax-exempt organizations to pay an amount equivalent to 25 percent of their assessed value. That percentage, Caron said, represents roughly Boston and Lynn’s share of tax dollar spending on essential services like police, fire and public works. The Boston task force recommended exempt organizations make half their payment and contribute the rest through donated services.

That proposal aside, Caron said in lieu tax payments by exempt organizations are, ultimately, voluntary.

“They have to be approached: If they say ‘no,’ it’s no,” he said.

City Councilor at large Hong Net cautioned against an aggressive city policy to push for in-lieu payments.

“These organizations depend on donations. In this economy, it’s hard for them,” he said.

Thor Jourgensen can be reached at tjourgensen@itemlive.com.