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Kirkwood School District may lose millions in tax fight

8:24 AM, Feb 8, 2013   |    comments
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By Leisa Zigman

KIRKWOOD, Mo. (KSDK) - A battle is heating up in Kirkwood pitting the interests of children and their education against the interests of seniors and their retirement community.

At issue is whether a luxury senior living facility should be exempt from paying property taxes.

"Over ten years we could lose almost $7 million of revenue if Aberdeen Heights is granted non-profit status," said Dr. Tom Williams, Superintendent of the Kirkwood School District.

Aberdeen Heights is a senior living community that its executive director proudly showed off. Its elegant hallways take you to the cafe and lounge, a work out facility, restaurant style dining, aquatics center, and boasts high end apartments on par with luxury condos.

To live here, residents pay an entrance fee which its executive director says, averages $450,000.

Monthly fees range from $2,000 to $6,500, depending on whether the person is in independent living, assisted living, memory support, or skilled nursing.

"If it acts like, looks like, walks like a for-profit organization, please pay your taxes," said Scott Stream, Kirkwood School Board President.

Kirkwood school officials are furious with owners of Aberdeen Heights because in December, after a year in business, they asked St. Louis County to grant them tax-exempt status.

"We are the 18th community of Presbyterian Manors. All have been tax exempt and exempt from property taxes," said Scott Polzin, Executive Director of Aberdeen Heights.

Presbyterian Manors of Mid America owns Aberdeen Heights and 17 other facilities. While they are all not-for-profits, tax forms show the facilities generated revenues of $98,000,000 last year.

In its request for tax exemption the company checked boxes confirming Aberdeen Heights is religious and charitable.

But during our interview Polzin said, "We don't have a financial relationship with the Presbyterian Synod."

Still, he explained the mission of Presbyterian Manors is to provide Christian based retirement living. He added, if someone could no longer afford to pay monthly fees, its charitable mission would kick in.

"In the 63 years of operation, Presbyterian Manors has never evicted or thrown someone out of their community for inability to pay, "said Polzin.

Last year he said, Presbyterian manors provided $3.4 million in charity care to residents at its 17 facilities.

According to Polzin, only one resident out of nearly 300 at Aberdeen Heights qualifies for charitable status, but he expects that number to grow as the new facility and its residents age.

While Polzin says the intent had always been to operate as a tax-exempt facility, school officials counter by saying that was not what was presented in its official statement.

When the company first pitched the idea of Aberdeen Heights to the City of Kirkwood, it presented a 350 page document explaining why issuing bonds would be a great idea. On page 165 it states that it fully intended to pay property taxes and estimated taxes this year alone would be $935,000.

Polzin said that line item may have said property taxes but that wasn't the intent. He explained, "there would have never been intent to pay taxes or property taxes.... this is the money that we would budget in a feasibility study to cover any payment in lieu of taxes."

When asked why that wasn't explained in the official statement, Polzin, who wasn't employed at the facility at the time said, "I don't know."

He added, Presbyterian Manors has offered to pay the Kirkwood School District more than $400,000 in lieu of paying property taxes. The district estimates property taxes would generate $700,000 a year.

Both sides have a lot at stake when the Board of Equalization hears the case in April. If the Kirkwood School District loses, the district will get no money instead of a guarantee of more than $400,000 a year.

If Presbyterian Manors loses, all of its facilities could have its tax exempt status revoked. Observers say this case will be closely watched by all other tax exempt businesses and schools because millions of dollars are in play.

KSDK

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