By LARRY NORENE
How many more property tax exemptions on “for profit” developments can our tax bills stand? I’m not talking about the familiar senior citizen, veteran, residential, or the nonprofits, (though there are thousands of nonprofit exemptions), but the newer Ethan Berkowitz-era exemptions for the wealthy and politically connected.
Some people assume that the property tax on an exempted property is lost to the tax collector. Not so. The same total amount (the budget) is collected from the remaining taxable properties. The rate for everyone goes up accordingly when someone else doesn’t pay. Just like dining out with a group of friends; if someone leaves the table and doesn’t pay their share, the remaining diners must pay their share of the bill.
It costs the Muni treasury nothing to grant exemptions, but it costs us.
Here are some egregious recent examples of the new Berkowitz era exemptions:
- The new multimillion dollar neon building at 5th and F. It’s the newest and nicest, great highly profitable lease to an oil company owned by very wealthy developer/owners. It is exempt for 10 years. Millions in tax dollars, plus anything else that developer builds on that whole block and his property on Northern Lights Blvd is slated for exemption.
- The hotel at 4th Avenue and C Street is exempt for 10 years. Wouldn’t the other hotels like a break like that, not to mention that they will pay more in property taxes because of the Mark Begich deal?
- SpanAlaska Trucking, a subsidiary of a $4.5 billion Manson Lines built a $26 million warehouse – exempt.
- In the MLS listings of new downtown $840,000 condos, the Realtor touts that the new buyer will be exempt for 12 years!
How did that get by legal scrutiny? Although the Muni carefully crafted ordinances to exempt developers, they must realize that creating a legal right for a property not to be taxed, regardless of ownership, creating additional value for the developer to sell, is beyond hard to swallow for the rest of us. All other exemptions of all types expire upon change of ownership or use.
The public hasn’t heard much about this, but how could they? The assessor contends that exemption information is confidential, even after freedom of information requests. Administration approval bypasses the Assessor and goes solely to the CFO (a political appointee). Meetings are private. Assembly approval is by resolution, rather than ordinance, thus no public hearing, and is buried in a consent agenda. The dollar amounts involved are never shown, and these exemption issues are handled with Assembly in private work sessions. The truth is that there is nothing in an advalorum tax system that is not subject public review. Tax rolls are supposed to be open, reviewable, and verifiable.
Although there are thousands of exemptions totaling $18-20 billion out of a $57 billion tax roll, the recent abuse of the system warrants a review of at least the new exemptions on FORPROFIT entities. Full disclosure and transparency including financial impact, legal review, and expiration upon sale are needed. I suspect that some of the Assembly has been “compromised”, but we will wait to see if anyone even wants to have a conversation about it.
Expect to hear only crickets.
Larry Norene is a real estate broker and retired real estate appraiser.
Thank you, Larry, for trying to shine a little light into this dark corner of Municipal fiscal policy.
Church planters will have a problem with this. They want schools, campuses, camps, coffee shops, all kinds of developments that compete with other businesses but pay no taxes and pressure teens and stay at home moms into “volunteering”. If someone has a business idea, they pursue it through a church so it can’t be taxed or regulated. It worked great until we had 48 churches in North Pole, each.one buying more and more land.
In this particular situation, it’s not the church.. It’s several Assembly members that own several building and supposedly using it for housing the homeless. abuse of ownership and rental.
Everybody uses the infrastructure in Anchorage so everybody needs to pay taxes.
The best way is to replace property taxes with a sales tax so everybody pays to use city infrastructure.
No nonprofits as every body uses public services.
Most people don’t know that you never really own your house as the city keeps the title as leverage from non property tax payment.
Pushing a sales tax is an extremely bad idea. Government would keep your property taxes, take the sales tax (and increase it to the max) and use it to grow more government. If you need proof of this, just look at any major city in the U.S.. New York, Chicago, Los Angeles. This is where you are suggesting we go.
You did not read what I said
It’s one tax or the other not new taxes.
You didn’t understand what HE said. If there’s a sales tax, the property tax won’t go away or get meaningfully reduced, you’ll get a new sales tax ON TOP of the existing property tax.
How right you are. If anybody thinks a sales tax will lower property taxes is in for an expensive lesson.
I SAID ONLY ONE TAX NOT 2.
Anybody that’s for more taxes is on the wrong side.
The part you don’t get is that all the nonprofits and people from the valley and other out of town workers use our infrastructure and they don’t pay to use our resources so a sales tax makes everybody pay and when it goes up they will vote.
The tax break on Mystrom’s son’s condo development (1/2 – 1 million per unit) was reported on.
The rest is news to me; but of course I realize Mark Begich deserves his “cut”.
The Muni also sold Begich a large lot by his hotel for less then it was valued (because he’s Mark!)
Where are our lawyers? The conservative lawyers?
That’s how the Left deals w/ things. They go to court.
How is this legal?
Did Peach Investments & Span Alaska grease somebody? It would seem so.
A few more years of this corrupt bunch & we will be Haiti (Cuddy Park is already Haiti)
That’s a good question. Apparently a lot since you keep voting the way you do.
Anchorage is getting the rulers Anchorage votes for. This is what you want, or 80% of you wouldn’t sit on your butts when it’s time to vote.
You did this to yourselves.
You make it sound as if we have legitimate elections in Los Anchorage.
Separating the municipal “elections “ from normal traditional election times is a tool. As is the mail-in ballot disbursement.
Mayor Dave getting through was a fluke, boy are they pissed. Displayed daily for all to see.
Change those two. The rest will cure itself.
Barb Jones will dispute your claim all day long.
Under her watch she made sure all phony ballots were rejected due to “improper signatures”
Something about them just didnt look right!
Its hard to get the signature to match when the wrong boxes are checked and Chris Constant showed up with that beautiful bouquet of flowers…. (for my hard work)
Truth
Truth!!
This is like student loan forgiveness. People trade their services in a much needed area that directly benefits society, in exchange for paid training. A win win. A non profit functions in much the same way. To some, it may not seen fair. To the jealous and the bitter with chips on their shoulder, it is sinful. It takes the burden off society and taxpayers by providing services. Always look at the big picture first. Without nonprofits, you would be footing the bill in one way or another.
First of all, it should be clear that some groups are definitely profiting from these so-called nonprofit organizations. There’s your “big picture “. And it’s also a fact that the common taxpayer is footing the bill for this loophole. It’s apparent that you are among the many who are being fooled.
People have always taken advantage of loopholes.
Most of the nonprofits pay the personel in “working” for the non profit a really great wage and the income to the non profits I looked into goes primarily to “operating costs” and wages. Very little is actually spent on the stated mission.
Realistically we should probabaly do away with all exemptions. A prop 13 type freeze for ones’ residence is the only one I would be in favour of but I doubt we could ever achieve the elimination of existing exemptions. Too many strong lobbys with deep pockets.
If all paid property taxes then we would be paying less taxes, the 13 house exemptions for ABT were given because Jerry was saving souls or so we thought.
You left one off of the list, do you consider the Associated General Contractors a tax exempt non-profit? They pay $0 in property taxes for their property on Schoon Street. Non profits for non charitble purposes should not be tax exempt.
I also believe the anchorage jail is also owned by the same. Under a 100 year contract.
Mr. Norene has raised here the same questions I’ve had for years. All those exemptions he listed are good-ole-boy deals. He suspects that some on the assembly have been “compromised”. I quit suspecting it a long time ago. But, what to do about it and how?
Wake up Anchorage property tax payers!
You are being taken advantage of by the wealthy, politically well connected. Shame on the municipal assembly and administration!
Great research and exposure of the inequities in Anchorage taxation!
Thanks Larry!
Mark Begich bought his hotel during COVID and was given a no bid contract to let him get 100% Occupancy for years which helped pay for the Mortgage. Then, when enough no bid dollars went to him, (I never saw what amount the Muni paid for each room, I don’t think it ever got published) he withdrew from the program, kicked everyone out and remodeled the hotel and is now a luxury hotel. It pays no property taxes now for 10 years.
While I support this idea and rehabbing downtown, don’t let the current Assembly fool you. Meg gets her cut, Chris gets his cut, it is a real swamp while trying to help the poor. The poor is just the excuse to get rich
As I remember the rates were published somewhere.
$100 a room per night – 2 people per room.
This was considered a “bulk rate”, but is actually pretty close to “winter rates” here in ANC.
This was put out as an offer to any hotel that was interested & 3 (maybe 4) hotels took the offer.
Begich is a big landlord, a real estate agent & no fool.
He knows a good deal when he sees one.
A bigger “sin” (imo) is the fact that our politburo sold him a chunk of land next to his hotel at a 25% off discount. THAT’S corruption and no one is doing anything about it.
Where are the conservative lawyers? Did they all leave state already?
Good article Larry. How can we place it on Next Door. That should generate lots of comments.
The Taylor shop on the corner of Benson and Arctic across from McDonald’s pays no Tax.
They have a radio station there and that qualifies for non profit even tho the building has a business and rentals or other housing. The Corner of Arctic and 36 th pays no taxes even though it has a coffee cart on it. There are hundreds of places that don’t pay taxes. Look up a place on Muni.org and find out.
Democrats like Ethan are very proficient at greasing the palms of their fellow gangsters.
With the likes of Constant, Felix, Zaletel and the rest of their cohorts soon to be lead by Constants puppet LaFrance, investors can expect many more investment properties be placed on the exemption list.
The silver lining for them from this dark cloud of greased palm Assembly activities will be the bigger list of eventual foreclosure of private property homeowners who will lose their homes and be sold on the courthouse steps to the deep pocket of cash holders due to the increased tax burden on families.
Its a very effective way of eliminating the undesirable homeowners and improving the market value for their investment buddies from California.
If Anchorage voters dont wake up and vote out the marxist rulers they will continue their mafia style private meetings with cash payouts to themselves under the table or “gifts” in some form or another.
If the muni reads this they need to do a property exemption audit. If i know 2 people who are getting senior exemptions that dont live in the muni there must be many more
Tuesday’s assembly meeting includes an ordinance (2024-38) which opens the doors for exemptions directly to individuals. Exemptions are a clever way to provide financial support outside the budget and the tax cap.
Using our tax regs to ruin society & make profit.
They have learned well from our Federal Overlords and their 7000 page tax code.
Problem is the Republicans do the same thing when in power.
How about requiring a plaque on buildings that are exempt from property taxes? What is wrong with truth and transparency?
Thanks for a great story, Larry Norene.
.
Imagine what the impact to Anchorage property-tax payers will be if Eaglexiters are allowed to leave and take their property tax payments with them.
Eagle River residents should leave. We aren’t the biggest user of our taxes, yet we pay some of the highest property taxes. I pay over $14,000 a year for my house. The Anchorage Assembly has 2 Conservatives on it, both are from Eagle River. We are tired of Anchorage dragging us into a Portland, San Francisco Hell. We don’t want anything to do with Drag Queen Story hour. We want freedom, personal accountability and American values. We need to cut ourselves free of Anchorage.