Groton signed 10-year agreement to settle tax case with Fairview
Groton — Fairview, Odd Fellows Home of Connecticut will pay $60,000 in payments in lieu of taxes to the town through 2025, plus taxes on any value over $25 million, as part of a settlement with the town, the Town Council learned on Tuesday.
Fairview runs the senior living community at 235 Lestertown Road in Groton and built dozens of new homes in recent years. In 2016, the nonprofit filed a lawsuit in New London Superior Court after receiving its Oct. 1, 2015, tax assessment and challenged it as excessive and unlawful.
The town argued at the time that the nonprofit should be assessed on the full value of its property once it exceeded $25 million. Fairview disagreed.
Attorney Eric Callahan, who represented the town in the lawsuit, said that on Nov. 20, the town and Fairview signed a 10-year pilot agreement, effective 2015 to 2025. The agreement is part of a court-ordered stipulated judgment and cannot be changed, he said.
Based on the agreement and current value of the property, Fairview would pay $100,000 to Groton — $60,000 in PILOT money, plus an additional $40,000 in taxes, or the amount due on the assessed value over $25 million.
At the time Fairview filed the initial lawsuit, it paid $260,000 in taxes under protest. Now that a settlement has been reached, any amount over the settlement agreement will be credited to the nonprofit for future payments, Callahan said. If Fairview had instead paid taxes on the full amount, it would owe about $200,000 more, Callahan confirmed in response to councilors' questions.
"But also I think part of what was being weighed here is there’s a risk that if we tried the case, we could end up with nothing,” he said.
The General Assembly granted an exemption to Fairview in 1893, and the exemption was raised over the years to $25 million. The real estate and personal property of Fairview was assessed in 2015 as having a combined full market value of $25,408,771, exceeding the $25 million for the first time.
Some discussion at the meeting focused on a state law that passed the legislature last year. Democratic councilors asked why state Sen. Heather Somers, R-Groton, introduced legislation that supported an exemption for Fairview while the town was dealing with the court case.
The bill that ultimately passed clarified that the tax exemption in place covered the first $25 million in value, except for the skilled nursing facility.
Mayor Patrice Granatosky, a Democrat, said the town and council agreed for quite a while that the exemption should be fought, and then there was suddenly a change.
"It seemed to some people that we were put in a very bad position when all of the sudden we went from opposing this piece of legislation, to seemingly overnight, supporting the legislation," she said.
Somers, reached after the meeting, said she introduced the legislation to clarify a 2012 law that former sate Sen. Andrew Maynard, D-Stonington, had gotten passed that year. Fairview has had a tax exemption for decades, is a viable business, and was threatening to lay off employees who are Groton residents, Somers said. The facility provides needed beds for Medicare recipients, and Somers received hundreds of calls and letters from taxpayers supporting the bill, she said.
Somers said if the council had questions about it, it could have invited her to the meeting to discuss it.
Former Mayor Bruce Flax, who attended the Tuesday night meeting, said the town also had gone after Fairview's tax-exempt status and the judge frowned on this. The town supported the legislation as part of the settlement agreement.
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