In the ongoing battle between Syracuse's large nonprofit institutions and the city's tax authorities, Le Moyne College has taken a bold step by suing the city to secure tax exemptions for 20 student housing properties. This move, which follows a series of disputes over property taxes, highlights the complex relationship between these entities and the potential impact on the local community.
The Battle for Tax Exemption
Le Moyne College's acquisition of 20 single-family homes in 2023 was driven by a dual purpose: to provide an alternative to dormitory living for students and to stabilize the Salt Springs neighborhood, which was at risk of deterioration. The college's efforts to improve the neighborhood's housing situation are commendable, but they have led to a legal battle over taxes.
The college's vice president for finance and administration, Joe Grasso, explains that they have tried to resolve the issue collaboratively with the city's Board of Assessment Review (BAR) but to no avail. The BAR has consistently denied Le Moyne's requests for tax exemptions, prompting the college to take the matter to court.
A Complex Ownership Structure
What makes this case particularly intriguing is the ownership structure of the properties. Le Moyne created a limited liability company, Phins Management, to purchase and manage the homes. This subsidiary is a registered nonprofit, and its employees work for the college. However, this arrangement has raised questions about the properties' eligibility for tax exemption.
At a BAR meeting, member Joseph Saya suggested that transferring ownership from Phins Management to Le Moyne College directly might resolve the issue. He believes that the properties' nonprofit status would be more readily accepted if they were titled under the college's name.
Financial Considerations
Le Moyne's decision to purchase and renovate these homes was not without financial risk. The college spent $4.1 million to acquire the properties and an additional $500,000 on renovations. However, records show that the homes operated at a loss of $91,000 last year. This raises questions about the sustainability of the college's student housing venture and its ability to generate sufficient revenue to cover costs.
A Broader Trend
The dispute between Le Moyne College and the city of Syracuse is not an isolated incident. Syracuse University has also been embroiled in similar battles, fighting for years to maintain tax exemptions for its student center and a sorority house it purchased. These conflicts highlight a broader trend of tension between nonprofit institutions and local governments over property taxes.
The Impact on the Community
While the legal battles continue, it is important to consider the impact on the local community. Le Moyne College's efforts to stabilize the Salt Springs neighborhood and provide affordable student housing are commendable. However, the city's reluctance to cede potential tax revenue raises questions about the balance between supporting nonprofit institutions and ensuring fair revenue generation for the municipality.
Conclusion
The lawsuit filed by Le Moyne College against the city of Syracuse sheds light on the complex dynamics between nonprofit institutions and local governments. As the case unfolds, it will be interesting to see how the court rules and whether a resolution can be reached that balances the needs of the college, the city, and the community as a whole. This ongoing battle highlights the importance of finding a sustainable solution that promotes the well-being of the neighborhood and the financial stability of the college.
