Board of equalization denies NSHC property tax appeal

Nome Common Council members sitting as the Board of Equalization on Tuesday denied Norton Sound Health Corporation’s appeal of the City Clerk’s ruling that six of NSHC’s properties should be not exempt from the city’s property tax. The applications for property tax exemptions were timely filed, but denied by City Clerk Bryant Hammond. NSHC appealed Hammond’s decision and the issue was brought before the Board of Equalization.

The board usually hears appeals from property owners who disagree with the state assessor’s determination of their property’s value. This year, however, the board heard from NSHC, represented by two lawyers appearing virtually, who argued on principle that the NSHC’s properties are essential to the hospital mission, in direct support of its operations to provide health care and thus should be exempt from city taxes. Lawyer for NSHC, Wendy Pearson, argued that essentially, the properties have no standalone purpose. “They wouldn’t be there without hospital activities,” she said. Attorney Steve Osborne argued that some of the functions of the buildings are federally mandated, for example, housing traveling staff.

City Clerk Bryant Hammond disagreed and argued that the ancillary properties for housing, training, storage or maintenance are not passing the standard to be vitally necessary to hospital use. i.e. no patients are seen or treated in these buildings. He also rejected the argument of a federal preemption.

At issue were six properties owned by NSHC and the total property tax in dispute was in the amount of $86,622.80 for all six properties. The properties were the hospital’s 7plex, the West Campus (including storage, operations and maintenance buildings), the Kusqi House, several portions of the Patient Hostel and Wellness Center, the empty BIA building and the vacant BHS building.

The board met in three sessions, including executive sessions with the city’s attorney, before voting on the matter on Tuesday night. Board commissioner Meghan Sigvanna Topkok recused herself from discussion and vote, citing a past and present relationship with NSHC. The board voted separately for each property and each motion to grant the exemption failed.

The Board of Equalization will meet again on May 23 at 6:30 p.m. to adopt the findings of decision paper that will detail the particular basis for the rejection of all six appeals. The document then goes before the Nome Common Council for ratification.