Portsmouth council questions tax abatement
Elizabeth Manor golf course didn’t pay for almost two decades
PORTSMOUTH — The city did not collect real estate taxes from a private golf course property for almost two decades until the mistake was discovered and corrected last year, according to city tax records.
Elizabeth Manor Golf and Country Club, an 18-hole course that measures about 140 acres, was supposed to have its taxes lowered under an open-space agreement with the city. But records obtained by The Virginian-Pilot show that since at least 2003, the golf course had all of its taxes abated. It wasn't charged the lowered rate until 2022.
The finding first surfaced when City Council members terminated City Assessor Patrick Dorris, who says he noticed the mistake. The issue led to a heated discussion during a council meeting this month as members questioned how it happened.
Legislation from the 1970s allows Virginia localities to provide tax relief to land owners to preserve agricultural, horticulture, forestry and open space lands as part of a use value assessment program. Participating properties are assessed with an annual suggested range of dollars per acre that is used to come up with the lowered rate, which is then levied at the citywide real estate tax rate.
Portsmouth's only property in the program is the golf course. Chesapeake and Virginia Beach, along with other cities across the commonwealth, also have private golf courses in the program.
Records reviewed by The Pilot, including those recently provided to City Council by Interim City Assessor Janey Culpepper, show then-owner Elizabeth Manor Corporation first entered the golf course into the program in 1979. Records show taxes for the golf course were charged and then completely refunded from at least 2003 until 2017. During that period, the assessed taxes ranged from $58,454.56 in 2003 to $139,847.48 in 2017.
The golf course wasn't charged any taxes for the following few years until 2022, when owners paid $3,648 and weren't refunded, according to the records.
Andrew Smith, chief deputy director of the Department of Conservation and Recreation, said the idea behind the open space program is to preserve farmland and conserve open space. The benefit of conserving a golf course, for example, could be to control growth or prevent development in a particular area.
But Smith said he hasn't heard of any property's taxes being completely abated through the program.
“(The) intent of the program is … not to eliminate people's taxes, but it'd be taxed at the actual use value as opposed to fair market value,” Smith said.
Elizabeth Manor Golf Investors II LLC, which took over the course in 2020, is owned and operated by Dwight C. Schaubach. The businessman built an empire of booming companies, including a medical waste disposal business and Feather-N-Fin restaurants, and was honored for contributions to the city this year and named Portsmouth's First Citizen.
Two other properties adjacent to the golf course, however, aren't part of the program and are assessed at fair market value. Records show the owners paid a total a little more than $29,000 in 2022 across both of those properties.
Schaubach said he can't speak to anything that happened before taking over in 2020.
“It was the city that actually structured it and they pretty much had that in place for years,” he said.
The golf course, founded in 1948 and opened in 1951, offers numerous membership packages starting at a few hundred dollars a month, which also include access to swimming, tennis and other activities. And for more than 60 years, it's been home to the historic Eastern Amateur tournament that draws golfers from around the world.
Skeeter Heath, head of operations at the golf course, told The Pilot the golf course pays what the city charges.
“We pay every tax bill that we get, and we paid every tax bill that we owe, and we are current with all of our tax bills,” he said. “I go by what the city tells (us) to pay. And this is what we have done.”
City Council member Mark Whitaker brought up the tax payments in what became a heated meeting June 13. Whitaker and Council member De'Andre Barnes pointed questions to Culpepper about why taxes had been abated and what determination she used. Culpepper served as city assessor from 2011-17 before she was brought back this year following Dorris' termination.
Culpepper said she understood abatement had been the “normal” practice for quite some time. She cited a 2008 real estate land book change form, a 2009 memo about the land use agreement, two letters from 2007 and one from 2019 that all refer to the golf course parcel as “non-taxable.”
In the 2007 memo Culpepper provided, then-Assistant City Assessor Iris Oxendine asked then-owners Elizabeth Manor Corporation to complete the application for the program as “it is vital” in order to “retain the tax exempt status of the land use only.”
And in a 2019 letter, then-City Assessor Holt Butt said “(the) land on which the golf course lies is exempt from taxation.” Butt also said in the letter that “roll-back taxes” aren't a concern unless the land use designation changes.
“I certainly did abate the taxes,” Culpepper said.
“I didn't do it because of something that I wanted to do … I did it because there was files there that had the information and the files are no longer there.”
She also said she was “operating by the code” as far as she knew.
In a heated back-and-forth with Culpepper at the meeting, Whitaker and Barnes said the assessors office should operate on policy.
“The city doesn't run on normal and customary practices. The city runs on policies,” Whitaker said. “So as the assessor, it's not enough for you to say someone told me that this is what should be done. You should be driven by policy. And what I see here is an abuse and I see where an organization should have been paying their taxes and they were not. And they were given the good graces of the assessor's office.”
But Mayor Shannon Glover told The Pilot this week that answers were provided at the meeting and the issue won't be an ongoing concern “unless something else surfaces.”
“There were questions asked of the assessor. She answered the question. There was a back and forth and as I stepped in at one point, I said, ‘Those questions have already been addressed,'” Glover said. “This was not a court of law. And so the level of interrogation that took place, in my mind, once you ask people questions and they answer it, you move on.”
Dorris was the city assessor who began charging real estate taxes to the golf course in 2022. Dorris told The Pilot he was familiar with the open space program when he began working for the city in 2021 as he had experience with it in other locales. The property's annual revalidation was due around that time, so Dorris said he realized the program wasn't properly being carried out, informed owners that they'd be charged and explained how the program is supposed to work, he said.
“So they went through the process, but they were never, (the city) never taxed it appropriately according to the land use program, or how it should be taxed,” Dorris said.
Heath told The Pilot he recalls speaking with Dorris about the revalidation form and could also recall that Dorris was “looking into” the way taxes had been levied.
Whitaker asked the city attorney's office to investigate the matter further and determine whether back taxes could be owed.
“I don't think that this should be something that council should be quiet about and swept under the rug considering that when we have seniors struggling trying to make tax payments, we make them pay,” Whitaker said. “And if they don't pay, we take their properties.”
Culpepper said at the meeting that the property is “on the tax rolls and will continue to be taxed from here forward,” unless she's told differently.