LA Independent: Seize orgs - property may be seized over back taxes
13 Feb 2002
Scientology property may be seized over back taxes
Los Angeles Independent
February 13, 2002
By Leigh Bailey
According to officials with the Los Angeles County Tax Assessor's Office, the Church of Scientology is in danger of having at least one of its Hollywood properties repossessed for failure to pay property taxes.
The Scientology property at the corner of McCadden Place and Hollywood Boulevard, which the church uses as an "testing center" and residence for some of its members, is nearing the five-year mark for failure to pay property taxes, and as a result, could be subject to county auction in July of this year, if the taxes owed are not brought current, officials say.
Ernie Goldberg of the assessor's office says that several of the Church of Scientology's properties are on the county's books as being in arrears on their property taxes. The back taxes owed on the properties are now in the millions of dollars.
Goldberg says the Church of Scientology has filed for exemptions on property taxes owed to the county on the basis of their being a nonprofit organization.
"A nonprofit can file for religious or charitable reasons or scientific, and can file for an exemption on that basis," Goldberg says, but it is up to the county to decide whether or not the exemption is justified.
In the meantime, Goldberg says, the county expects the property owner to pay all relevant taxes, which would then be reimbursed should the county find in favor of the property owner's exemption.
A spokeswoman for the Church of Scientology says the organization is confident that its tax status will be resolved and will not result in the sale of any of its property.
"The church is in close communication with the county on property tax matters, as is evidenced by the partial exemption [recently granted] on church housing," says Linda Simmons Hight, church spokeswoman.
Goldberg says that the county has granted the organization "nonprofit status" on the McCadden property, but the property may still go on the auction block if the Scientologists do not settle with the county and pay all taxes owed.
"I believe they have made payments on some years and some years not," he says. Until the tax bill is rendered current, the property is still subject to sale.
Hight maintains that the church has "continued to pay substantial assessments" to the county "on non-exempt properties.
"We are confident that all outstanding property tax matters with the county will be resolved in the near future," she says.
Kerry Morrison, executive director of the Hollywood Entertainment District, says she has not received any of the business improvement district funds that should have been paid on any of the Scientology properties for the last five years. The funding for the BID -- or BID assessment fees -- are paid to the organization by the county when the property taxes are collected.
Morrison estimates that the money owed to the BID by the Scientologists totals more than $100,000, and dates back to "Phase 1" of the business improvement district's existence. Currently, the BID is in "Phase 3."
Morrison says the Scientologists' failure to pay the BID assessment fees have affected the BID's ability to provide service to the area.
"We had to curtail security. We never implemented a summer, high-season deployment [last year], which is what we typically do from the end of June to Labor Day, because we simply didn't have the funds to do so," Morrison says.
While the Church of Scientology is not the only property owner in arrears, its tax bill is the largest, Morrison says, and, as a result, the most crippling to the BID budget.
According to Morrison, the BID has been in negotiations with the Scientologists about delinquent assessment fees since last year and she believes that the organizations had reached an agreement.
Morrison says the Scientologists "brought their position to the [BID] steering committee almost a year ago, when the steering committee...asked for fairly sizable discount" on their assessment fees. Morrison says the committee only granted partial exemptions to the organization.
"In all fairness, [the Scientologists] have been in negotiations with county for several years with respect to property tax status," Morrison says. "They have been working on seeking a decision to have certain properties declared exempt, and as a result, our BID assessment has been tied up in these negotiations."
But, she says, operating the BID becomes increasingly difficult without the assessment fees of one of the major property owners in the Hollywood area.
"My impression [of the tax liability laws] is that you're supposed to pay now and dispute it later," Morrison says.
Leigh Bailey can be reached at (323) 932-6397, ext. 153, or by e-mail at email@example.com
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