Norwich assessor reconsidering denials of nonprofits’ tax-exempt status

Norwich — Assessor Donna Ralston will review and reconsider tax-exempt status for all of the local nonprofit agencies denied property tax exemption this spring, and this week reversed two decisions.

Ralston initially denied tax-exempt status to about three dozen nonprofit entities — many of which had received the exemption for years or decades — sparking criticism and fear that the practice would be repeated in other cities and towns.

Ralston on Thursday notified the Norwich Arts Center and the Southeastern Connecticut Cultural Coalition that she had approved their property tax-exempt status. NAC, which owns its three-story gallery and theater building at 60-64 Broadway, assessed at $342,300, will have to pay taxes on two small office spaces and one “tiny” closet, rented to commercial tenants, NAC board President Charles Chase said. Initially, Ralston proposed taxing the entire building.

“It’s very clearly what should have happened,” Chase said Friday. “We should not have been taxed for the entire building. It was a great relief to have that straightened out.”

Cultural Coalition Executive Director Wendy Bury said she met with Ralston on May 22 to discuss the application. The coalition rents a small office in the Foundry 66 shared workspace and would have been taxed on a $740 assessment for office equipment. Bury said the coalition submitted additional information, as did several other nonprofits seeking reversal of Ralston’s denials of tax-exempt status.

“A number of us were lawyered up and ready to go, if need be,” Bury said of plans to appeal the denials to court. “I’m just so grateful that time was given for us to give additional information, and I’m grateful to have a peaceful resolution that will save our organizations money, and the city.”

Ralston said she is reviewing all the nonprofit denials and will call the agencies’ representatives for meetings if she needs more information.

She is scheduled to meet with officials from Reliance Health on June 12. Reliance Health, which provides services to people with mental illness, substance abuse and homelessness issues, owns buildings assessed at a total of $1.1 million.

The Norwich Community Development Corp., the city’s economic development agency, was denied exemption for the furniture and equipment in the Foundry 66 operation it runs. NCDC President Robert Mills said he met with Ralston on Friday and has not yet heard back.

On Thursday, Gov. Dannel P. Malloy signed a bill that gives Norwich nonprofit entities that missed a state-mandated fouryear paperwork filing deadline an extension until Aug. 1 to refile. State law requires all nonprofits to file every four years by Nov. 1, but at least 18 Norwich entities missed the deadline and were denied tax-exempt status automatically.

The new law gives them until Aug. 1 to file with a $30 late filing fee.

Ralston said those entities have to “just do what they normally do” and submit their paperwork to the assessor’s office.