$6 billion in property exempt from taxes in Buncombe

As a forest fire raged across eastern Buncombe County earlier this month, the state and local communities poured firefighters, equipment and other resources into squelching the blaze.

The end cost to taxpayers for everything used to stop the fire that burned through Ridgecrest Conference Center land was more than $400,000. The cost for Ridgecest: $0.

Along with $6 billion worth of property specially earmarked throughout the county, the Christian conference center pays no taxes. The property values were part of a special analysis done by the Citizen-Times with the county tax department.

The legally granted tax exemptions and tax deferments go to organizations falling into categories including governmental, religious and medical. The tax exemptions — 17 percent of the county's assessed land value — can put a strain on local resources, some say, including Black Mountain Mayor Mike Sobol.

"When you start totaling up all the places, it's significant," said Sobol, whose town's fire district covers Ridgecrest and several other religious and tax-exempt entities.

"We are ultimately responsible for them and we have to have the equipment and the manpower to handle fires whenever they arrive."

Property taxes = police, firefighters, garbage pickup

Property taxes are the main fuel that makes local governments run. It's the pot of money counties, cities and towns rely on most to pay for core services, such as fire protection, police and garbage collection.

Currently, taxable property in the county is valued at $29 billion. That value comes from land, buildings, cars, and other real and personal property, according to county tax department records.

With few exceptions, local property values have climbed over the years along with the population. But to cover increased demand for services, elected officials have been at times loath to tap into those potential taxes. In lieu of some property tax increases, officials have often looked instead to fee increases and cost-cutting.

Some have also closely watched the region's tax-exempt organizations as they've grown in number and potential value.

Tax-exempt organizations don't have to help toward governmental services — or get to contribute less — because lawmakers have determined they provide some kind of public good.

Exempt properties range from governmental buildings to sprawling retirement communities and private schools.

In some cases, the government even partners with tax-exempt groups, such as nonprofits to perform public services.

Last year, the county spent more than $40 million to contract with nonprofits providing services ranging from senior care to homelessness prevention, Board of Commissioners Chairman David Gantt said.

Those organizations can do the job more efficiently than the government, Gantt said.

"When we do contract, benchmarks and very strict compliance rules are written into a contract with the nonprofit," he said.

The types of exempt groups are divided by category.

Government buildings, universities, PILOTs

Government facilities make up the bulk of tax-exempt properties with county government itself owning $550 million in land and buildings.

Included in that list is UNC Asheville with 86 acres at an address of 2500 University Heights and an exempt value of $122 million.

Universities have come under scrutiny in other places around the country by those who say they have created large gaps in the property tax base while still requiring governmental services.

In Philadelphia, the City Council recently voted to push the University of Pennsylvania to give payments in lieu of taxes, or PILOTs, to help the city's struggling public school system.

Such payments are given by the federal government to communities with a great portion of land taken up by national forests, national parks and other restricted areas.

UNCA spokesman Steven Plever did not respond to questions about whether that arrangement would make sense here. Leaders of the region's two biggest governments, the city and county, shied away from such tactics.

Gantt said that he would consider such a program only for "nonprofits who operate like for-profit businesses and unfairly compete with local businesses."

Asheville Mayor Esther Manheimer said she doubted that a mandatory system of PILOTs could work presently in the state. Asked if she supported the idea in general, Manheimer said the main thing cities need is a "reliable revenue stream."

"And with all the different pieces of legislation pending, budget predictability and stability is a concern to all cities in North Carolina."

Hospitals and farms

The largest single beneficiary of the exemption is Mission Hospital, which under the "charitable hospital" status has more than $600 million worth of untaxed property.

It gets the status because it is a nonprofit and because the hospital provides "community benefit," a term that means more than $143 million given back in various forms, said Sonya Greck, senior vice president of behavioral health and safety net services.

Those benefits include "assistance to uninsured and underinsured patients, subsidization of Medicare/Medicaid patient care and clinical services that often lose money," such as pediatrics and psychiatric care, Greck said.

There's also funding research and medical education.

Farmers also get a special break, known as present-use value. The idea is that land currently used to farm or forestland being cultivated for timber or even horticultural land will be assessed by the tax department at a price less than the market value. Market value assumes a "highest and best" use that considers homes, hotels or other valuable structures that could be built.

In Buncombe, the biggest farmer to reap the benefit is Biltmore with one parcel stretching 3,000 acres on its western side. Among the uses there are 90 acres of vineyards.

Counting all farmland, Biltmore has a deferred value of more than $100 million.

Biltmore spokeswoman Kathleen Mosher said the company supports the state's laws that help keep land under agricultural uses. The theory behind the deferments is that farmers won't be forced to sell property because of high taxes.

"The classification promotes preservation of agricultural property and forestland in North Carolina, and we support any initiatives that allow for preservation of those lands," Mosher said.

A voluntary tax?

With pushback from tax-exempt organizations, some local officials are attempting to get creative.

In Black Mountain, Mayor Sobol said he doesn't think religious institutions should be allowed to exempt all of their facilities.

"I belong to the second-largest landholder in the United States, the Catholic Church," he said. But it shouldn't matter the type of religious institution, Sobol said, only the church building itself, parsonage and an educational building should be able to avoid paying their share.

Ridgecrest declined to comment about helping pay for government services, but Marty King, spokesman for Lifeways Christian Resources, the Tennessee-based owner of Ridgecrest, said the center was honored to help during the recent fire.

"Ridgecrest Conference Center was honored to host the incident command post during the Weed Lane fire, and to provide housing, meals, meeting space and more services for emergency personnel," King said. "We are thankful for their efforts, God's protection, and the prayers of so many."

Sobol said just a small addition to the bills that conference center attendees pay would help Black Mountain's fire department, whose boundaries extend far beyond the town.

"If you put on the bill, a 50 cents — not 50 percent — just 50 cents for fire and emergency protection, I don't think there would be one single resident who would complain," he said.

Valuable property - no taxes

Here are examples of some of the big tax-exempt property owners in Buncombe County

Governmental

— Buncombe County government - $550 million (Includes $114 million county building complex at 80 Court Plaza.)

— Buncombe County Board of Education - $441 million (Includes Roberson High valued at $75 million)

— City of Asheville - $329 million (Includes $59 million U.S. Cellular Center)

— United States Forest Service - $142 million

— UNC Asheville - $125 million

Charitable Hospital

— Mission Hospital - $635 million

Religious

— Lifeway Christian Resources - $59 million (Ridgecrest Conference Center)

Deferred use farm, horticulture, forest

— Biltmore - more than $100 million deferred (Includes 3,000 acres of western vineyards with market value of $49 million)

— Thomas Thrash - $3.1 million deferred (62 acres at 36 Crowel Road)

— James Clarke - $2.9 million deferred (324 acres on Charlotte Highway)

Nongovernmental education

— Asheville School - $66 million

Continuing Care Retirement

— Givens Estates - $162 million (Includes 135 acres at 100 Wesley Drive valued at $109 million)

Charitable (all others)

— Elida Foundation - $23 million (203 acres with an address of 49 Compton Drive)