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Beltrami County Board: Habitat request to abate property taxes rejected

Failure to win approval to abate $10,000 in delinquent Beltrami County property taxes means Northwoods Habitat for Humanity will build one less house this year.

"I throw myself at your mercy," Judy Reese, Northwoods Habitat for Humanity president, told county commissioners Tuesday evening. "These are the working poor."

Habitat for Humanity in February 2008 purchased the former IBI property in the Bemidji Industrial Park, which houses its ReStore operation that collects and sells building supplies.

As a non-profit organization, Northwoods Habitat applied and was approved for tax-exempt status for 2009 property taxes and thereafter. But there is $10,222.36 in property taxes, penalties and interest due for 2008, which it was asking the County Board to abate Tuesday.

"We should be supportive of Habitat for Humanity because they are doing a part of our mission," said Commissioner Jim Heltzer, referring to several affordable housing programs the county supports.

"They will build one less home because of the tax, obviously, and that most affects ... low-income people just trying to get by," Heltzer said. "And these people pay property taxes."

Reese said Northwoods Habitat plans in 2009 to work on five homes -- three of them funded. "The $10,000 would make a substantial impact on our homes," she said.

But Heltzer's motion to allow the 2008 property taxes to be abated died for a lack of a second, making the tax bill still due. "Deader than a doornail," he said of his motion.

The remaining three commissioners -- Commissioner Jack Frost was absent -- said granting the abatement would create a new precedence against county property tax abatement policy.

Joe Skerik Beltrami County chief deputy assessor, said Northwoods Habitat's request was treated no differently than any similar property transaction by a non-profit organization.

"This is not uncommon and it's the nature of the business," Skerik said. "A non-profit may apply (for tax-exempt status) the first year, but the tax bill is still out there from the previous year before they became eligible for tax-exempt status."

It doesn't matter when the agency applies, the previous year and under the previous owner is still a due bill, he said. And while the county has received similar requests to abate such taxes, it has never granted them.

County Administrator Tony Murphy said inclusion of 2008 property taxes should have been part of the property sale negotiations with IBI.

Reese admitted Northwoods Habitat missed out on including that the seller pay 2008 property taxes, but now it's stuck with a $10,000 bill. She said that "$10,000 is a third of the cost to rehab a home, or 12.5 percent of building a new home. We have build 20 homes, and they have paid $20,000 a year in property taxes."

The county allows abatement of taxes for two reasons, Reese said, for clerical error and in hardship cases. "This would be an extreme hardship for us."

Part of the bill, about $800, is for sewer charges and Reese said Northwoods Habitat would pay that bill.

County Board Chairman Jim Lucachick, a self-employed architect, said he has worked with Habitat for Humanity to design houses and was project supervisor for three homes, "yet I have a little bit of a problem."

The Habitat board of directors approved the sale and the property is used for its ReStore operation "as a way to generate more money for Habitat for Humanity," not to construct homes, Lucachick said.

Commissioner Joe Vene also made it clear that while the County Board supports efforts to further affordable housing, what Northwoods Habitat was requesting would create precedence under county policy, which commissioners would not do.