Commission Declines to Make Recommendation to City Council on Disputed Tax Issue
Bob Volpe
A highly contested bid for a housing project, proposed by Andrew Wommack Ministries (AWM), with significant tax waivers that exceed $5 million according to some planning estimates, will land in the laps of the Woodland Park City Council next month.
Following a marathon meeting last week, encompassing a standing-room-only crowd, the Woodland Park Planning Commission essentially declared a “No Decision” verdict, and issued no recommendations on AWM’s pursuit for a major student housing project, which would maintain the same tax-exempt status as the ministry development. A previous plan called for the housing to be a private venture, making it eligible for significant property tax revenue for local jurisdictions.
The commission held a special meeting last Tuesday to hear two issues planned by Charis Bible College, which is a central part of Andrew Wommack Ministries in Woodland Park.
The first issue was a PUD (Planned Unit Development) amendment to revise the dimensional standards to allow a height increase from 35-feet to 45-feet for student housing.
The second issue was to remove a past condition of approval that the temporary student housing be privatized through either a lease agreement or some other arrangements so that it can be separately taxed. This condition was previously proposed so that the city would not impose an impact fee,
The current agreement limit set of 35-feet was for student housing to be constructed as a three story building housing about 120 students. Planning Director Karen Schminke gave the staff report on this issue and concluded that staff recommend approval of the change.
Charis’ representative from NES Landscape Architects, John Romero, made the case that the 35-foot limit would require extensive re-design of the housing due to the topography of the land and gabled roof line and that without the change, the roof would have to be basically a flat roof. He also mentioned that there is already a variant on the height requirement for the parking structure that is 54-feet.
The commission debated the amendment, but eventually recommended and passed the approval of the change.
The second issue drew much more comment and debate due to previous discussions. In 2012 when the planning commission and city council discussed the construction of student housing on the Charis compound, a verbal agreement was reached by a former spokesman for Charis and Andrew Wommack Ministries that the student housing would be outsourced, and such would be liable for significant property taxes. According to some estimates, these taxes could amount to more than $5 million over a designated period.
This original for-profit housing plan was part of a compromise, so that the city would not impose an impact fee, an idea that a few elected leaders at the time favored.
Now that the construction is nearing ground breaking Wommack Ministries wants to pursue the construction in-house and be exempt from property taxes.
Attorney for Charis, Andrew Nussbaum, gave a compelling argument that taxing Charis, which is a 501 (3) (c) organization, is tax exempt and violates both state and federal statutes. State and federal law supersedes law imposed by cities.
Nussbaum said, “No non-profit college in Colorado, including colleges in small mountain towns like Fort Lewis College, have ever been asked to give up their tax-exempt status in exchange for land-use approval. Charis is not asking for special treatment.” Nussbaum’s listed a litany of reasons why the tax issue is illegal and made a thinly veiled threat that if the city tried to enforce taxing Charis, that they would sue the city.
Debate among the commissioners remained fairly civil and attempts were made to try to iron out some kind of compromise that would satisfy both parties. But Nussbaum insisted the tax issue be removed entirely.
Avoiding a Court Fight
It is unclear why an amendment, dealing with tax implications, was brought before the planning commission, as this panel has no authority to rule on these matters. Ultimately, the commission voted to make no recommendation to the city council on Charis’ housing change request. The commission cited the fact that they lacked power to change the religious character of Charis’ student housing or Charis’ tax-exempt status under state law.
One factor is clear. The city attorney, Nina Williams, has advised the city to try to avoid litigation. If the city is sued by Charis over the tax-exempt status, it will be enormously expensive for the city to defend and there is a good chance the city will lose in court.
The issue of whether to maintain the position of requiring Charis to outsource the construction of student housing or to remove it now heads to the city council. When this reaches council, there will be attempts at reaching some kind of agreement that satisfies both parties. One suggestion is that Charis pay a fee in lieu of taxes.
This idea of an impact fee was proposed during the initial planning stages of the Charis development. Concerns have been raised by local emergency service groups, such as the Northeast Teller County Fire Protection District, and other entities, regarding the added impacts they face from this project.
The issue will be heard on July 21 in city council chambers.
