KINGWOOD — Preston Commissioners voted to exonerate the county of $60,785.36 in property taxes the assessor says it owes on the former Kinney Shoe property.
A year ago, Assessor Connie Ervin told Commissioners Craig Jennings, Dave Price and Don Smith she was assessing the county for 2013-‘18 taxes and interest. She said it was owed because the county didn’t collect rent on the property, during that time, so it wasn’t being used for public purposes.
Preston Prosecuting Attorney Melvin C. Snyder III gave his legal opinion Monday that the county is exempt from taxation on, “property belonging exclusively to any county … in this state and used for public purposes.” He cited state code 11-3-9(a)(3) and asked that the tax assessments, “be vacated because they were never legal.”
Ervin cited another section of code, 11-3-27, saying that the commission could not exonerate its own taxes. Ervin said she hadn’t seen Snyder’s opinion to review earlier but will review them now.
“The question really resides in my mind of the legality of this exoneration because of 11-3-27, stating that relief in the county commission from erroneous assessments must be signed by the county assessor. I’m not saying that I’m not willing to sign that, but I need to review this information before I would sign this,” Ervin said.
Ervin said that when she appeared before the commission last year, she offered to help them appeal to the State Tax Commissioner, but, “that process was never initiated.”
She will not go to court to try and enforce the tax, Ervin said, because she doesn’t think that’s in the county’s best interests.
“Would you be willing to submit this to the West Virginia State Tax Commissioner?” she asked.
“I don’t understand what you’re trying to do,” Jennings said. “The county doesn’t pay taxes. Why would we write ourselves a check to come back around to us?”
Ervin argued that counties do pay taxes. She said the county building commission paid taxes on the annex property when it was bought. Jennings said that’s only because they were owed when it was bought.
“I don’t see why this has risen to this level of whatever it is,” Jennings said.
“When I was elected, I vowed to uphold any constitutional amendment or legislation that I could find,” Ervin said.
Part of the problem, Jennings said, was a loss of institutional knowledge: the company changed hands a couple times over the course of the lease and county officials changed.
The property was developed in 1970 as the Kinney Shoe factory. It was conveyed to the county by the Preston Business Development Corporation, as tax-free bonds were used for the development.
In March 1995, the commission signed a 10-year lease with Sheidow Bronze for the building. It included options to buy the property for $100 at the end of the lease. In 2005, the company was owned by Mathews Bronze, which did not renew the lease or pay rent.
No one noticed until Kingwood approached the county about getting a utility right-of-way on the land, in 2016. Then the county started negotiating a new lease, and in July, the county transferred the property to the Preston County Economic Development Authority.
In December 2017, commissioners agreed to release Matthews from all claims for back rent in exchange for a one-time payment of $35,000.
Snyder cited three court cases that said taxes should be cited against the lease holder, not the public entity. One of those was a Monongalia County case recently decided by the State Supreme Court Case. The , court ruled the county could not assess WVU for taxes on land it leased to private developers.
Snyder said that technically the lease never ended for Matthews, because it did not pay the $100 and take the property or vacate the premises.
Jennings said his fear is, “I can’t imagine being a business that would want to come in here now, work a deal with the EDA, with us, as far as the taxing, nontaxing, and then have something like this loom over them.”
Ervin also said she objected to the application to correct taxes because her signature is not on it. “A tax concern comes to the county commission after a taxpayer has gone to the assessor and nothing could be worked out,” County Administrator Kathy Mace said. “That’s why this comes as a tax concern before the commission.”
And commissioners act on those, relying on the prosecutor’s opinion, Jennings said. Many of the forms have been prepared in conjunction with the assessor’s staff, Mace said.
Former Assessor Terri Sypolt was at the meeting by happenstance, she said. “I did not know it was on the agenda, so I wasn’t here to support either [side],” she said.
Sypolt was Preston’s assessor for 16 years, ending in December 2015.
The question of the taxes, “was brought to my attention by an individual that there could be a situation,” Sypolt said. “And that’s, I think, when they were first negotiating,” with Matthews about whether a lease existed. “I would have assumed that when they did the negotiation, that the taxes would have been taken care of at that time in the negotiation.”