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IROC Seeks Tax Free Status

October 4, 2012

DERBY, VT - IROC is in a deep hole - close to drowning but trying desperately to keep its head above water.
IROC is facing foreclosure in April for its inability to pay the $7,700 per month mortgage payment for the facility and still owes about $1.1 million.
Not only is IROC asking several towns that use the facility to financially help IROC every year, but it is also seeking tax exempt status from the state.
IROC would voluntarily pay the town taxes, IROC’s executive director Phil White said in a statement.
White sent a letter to the Department of Taxes and the Derby Listers to protest the property tax assessment and bill applied to IROC. According to White, the protest falls under the Common Benefits Clause of the Vermont Constitution, which he says “expressly provides a specific property tax exemption to the Burlington Area Y.M.C.A.”
White draws a comparison between IROC and the YMCA. Each is a non-profit “serving an identical mission in its community.”
“We believe that property tax provisions that exclude the YMCA from property taxes should be and must be read to include IROC in the scope of their reach. Implicit within the terms of the statute should be the YMCA and similarly situated facilities. Otherwise it must be considered to unlawfully and irrationally discriminate between the YMCA and IROC.”
White continues, “We therefore request that the reach of 32 V.S.A. § 3802(6) be construed to implicitly include I.R.O.C., Inc. and other facilities that are similarly situated with the YMCA. In the alternative, we submit that it is a violation of the Common Benefit Clause of the Vermont Constitution to treat IROC differently from the YMCA and that the property tax on its property is unconstitutional. The only significant difference between the two non-profit corporations is that IROC operates in a financially challenged, very rural area of the state, with chronically high levels of unemployment.”
Each is a sports, fitness, and recreational facility with a pool, sports arena, and gym that serves people of all ages. White goes on to note that IROC offers special discounted memberships and exercise programs for those suffering from chronic conditions such as diabetes, obesity, and heart disease, as well as programs for cancer patients and survivors, and seniors.
The residents of Derby could vote a property tax exemption for IROC, but the property value would remain on the statewide education grand list and Derby taxpayers would have to pay.
“However, IROC serves the entire region,” White noted.
The legislative provision that awards the YMCA property tax exemption effectively removes the value of the property entirely from the statewide education grand list altogether, so that the taxpayers in Burlington do not have to make up for that loss in statewide property tax revenues, White said.
IROC had a 50 percent reduction in property taxes over the last two years as approved by the Vermont Legislature. That exemption has now expired. According to the lister’s office, IROC property is valued at $2,092,500. Last year its taxes were $21,141. Over the last few years, IROC has raised funds so that all youth age 18 and under in every town of Orleans and Northern Essex Counties can use the facility free of charge.
In August 2011, IROC announced that it could not carry its debt load of $2.2 million. Since IROC has reduced its debt by $800,000, it has managed to keep the doors open. Its outdoor events continue to grow in popularity around the U.S., Canada, and other countries.
IROC continues to seek donors willing to either pay off the debt altogether or to refinance the debt at favorable terms.
White says he will also ask the legislature to appropriate money either as a grant or to give to VEDA (Vermont Economic Development Authority) for the specific purpose of refinancing high risk loans for recreational and fitness facilities
“We have come too far to fail now,” said White. “We have six months to raise the money to pay off this note or refinance it. Given our success so far at whittling down our capital debt over the past five years, I’m sure it can be done."
In 2011, IROC had 6,000 members or regular users of the facility. IROC is generating an estimated $1,000 per month through a thrift shop it opened in its facility.

 

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