Churches find no sanctuary from debt
The Rev. Ryan Preston Palmer sat at the front of a mostly empty chapel in his large Gothic church, his Bible open to the Book of Ruth. Sunlight streamed through broken windows, illuminating the pale pink paint peeling from the walls in clumps.
The church building at the corner of North Avenue and St. Paul Street is vast, and Palmer says it could draw people together for missionary work, evangelism and community revitalization. But that vision is in jeopardy. On a recent Sunday, 10 people sat scattered before Palmer — another 30 seats waited for worshipers who never The Rev. Ryan Preston Palmer preaches during a Sunday service at Seventh Metro Church. An investor bought the church’s debt from unpaid water bills and is seeking to foreclose on the building. showed — listening as the minister described the plight of Seventh Metro Church.
More than $6,000 in unpaid water bills sent the century-old Baptist church to tax auction last year. A California investor bought the debt, and is now seeking to foreclose on the $1.4 million building.
If Palmer can come up with the money to pay off the debt — plus interest, and the investor’s legal fees —the tiny congregation could still save its home, he said. But time is running out, and Palmer asked the churchgoers to look to divine intervention.
“Well, Seventh, we are in a bind that we can’t fix,” Palmer said. “It’s not the ninth hour, it’s the eleventh hour.
“This looks like a job for Jesus. At noon every day this week, let’s pray: ‘God help us to save this building and build your church.’ ”
The church’s predicament is not unique. Records show that in the past three years, investor Christopher Bryan has used limited-liability corporations to buy liens on at least 26 predominantly AfricanAmerican churches in the city’s annual tax auction. He has filed papers to foreclose on half a dozen, and took final ownership of one last month. Bryan, too, has a vision. Most of the churches Bryan is seeking to foreclose on have fallen into deep disrepair — at least two have deteriorated so badly that they are not used by their congregations. He said the historic buildings are precious resources that are being wasted by congregations that lack the wherewithal to make full use of them.
He says he plans to rent or sell the buildings he acquires to pastors who will be able to fill the pews.
“Everybody wins with an active church,” Bryan says. “The community wins, the congregation wins, the city wins. “A derelict church benefits no one.” Baltimore, like other jurisdictions in Maryland and across the country, attempts to recover unpaid property taxes, water bills and other charges by offering the debt at auction. In Baltimore, the system dates at least as far back as the 19th century.
Investors pay the amount due, satisfying the city, and then attempt to collect it themselves from the property’s owner. They can charge up to 18 percent interest annually, plus up to $1,500 in legal fees and hundreds of dollars in other costs. If they are not paid, they can foreclose on the property.
Critics say the system puts property ownership at risk over small and possibly erroneous bills — the city’s water billing system has been plagued with problems — and the poor and vulnerable can lose their homes.
The system drew more scrutiny this month when the city offered liens on Oriole Park at Camden Yards and M&T Bank Stadium — state-owned facilities that should not have appeared on the auction list. Officials blamed a computer error and said they would cancel the sales.
The city offered liens on some 1,000 homes for delinquent water bills in the same auction.
Mayor Catherine Pugh, City Council President Bernard C. “Jack” Young and other council members say they will look for ways to protect vulnerable property owners while also getting people to pay their bills.
“We need to review the tax sale process, period,” Pugh said. She said she’s waiting to see an analysis of data from the 2015 auction before making any decisions.
Bryan buys liens on hundreds of properties a year. He says he expects 99 out of 100 owners to pay their debts before he can obtain a property through foreclosure.
The tax sale gives investors a way to acquire property for a fraction of its market value, if they are patient. Seventh Metro has been assessed at $1.4 million. Bryan’s bid of $53,300 could be enough to acquire it. “We’re not nonprofit,” Bryan said. Churches are exempt from property taxes, but not from the water bills and other charges that can land a property on the tax sale auction list. The city did not provide details of the debts for which Bryan is now foreclosing, but pastors said they had struggled to pay water bills that in some cases they disputed.
Political and community leaders in Baltimore said the risk of congregations losing their churches underscores the need for changes.
The Rev. Alvin J. Gwynn Sr., president of the Interdenominational Ministerial Alliance, said churches need to join together to oppose tax sales based on water bills.
“It’s destroying them,” he said. “It’s pitting government against the churches. You’re taking a backdoor way of taking a debt and turning it into a tax and taking our churches.”
Gwynn’s church, Friendship Baptist in North Baltimore, landed on the tax sale list this year for a $6,000 water bill. He showed a reporter a receipt indicating that the 1,200-member congregation paid the bill off before the auction this month. The city sold the lien anyway.
Gwynn said the church is fighting the action. The city did not respond to a question about it.
A spokesman for the city water department said “records indicate a pattern of non-payment from many” of the 15 church accounts The Sun inquired about. Spokesman Jeffrey Raymond did not provide a breakdown.
“In some cases, the non-payment continued even after we provided significant payment adjustments,” Raymond said in a statement. “In other cases, we have no record of the customers making inquiries about these particular accounts.”
The agency, he said, “sees no indication that the difficulties cited are due to the billing system — either the old system or the new one.”
Del. Mary Washington, who has sought to stop tax sales over unpaid water charges, said she was appalled to learn of churches being caught in the tax sale.
“The more you pull away at the onion of these water sales you come to find again it’s not simply a mechanism to get reimbursed, it’s a strategy for divesting long-standing community residents of their assets,” the Baltimore Democrat said. “The whole idea that the state would be party or allow local jurisdictions to be party to a systemic targeting of religious institutions for profit by out-of-state entities is intolerable.”
Bryan said he can understand why people don’t like the tax sale. But it takes months to lose a property, he said, and that’s time that the owner can use to seek help.
“Tax sales do not happen overnight,” he said. “They happen after years of nonpayment and legal process. Everyone finds the final step distasteful, but nobody steps in in the 18 months beforehand and does anything about it.”
Young, the City Council president, objects to investors trying to make money on churches.
“If I was an investor and I bought a church at a tax sale, I would go ahead and take a tax write-off and give the church back to that church,” he said.
Bishop Charles H. Wilson Jr., leader of Praise Cathedral on Franklin Square, said city officials have worked against his church, instead of supporting its work to distribute clothing and feed the hungry.
Wilson and his congregation bought the former Fourteen Holy Martyrs Catholic Church for $250,000 and established Praise Cathedral in 2011. Their goal was to make it the headquarters for several smaller churches. The building has been assessed at $939,200.
Wilson said a $3,500 water bill has grown, with interest and fees, to more than $6,000. The congregation stopped meeting about a year ago, in what Wilson described as a pause to reorganize and sort through expenses.
The enormous, creaky sanctuary has significant roof damage. Windows are boarded up; exposed brick is visible through chipped plaster walls. In each of the last three winters, Wilson said, a pipe in the cellar burst, causing leaks and running up the water bill.
Church members fixed the broken lines each time and went to the water department to sort out the bill, which Wilson says has been inexplicably high.
The church faced tax sale twice before Bryan’s company bought a lien against it last May.
“The city does not do anything to help the churches,” Wilson said.
Some say that Bryan does. The leaders of at least three churches that operate out of space he owns — he says he charges $1,100 a month each to congregations in two rowhouses and a storefront — speak positively of him.
The Rev. Anthony Miller Sr. moved his growing congregation from the basement of his Pikesville home to a storefront in McElderry Park owned by Bryan.
“When we met it was just awesome,” Miller said. “God divinely put us together.”
Miller said he connected with Bryan through his mother-in-law, a real estate agent. The newly remodeled space is perfect for his 30- to 40-member Hope Community Church, he said, and the rent is affordable for a congregation that relies on donations from its members.
Bryan “had a heart to try to impact that community,” Miller said. “He’s trying to have a positive impact in communities with challenges.”
But Bryan’s attempt to take over the