The Middletown Press (Middletown, CT)
Yale request cost city $3 million in revenues
Exemptions on 6 properties cut annual property taxes
NEW HAVEN — The city lost almost $3 million in property tax revenue this year because Yale University said six properties were being used for educational or medical purposes and therefore should be totally or partially tax exempt.
While in city assessment records and the state’s business registry database, Yale is currently recorded as owning just one of the buildings, city officials said the university owns them all. The owner of the other five is listed by the state and the
city as Winstanley Enterprises of Concord, Mass., a developer that built 100 College St., a 14story centerpiece of the city’s Downtown Crossing project and the Alexion Pharmaceuticals building. Winstanley also owns 300 George St., a former telephone company building now primarily housing Yale labs and offices.
The six properties, most in Newhallville’s Science Park, were counted among the 10 largest decreases in property assessments on the 2018 grand list. They “had previously been used for nonacademic purposes and were believed to be owned by Winstanley properties,” acting city Assessor Alexzander Pullen said in an email. “Upon contacting the office prior to the signing of the Grand List, we were informed that these properties were in fact owned by Yale, managed by Winstanley, and were now being used for academic purposes.”
Pullen said city Corporation Counsel John Rose Jr. verified the properties were owned by Yale and all or most of their assessed value was moved to the taxexempt list.
The six parcels’ assessments on the 2017 grand list totaled $83,671,700, for which the city received $3,596,209.67 in tax. In 2018, their assessments were dropped to a combined $15,675,491. The $673,732.60 total tax bill in 2018 meant $2,922,477.06 less that New Haven had to spend on police and fire protection, schools, social services and other functions.
While the five properties listed as owned by Winstanley Enterprises have had their assessments greatly reduced or zeroed out, Yale has not yet shown deeds to the city proving it owns the parcels, according to a city official who did not want to be named. After the 2016 revaluation, Winstanley, like hundreds of other property owners, disputed the assessments on those parcels and appealed them, the official said.
However, the official said, Winstanley dropped its appeals and Yale officials then called the city, offering documents that convinced Pullen and Rose that Yale owned the properties, despite the lack of a deed. The city granted the exemptions. “They have to provide it to my satisfaction,” Pullen said.
Carter Winstanley, a principal of the company his father, David Winstanley, founded, and the lead on its New Haven developments, did not return a call seeking comment.
In an email, Pullen had said, “The University is good about contacting our office annually and informing us of which properties have moved from [taxable] to exempt status and vice versa which allows us to review each on a case by case basis.”
Pullen said Yale previously had a development agreement on the properties it asked to have taken off the taxable grand list. “Yale took over these properties and basically said these are now going to be used for academic use,” he said. He said that in order to be taxexempt, a property has to be both owned by an eligible institution and used for purposes that the law allows. “In Connecticut, it’s ownership and use, not just one or the other,” he said.
The city would not know a building was owned by Yale and used for academic purposes if the name on its property card was not clearly a Yaleaffiliated entity. “As far as we know, because it wasn’t in the name of Yale, we don’t exempt it. When it is in the name of Yale, we do exempt it,” he said.
“They spoke with our corporation counsel and to our satisfaction were able to prove that it was Yale,” Pullen said.
Rose would not comment because Yale and the city have been involved in litigation about how the university’s taxexempt status has been applied.
Yale spokeswoman Karen Peart issued a statement saying, “Working in partnership with the City of New Haven, the State of Connecticut and others, Yale University was a major catalyst for, and contributor to, the redevelopment of Science Park, which at
the time, had vacant, contaminated and noncommercially viable buildings. The university’s efforts paved the way for many taxable projects to be developed and join the city’s tax rolls. Currently, the properties ... are Yale academic properties and as such are not taxable, but the university has increased its voluntary payments to the City of New Haven.”
Connecticut exempts educational, charitable, medical, religious and nonprofit organizations from property tax. Yale, through Yale University Properties, also is a landlord to retail shops and other businesses, and it pays taxes on those properties.
“It is this unique differentiation between its academic and nonacademic use properties which allows Yale to be both the largest owner of tax exempt property in New Haven, while simultaneously being the 3rd highest taxpayer for its taxable property,” Pullen wrote.
The city’s tax rate for both 2018 and 2019 was 42.98 mills, representing a tax of $42.98 on each $1,000 of assessed value.
Pullen said that Yale pays $5.6 million in taxes on its nonexempt property, assessed at $130,300,001. That assessment is 70 percent of fair market value. It was an increase from about $5 million in 2017 and $4.5 million in 2016, he said.
“As new buildings are constructed and older buildings are rehabilitated, Yale is paying an increasing share of taxes on the forprofit buildings it owns,” Pullen wrote.
But Yale’s taxexempt properties are also rising. On the 2018 grand list, its taxexempt property was assessed at $3,371,889,460, an increase of 2.09 percent, or $68,989,460, from 2017, according to Pullen. In 2016, its taxexempt property was valued at $2.975 billion, he said.
Yale makes a voluntary payment to the city, which has risen 52 percent since 2014, according to city data. The payment was bumped up from $5.94 million in fiscal 2017 to $8.66 million in fiscal 2018. It is budgeted for $8.5 million in this fiscal year. Yale also pays the city for fire service, which has risen from $2.7 million in fiscal 2018 to $3.3 million in fiscal 2020.
Following are the six buildings that had major decreases in property taxes because Yale requested that they be transferred, partly or entirely, to taxexempt status. The ownership information is from the Vision Government Solutions assessment database, found on the city assessor’s website.
One property, an office building at 50 Division St. built in 1983, is listed as owned by Yale University, managed by its Office of University Properties. Its assessment was reduced from $3,465,350 to zero, costing the city $148,940.74 in property tax. A chart of major account changes created by Pullen says it is “100% used for Yale academic programs.”
The other five, which were made totally or partially taxexempt, are all listed in the Vision Government Solutions database as owned by limitedliability corporations and coowned by “c/o Winstanley Enterprises LLC, 150 Baker Ave., Suite 303, Concord, Mass. 01742.” All five companies also are listed on the secretary of the state’s website as having the business address of “c/o Winstanley Enterprises LLC” in Concord, Mass.
Fenix I LLC, 276 Winchester Ave., a parking garage built in 2009, was made partially taxexempt, with its net value dropping from $28,629,510 to $9,653,560. Tax on the property dropped $815,586.33, from $1,230,496.34 to $414,910.01. Pullen’s explanation was that the property was “split into 2 parcels (tax & exempt) to represent the allocation of spaces on Yale University employee parking plan.”
WE 150 Munson LLC, 150 Munson St., had its assessment reduced from $23,619,680 to $3,649,884. Its 2018 property tax bill was $156,872.01, a $858,301.83 drop from 2017. Pullen explained that the building is used for Yale’s information technology, finance and business administration, the Yale Health Plan, Office of Research and Administration and shared services. It was split into two parcels, with 15.45 percent of the total property taxable.
Renaissance I LLC, 344 Winchester Ave., built in 1994 as part of Science Park, was put entirely on the taxexempt grand list, reducing its assessment from $14,349,790 to zero and its property tax from $616,753.97 to nothing. Pullen’s description was that the building is “100% occupied by Yale University: dining, facilities, Yale Press” and by Sterling Memorial Library and the Beinecke Rare Book and Manuscript Library.
WE 135 College Street LLC, 123 College St. (the two addresses are in the same blocklong building between George Street and Martin Luther King Jr. Boulevard, built in 1959), was assessed at $7,011,900 in 2017 and $648,690 in 2018, with its tax cut from $301,371.46 to $27,880.70. Pullen said the parcel was “split into 2 parcels (tax & exempt) to represent 93% exempt use by Yale University”: Office of Environmental Health and Safety, broadcast media and the Yale School of Medicine’s cardiology, occupational medicine and internal medicine departments. A bank branch also occupies the building.
WE 2 Church Street South LLC, 2 Church St., South, was built in 1963 and is popularly known as the Doctors Building. Its assessment was cut from $6,595,470 to $1,723,357 and its property tax reduced from $283,473.30 to $74,069.88, barely a fourth of its 2017 levy. Pullen’s explanation was that the building was “split into 2 parcels (tax & exempt) to represent roughly 72% exempt use by Yale Department of Psychiatry, Pediatrics & Neurology, Yale School of Public Health, Yale Center for Clinical Investigation, Yale Stress Center & Yale Office of Cooperative Research.”