Board of Assessors Lays Out Opposition To Senior Housing Tax Deal

Over the past several months, the Lynnfield Board of Selectmen and the Lynnfield Board of Assessors have been working to resolve their differences over a proposed payment in lieu of taxes (PILOT) plan for units at the soon to be built Colonial Village senior housing development close to MarketStreet Lynnfield.

The issue has generated considerable debate in town because the taxes to be paid by Colonial Village residents are different from those paid by residents of the other town senior developments – Essex Village and Center Village.

This week, Lynnfield Assessing Manager Dick Simmons provided local media with the following statement, further laying out his board’s position on the matter. The next Board of Selectmen meeting is Monday, December 16 at 7 p.m. at town hall:

“You [LIFE] have a moral obligation to pay the same PILOT you do for the other villages.”  Electronic correspondence from William Gustus, Town Administrator, to LIFE president Joseph Maney and Board of Selectmen, June 13, 2013.

The Board of Assessors strongly oppose the proposed PILOT for the Colonial Village which provides for a fixed payment in lieu of taxes (PILOT) that is grossly disproportionate to the payments assessed on the units at the Essex Village and Center Village senior developments. For the past 30 years, the Center and Essex Village properties have been subject to a contract with the Town of Lynnfield that provides for payment in lieu of taxes calculated on the basis of valuation determined by the Board of Assessors. The Board of Assessors has established a standard that values the properties, not at their fair cash value like every other residential property, but rather at its acquisition or resale value which is below the fair market value. The board further discounts this resale value by 34% and applies the residential tax rate to arrive at a PILOT payment. This affords a significant reduction in PILOT payments to the residents of Center and Essex Village residents which are levied equally in proportion to the values of the properties.

In order to fully understand the fiscal implications related to proposed development of the Colonial Golf Course, the Town of Lynnfield commissioned a land planning and development consultant firm to prepare a fiscal impact analysis. The report prepared by Connery Associates dated February 7, 2007 included a payment in lieu of taxes to be paid by LIFE from the proposed Colonial LIFE units as part of the residential revenue that would be generated annually for the town.

LIFE has submitted plans to build luxury senior housing overlooking the golf course including five buildings with 2 bedroom, 2 bath 1,500 sq., ft.  townhouse units with first floor master suites and two car attached garages. Despite the 30 year history of proportionate PILOT payments assessed to and paid by the Centre and Essex senior developments and despite the reasonable expectations of the taxpayers of Lynnfield that LIFE would make proportionate PILOT payments, in the July Board of Selectmen’s meeting LIFE asserted that they had no obligation to pay a PILOT.

At the Board of Selectmen’s meeting held in July 2013, LIFE offered to pay a flat $75,000.00 in lieu of taxes for the 48 Unit Luxury Colonial Development with an annual 1.025 percent increase  per year. Selectman Crawford remarked “I don’t think it’s completely equitable for those 48 people to not only get a break on the cost of the house and a break on their property taxes, but now a break on the increase of their property taxes. It’s triple dipping.” Selectman Terranova also ardently disagreed with the proposed PILOT. Notwithstanding, 0n September 10, 2013, a Pilot Agreement was signed providing that Colonial Village pay $75,000.00 annually. At its most basic level, that PILOT resulted in the 48 luxury setting Colonial Village Units situated on the golf course, with all the enhanced amenities, paying the equivalent of $1,562.50 per unit annually.

“Now come along the Board of Assessors” complained LIFE President Joseph Maney, in his Letter to the Editor published in the Lynnfield Weekly News last week. The Board of Assessors urged LIFE and the Selectmen to revisit and amend the PILOT. The basis for the intervention by the Board of Assessors was centered upon their belief that it is unreasonable and unfair that the burdens of generating revenue for the Town be shifted from those who are financially capable of affording the acquisition price of $475,000.00 for a luxury town house to the current LIFE residents and to the taxpaying community at large. The Assessors felt that this tax benefit offered to the Colonial Village residents served to create unequal treatment of the senior housing developments. This would result in the modest and affordable Center and Essex Villages making PILOT payments based on resale value which would be proportionately greater than the payments to be made by the more expensive luxury Colonial senior housing. The unfairness of this inequitable treatment favoring the newer luxury Colonial Village units appears to be of no concern to Mr. Maney.

The Board of Assessors has recommended that the PILOT for the Colonial Development be amended so that it is calculated and annually adjusted on the basis of valuation in the exact same manner as the Center and Essex Villages. William Gustus notified LIFE that “you have to know that I, and the Board of Assessors, had every expectation that the current PILOT arrangement would extend to the new village…  For the location, the condos will go for about 60% of fair market value and the PILOT will be for less than what owners would pay in taxes outside of LIFE non-profit umbrella. In short, it is a good deal for Lynnfield (Colonial Village) Seniors.”

LIFE proposes that the residents at the luxury Colonial Village pay substantially less in PILOT payments than a senior tax payer who has elected to stay in his/her home and proportionately less than a senior residing in the Center or Essex Villages would pay. The Board of Assessors is not opposed to preserving preferential assessments to the seniors residing in the Villages as it has for 30 years; however, we believe that the same standard of valuation should apply to the Colonial Village units. To do otherwise would provide a benefit to 48 unit residents at Colonial Village which is inequitable and unfair. We encourage the town taxpayers to attend the Board of Selectmen’s meeting on Monday, December 16, 2013 to express their opinion.

 Respectfully submitted,

Lynnfield Board of Assessors