News

County tax office examining nonprofit status of Opportunity House

Valued on the tax books at $1.9 million, the Opportunity House would owe $20,539 a year in property taxes if it lost its tax exemption.

By Bill Moss, Published: January 24, 2022

The Opportunity House, which faces a lawsuit challenging whether it is operating legally as a nonprofit, could also be forced to defend its exemption from property taxes.

Henderson County Tax Administrator Darlene Burgess confirmed that the Opportunity House is among the nonprofits her office is reviewing to determine whether it should keep its tax-exempt status.
“We’re definitely in the middle of doing a compliance review on them, made several visits out to the property and we’re also reviewing the court files and other information we’ve got,” Burgess said. “I’m not sure when it will be concluded but I don’t think it will be too much longer.”
The tax office’s review of numerous nonprofits comes amid the appeal of a blockbuster of a case — the tax office’s revocation of the tax-exempt status of Kanuga Conference Center. That case, which could cost the Episcopal Church retreat just over $1 million in current taxes, back taxes and penalties, is currently on appeal before the county Board of Equalization & Review.
“We’re reviewing all of them,” Burgess said of nonprofits that are exempt from paying property taxes. “We’re taking them by category — what statute they’re exempt under. We’re making sure that we go out and send appraisers to make sure we’ve got the right data on these properties.”
Burgess said in December that it’s too early to say whether the Opportunity House will lose its tax exempt status.
“It depends on what we find in our compliance review,” she said. “Are they renting that out to for-profit businesses for retail purposes or are they using that in compliance with the statute they are getting the exemption under?”
Asked whether the Opp House’s lease of space to a music school, florist, medical transportation business and cellular phone store complies with state law governing nonprofit organizations’ tax-exempt status, she said, “I’m sure that we’ll get all that analyzed in conjunction with our compliance review.”
Although Burgess said the compliance review officials had sent a letter to the Opp House seeking information about its operations, Ken Rhoads, the executive director of the agency, said he had received nothing.
“This is all new to us,” he said when a Lightning reporter asked about a tax office inquiry. “We don’t know anything about what you’re talking about.” Renting to for-profit businesses, he said, is permitted under the law. “I know that’s OK because Pisgah Legal rents space to Starbucks up in Asheville. That’s an income stream. That’s all that is. I don’t think we’re doing anything that anybody else is not doing.”
Based on the current combined city and county property tax rate of $1.081 per $100 valuation, the Opportunity House, which is valued on the tax books at $1.9 million, would owe $20,539 per year in property taxes.
The Community Foundation of Henderson County filed a lawsuit in December 2018 after Opp House officials refused to respond to the foundation’s questions about its operations and financials. After a judge twice denied the Opportunity House’s motions to dismiss the lawsuit, the case is on track to go to trial this year. McCray Benson, the president and CEO of the Community Foundation, welcomed the tax office’s compliance review of the former senior center, which once had hundreds of dues paying members and a robust calendar of dances, crafts, art shows, bridge club games and other activities.
“I do think they should do that (investigation) just because it seems like there’s been no nonprofit activity or programming and yet they still operate as commercial property,” Benson said.