Fireweed wants help from the city

Posted: Sunday, May 26, 2002

As Fireweed Place has struggled to gain financial footing over the past few years, city property taxes have been a sticking point.

Since 1995, Fireweed Place has paid $414,000 in city property tax, despite several requests for a "community purpose" exemption. The city assessor and the Board of Equalization last year reduced the assessed property value from $5.9 million to $3.7 million, but a property tax exemption wasn't granted.

While paying property tax has been a challenge for the cash-strapped housing complex, Fireweed Place's board of directors wants to put the issue to rest and asked the city for a $100,000 "incentive grant" to give it time to come up with a long-term solution, board chairman Thomas Dahl said.

"We're not asking for a tax exemption. ... Then we get into adversarial relationship that we don't want to," Dahl said. "It's a simple, straightforward request for a grant. The city has come through in response to those kinds of requests before."

In a 1992 grant agreement with the city, Fireweed Place said it would not look to the city to operate and maintain the building. The agreement specifically did not limit Fireweed Place from seeking city tax relief.

The city provided about $685,000 in two separate grants in 1992 and 1993 to purchase the nearby property and cover unexpected demolition costs. Correspondence from 1995 shows disagreement between the city and Fireweed Place over tax forgiveness.

The property tax issue didn't come up when the Juneau Assembly approved the first grant on July 6, 1992, but then-Mayor Jamie Parsons reported "that the $620,000 was the maximum the Borough will contribute toward this project, and Senior Citizen Support Services acknowledges that no additional funds will be forthcoming," according to the meeting minutes.

Rod Swope, who was on the Assembly when the original grant was approved, said members thought it was a good project, but cautioned that they didn't want to put money into Fireweed Place in the future.

At one point, the Assembly agreed to give the housing complex a tax exemption for its low-income units, former Assembly member Rosalee Walker said.

As a state senator representing Juneau in the early 1990s, Jim Duncan helped secure about $1.8 million in seed money for Fireweed Place. The money was intended to reduce the project's overall debt burden, he said.

"I felt it was an important project at that time. It's just as important to see it maintained and survive today," he said. "I remain convinced today in discussions I had with folks involved that we had a commitment that there would be a property tax break."

While the Juneau Pioneers' Home and Mountain View Senior Housing are exempt from city property tax because they are state-owned, Fireweed Place is run by a nonprofit corporation that doesn't have a charitable purpose. As such, property tax applies, according to a report from the city assessor last year.

The Juneau Assembly held off on responding to the $100,000 grant request from Fireweed Place earlier this month to wait for possible action by the state Legislature. Assembly members are scheduled to discuss new funding requests Wednesday.

"There needs to be a long-term plan for that," Assembly Finance Committee Chairman Jim Powell said. "I think some of the problem was that it never penciled out and it's come home to roost. We need to take care of the situation, but we need help and the city can't do it alone."

Deputy Mayor Ken Koelsch said he's willing to discuss the property tax issue.

"It seems logical to me that if they're taken over by a state agency we wouldn't receive any property tax," he said. "The basic decision is how to keep the center fully occupied."

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