Brewer reviews tax status of seniors facility Leach Home assessments appealed

BREWER – There is no question that the Ellen M. Leach Memorial Home is an asset to the community that provides housing and a number of services to senior citizens, most of whom are low income.

What remains unanswered is how much the independent living center, with its elegant and affordable housing, should pay in taxes.

The Leach Home board of directors is appealing two years worth of tax assessments – $91,017 for 2003 and $132,084 for 2004 – that they say are unreasonable since the facility is subsidizing rents for 80 percent of its clientele and is operating in the red.

“In fairness, we wanted to pay some taxes, but we never dreamed it would be assessed as a for-profit entity,” Frank McGuire, board president, said Thursday during a board of assessment review meeting concerning the issue.

The board met with several members of the Leach Home board, its appraiser and attorney Edmond Bearor of Bangor, along with City Assessor Mary Lynne Hunter and City Attorney Erik Stumpfel of Bangor.

Also in attendance was attorney John Taylor of Danbury, N.H., who manages the Massachusetts charitable trust established by Mabel Tyrell in 1926 that helped create the residential care facility and supplements the Leach Home budget on a yearly basis.

After discussing the issue for more than three hours, with sometime contentious questions concerning case law and assessment figures, the board decided to continue the meeting on June 1 in order to get numerous questions answered by legal counsel before making the final decision.

“I have four pages of questions,” Ron Harriman, assessment review board chairman, said to end the meeting.

The first phase of the Leach Home project was completed in 1995, with 30 modern and handicapped-accessible apartments.

The final phase, which brought the total units to 90, was completed in 2002.

The home offers a number of amenities, including a meal.

The city assessed the property exactly as it assesses all commercial properties, on a replacement value basis, and developed a property value of $6.9 million, Hunter said.

The Leach Home board asked independent appraiser Mark Plourde to evaluate the property and came up with a “fair market value” figure of $2.1 million, which takes into account the several different adjustments, including requirements that 80 percent of the units are rented to low-income people.

“We maintain the city of Brewer did not take into consideration those restrictions,” Bearor said.

With the city’s current tax assessment, 70 percent of the rental income goes toward property taxes, he added. The trust continuously has increased its support of operating costs over the last several years.

The expiration of a special city assessment on the home and the completion of a new wing at the facility in 2002, which added significant value, made the annual tax bill increase, Hunter said.

Taylor said increasing costs are making the home less attractive to the trust holders.

“It is at our discretion if we are going to continue to subsidize,” he said, adding later: “I’m trying to send you a warning.

“If we pull one-third of our funding, this project goes under,” Taylor said.

Because the Leach Home is unique in its creation, funding and operation, it’s unclear what case laws apply, and how statutes apply, Harriman said.

“There is nothing to fall back on,” he said. “It’s a tough place to be.”