How to pay less property tax, Part 8: mis-zoning

Inconsistent or flat-out wrong zoning saves some property owners a lot of money

By Will Collette

Introduction: How to save on Charlestown Property Taxes
Part 1: Waiver of interest
Part 2: Appealing your assessment
Part 3: Tax credits for the blind and disabled
Part 4: Farms, Forest and Open Space
Part 5: Veteran’s Tax Credits
Part 6: Senior Citizens' tax credit
Part 7: Get Religion

This article is part of a series on Charlestown property tax policies. All property owners had to get their new - increased - tax payments in by the end of July. Now, most of us are looking at paying our Fire District tax.

I think most taxpayers understand that not everyone pays the same tax rate, sometimes for good reasons. Sometimes not. This series attempts to give readers the truth of Charlestown taxes and the opportunity to see if they qualify for some of the available breaks.

This article is an update of one I wrote in July 2012 about how taxes for some Charlestown tax payers are skewed by misclassification. An example: the 118 acre Charlestown segment of Shelter Harbor's golf course, which is zoned "Open Space/Recreation" even though it contains a 25,280 square foot office/storage building.

The Town of Westerly, which holds the bulk of the golf course, taxes it at the commercial rate.

These and the other problems raised in 2012 were supposed to be addressed by the Planning Commission, run by Charlestown Citizens Alliance leader and Planning Commissar Ruth Platner.

Very few have been, most conspicuously, Shelter Harbor.

Note that the original article begins talking about the Heavers property. Since that article, Barbara Heavers has joined the Planning Commission on the CCA Party ticket. In addition to the property features described in the article below, Ms. Heavers also has a rental property on the land which she admitted she failed to disclose, as required, to the RI Ethics Commission - until I filed a complaint calling her out on it.

Here is my original article on one back-door way CCA Party supporters get to pay less property tax, where the basic facts stand pretty much as they were three years ago....

At the July 9, 2012 Town Council meeting, Town Planner Ashley Hahn-Morris presented the Council members with an unexpected problem. Or at least something that seemed like a problem. It turns out it could be a problem of a very different nature, so please read on.

In an effort to resolve an apparent error in the zoning of a 161-acre parcel of farmland in the northern end of town owned by the estate of Richard Heavers, Ashley discovered that the problem was not an isolated one.

At some point in the past, when lands were consolidated to form the Heavers property and records were switched over to a new system after zoning law changes, the entire 161 acres were zoned Open Space/Recreational, even though it was the site of a home and a farm.

While the Council was quite willing to help Heavers’s widow with a zoning change to residential – so she could get an appraisal and place the land under a conservation easement – they didn’t know what to do with the many other inconsistencies Ashley uncovered. Click here for Ashley’s memo.

In fact, Mrs. Heavers got what she wanted in October, 2012 when the Council approved Ordinance #354 changing the zoning on her 161 acres to residential so she could then get a conservation easement and save even more in Charlestown property taxes. The whole shabang - 161 acres, house, farm, garage, rental, out-buildings - is now assessed at $353,100. Nice!

This was before she joined the Planning Commission as a CCA Party nominee in 2014.

These inconsistencies lead to some much broader – and more serious – questions for Charlestown. Has inconsistent, and possibly erroneous, zoning led to incorrect property valuations? How much property tax revenue has Charlestown lost because of properties wrongly assessed as open space? If there are lots of properties improperly zoned as open space/recreation, how will this affect Charlestown’s policy toward open space?

From Town Planner Ashley Hahn-Morris's memo to the Town Council

Ashley worked with Tax Assessor Ken Swain and our unsung GIS superstar Steve McCandless to collect the data and put together maps that give the town a new way of looking at open space.

click to enlarge - northern half of Charlestown (green is open space)

Ashley presented the Town Council with a complete list of all Charlestown properties zoned as Open Space/Recreation [click here for the list] and two maps – of the northern and southern halves of Charlestown – to show where those properties are located.

There are just under 100 properties on that list. About half of those properties (47) are owned by entities that are neither public (governmental) nor nonprofit and might be improperly zoned.

Twenty-two belong to private individuals, including the Heavers estate. Eighteen are owned by businesses and private clubs. Seven are owned by our local Fire Districts. Two are owned by utilities.

click to enlarge - southern half of Charlestown (green is open space)

I believe the seven Fire District properties should actually be categorized as nonprofit since that is how the fire districts are usually organized (although, as we'll discuss later, most of Charlestown's "Fire" Districts don't actually have anything to do with fighting fires). Charlestown's two fake fire districts - Central Quonnie and Shady Harbor - also own a bunch of choice property on which they pay little or no taxes and that have absolutely nothing to do with fire-fighting. Unless playing tennis is training for fire fighting.

With their taxing powers, they could also be classified as quasi-municipal. But either way, they are in a different category than, for example, the Shelter Harbor Golf Club.

Of the twenty-two parcels owned by private individuals and zoned open space/recreational, 17 are half an acre or less. Many of them are clusters of waterfront plots measuring around one-twentieth of an acre. Many of these small parcels are also subject to conservation easements granted by the owners to one of Charlestown’s nonprofits.

In addition to the 161 acres owned by the Heavers estate, there are only four other private owners with properties bigger than half an acre – one at 10.71 acres, another at 4.49, another at 1.37 and the fourth at 0.66 acres. Again, these property owners may have granted conservation easements to one of the nonprofits.

The vast majority of Charlestown’s open space acreage is owned by:

• The State of Rhode Island, with twenty-five properties, the largest ones being Burlingame Park, the Burlingame Management Area and the state beach at the Breachway.
• The Federal government with five properties, the largest being the Ninigret National Wildlife Refuge.
• Non-profit organizations, with sixteen properties zoned as Open Space/Recreation, but also holding conservation easements on a number of the privately owned OSR properties. These non-profits include the Weekapaug Foundation, Nopes Island Foundation, Audubon, the Charlestown Land Trust and the YMCA.
• Town of Charlestown with three properties – Ninigret Park and the two town beaches.

There may be some properties among the 22 owned by private individuals that are not bound by a conservation easement or not under the Forest, Farm and Open Space tax program. However, it seems unlikely there is a serious zoning inconsistency problem with these properties, aside from the Heavers estate, which has been resolved.

That leaves the 20 properties owned by businesses. I am not including the seven Fire District properties in that count since they can hardly be classified as "businesses".

Here are those owners:

• Mobile Sportsfishermen, Inc. with five properties at 5.52 acres
• The QEB Association (Quonochontaug East Beach Association) with seven properties at 6.78 acres
• The Marsh Gun Club with three properties at 4.06 acres
• The Quonnie Yacht Club with one half-acre property
• The Shelter Harbor Golf Club with 117.77 acres
• The Bradford Sportsmen’s Club with 3.13 acres
• SNET Cellular with a 0.17-acre cell tower site and
• Narragansett Electric (National Grid) with a 5.49-acre electrical easement

These properties are assessed and taxed as open space. Most of these owners (with the exception of the Bradford Sportsmen’s Club and the two utilities) occupy some of the choicest and highest-valued property in Charlestown, with Shelter Harbor leading the way.

It looks to me like the real problem is centered on roughly 140 acres of business property in primo locations that are valuated and taxed as open space.

Shelter Harbor: Open space?

Indeed, the Shelter Harbor Golf Club (right), with its 118 acres of prime property and 21,200 square foot luxurious headquarters, is only assessed at $1.8 million – only a fraction of the assessment of some of the luxury homes in that area that are built on three to five acre sites. [The current assessment is $1.775,000].

Compare Shelter Harbor’s to Charlestown’s priciest property at 21 Dowd Drive, quite close to Shelter Harbor. It is a 7200 square foot McMansion on only 2.78 acres but is assessed at $6,018,000. [The Dowd Drive property is now assessed at $6.4 million]

Let’s do the math: Shelter Harbor has 42 times more prime acreage than 21 Dowd. Its building is three times bigger. But its tax assessment is two-thirds less. And still is.

Ashley presented the Town Council with three options to fix the inconsistency in the Town Zoning Ordinance and how it has been applied in reality:

From Ashley Hahn-Morris's memo to the Town Council

The other option could be to revise the definition of open space to include private property that is restricted by a conservation easement. I believe the Fire Districts should be recognized as either nonprofit or quasi-municipal agencies – or we could simply add Fire Districts to the open space definition.

That leaves the businesses that, in my opinion, should be taxed as commercial businesses, not as open space/recreational. The Shelter Harbor Golf Club and Ninigret Park - or even the YMCA camp - do not belong in the same category, either for land use or tax assessment purposes.

But regardless of what approach the Town Council decides to take, Planning Commissar Ruth Platner is bound to be disappointed. For months, she has been campaigning for the town to revise the way it defines “open space” to take property off the list.

Now why would Charlestown’s leading open-space-at-any-cost advocate want to actually reduce the amount of open space/recreation property listed on Charlestown’s books?

Platner, and the CCA which she leads, hates it when critics of Platner’s various open-space acquisition schemes – most prominently Y-Gate – cite the fact that more than 40% of Charlestown’s land is classified as open space. 

She wants a much lower number so she can argue that we need to acquire more and more and more and more open space. When I first heard Ashley’s presentation, I felt a cold chill that this was another variation on Platner’s agenda.

Indeed, it may still be just that. If you only listened to Ashley’s alarming presentation that Charlestown may have wrongly zoned a lot of acreage as open space when it’s not, then that argument that we already have half the town locked up as open space loses credibility.

However, if you actually look at Ashley’s data and the maps, the total amount of acreage that seems to be miszoned may be around 300 acres. 

This becomes more of a problem of some businesses not paying their fair share in taxes, rather than an exaggerated count for the amount of open space/recreation acreage we have in town.

I think the first issue that ought to be addressed is why the country club at Shelter Harbor or the Quonnie Yacht Club and other choice Quonochontaug business properties gets taxed as open space while the rest of us pay regular rates.