LACONIA — The City Council this week renewed its agreement with the Taylor Community, by which the nonprofit continuing care retirement provider voluntarily makes an annual payment in lieu of property taxes, or PILOT, to the city.
The original agreement was concluded in January 2003, after the New Hampshire Supreme Court resolved four years of litigation between the city and the Taylor Community. In 1997 the city challenged the ruling of the New Hampshire Board of Tax and Land Appeals (BTLA) that what was then called the Taylor Home was a charitable organization and exempt from property taxation. When the New Hampshire Supreme Court upheld the decision of the BTLA in 2001, the two settled their dispute by entering an agreement by which the city recognized the Taylor Community as a charitable organization entitled to tax exemptions and in return the Taylor Community agreed to make substantial annual payments to the city.
In renewing the agreement, the council accepted a change to the formula for calculating the amount of the annual payment. The payments have always been based on the posted rents at the Taylor Community, not the actual rents received or the assessed value of its property.
The original agreement provided for an annual payment of $150,000, which represented the sum of the posted one month's rent for 123 residential units at The Ledges cottages, and provided for the payment to be adjusted if rents increased. Since then the Taylor Community has added 57 independent living units at the Woodside building, the posted rents for which were incorporated into calculating the payment. In 2014, the last year of the prior agreement, the PILOT amounted to $249,574.
The most significant change in the new agreement is that the payment will be based on the actual rents received, not the posted rents. The agreement stipulates that the annual payment shall be at least $150,000 and if the sum total of one-twelvth of total rental receipts exceeds $150,000 the annual payment shall increase dollar for dollar and equal one-twelvth of rents received. This change in the agreement reflects the fact that the rents billed and received may not always match the posted rent for the unit.
City Manager Scott Myers said that the changed calculation would likely reduce the PILOT by about $12,000, to some $238,000 in 2015. He said that the PILOT approximated a property tax payment the Taylor Community would make if the assessed value of its property were taxed at city portion, but not the local or state school or county portion, of the property tax rate.
The agreement was renewed for 10 years, beginning April 1, 2015 and ending on March 30, 2025, unless otherwise renewed or renegotiated. It also provides that if the Taylor Community "finds itself in financial difficulties" and the city "shall, in good faith, consider renegotiating the voluntary payment or deferring payments, but it will not be obligated to do so."