Thomas Breen photo
A view inside the Church of Scientology-owned 949 Whalley.
A rundown, tax-exempt former department store that has been owned by the Church of Scientology for 20 years crept across ward lines to inspire a debate among Lower Westville Democratic alder candidates about eminent domain, lawsuit “PTSD,” and what on earth the city should do with recalcitrant land-banking property owners.
Those topics rose to the fore Wednesday night during a debate between six-term incumbent Ward 25 Alder Adam Marchand and challenger Dennis Serfilippi.
The two candidates are set to square off in Sept. 12’s Democratic primary election, with Marchand at the top of the ballot because of his Democratic Town Committee endorsement. Ward 25 is one of six wards across the city that will see contested Democratic primaries for alder on Sept. 12.
Before an audience of two dozen Westvillians gathered in the Coogan Pavilion in Edgewood Park, Marchand and Serfilippi answered an hour’s worth of questions from New Haven Independent founding editor Paul Bass about issues ranging from the the dry cleaner’s conversion proposal on Alden Avenue to the traffic-calming “peanut” at Yale and Chapel to the local, state, and nationwide crisis around homelessness and persistent outdoor living.
Click on the video below to watch Wednesday’s debate in full.
Alder Adam Marchand, debate moderator Paul Bass, and challenger Dennis Serfilippi.
The ex-department store, long owned by the Church of Scientology.
Ward 25's redistricted bounds, with the Scientology site at 949 Whalley sitting just across the line in Ward 27.
Two different stretches of Wednesday’s discussion touched on blighted Westville properties and on a citywide tax appraisal approach that consistently undervalues some of the most expensive real estate in New Haven. Marchand and Serfilippi were asked how the city should address properties like the Church of Scientology-owned, ex-Hallock’s department store at 949 Whalley Ave., which sits just across ward lines in Ward 27 — as well as with how aggressive the city should be in taking on problem properties.
The Church of Scientology bought that ex-department store building in 2003 for $1.5 million. Since then it has remained vacant, blighted, and decaying. The building opened in the 1930s as a Masonic lodge.
According to the city’s online tax records, the church, which operates out of a rented commercial storefront a block away across the street, has not had to pay any property taxes on 949 Whalley in years. The property remains tax-exempt today despite dissent between the city’s tax assessor and the Board of Assessment Appeals about whether its extended non-use eliminates the owner’s claim it’s being used for nonprofit-eligible religious purposes.
The city last appraised the property as worth nearly $3 million. The Church of Scientology last won approval from the City Plan Commission in November 2018 to renovate and revive the vacant building into a center for worship and public outreach — a project that it has yet to follow through on.
A representative from the Church of Scientology did not respond to an email request for comment by the publication time of this article.
What should the city do with this property? Bass asked the Ward 25 Democratic alder candidates on Wednesday. Given that there are “no easy answers” for this property, or others like it.
Dennis Serfilippi.
Serfilippi, a New Haven native and chief financial officer for tech startups, said that the city’s tax assessor “does have jurisdiction” over whether or not this property is deemed tax-exempt for religious purposes. “The assessor’s office does have the opportunity to take action,” he said, in the way that cities like Philadelphia have challenged the tax-exempt status of Church of Scientology-owned properties.
Serfilippi said the city then needs to make sure local government has a fund of cash available to pay lawyers to go to court if the church were to file suit over the decision, and when large landlords challenge tax appraisal decisions. Such a fund would ensure “we’re going to have the firepower to combat” landlord lawsuits.
“We need to figure out what additional tools we can get through legislative action, through partnerships with the state,” said Marchand, who chairs the Board of Alders Finance Committee, serves on the City Plan Commission, and works as a health benefits negotiator for Yale’s UNITE HERE Local 34 union.
As an example of such alternative routes to dealing with difficult properties, Marchand reference a proposal from the late former city official and development booster Brian McGrath to “reinvigorate the ordinance around neighborhood districts and changing the anti-blight ordinance to give the city powers of eminent domain to compel a negligent landlord to sell a property and put it on the private market.” (Click here to read a previous article about Democratic mayoral challenger Liam Brennan’s embrace of local government using eminent domain to crack down on long-blighted properties.)
McGrath’s eminent-domain-reviving proposal “hasn’t gone anywhere yet,” Marchand said. “That is something we need to revisit” and talk with the city’s economic development office about whether or not it’s the right way to move forward. “If it’s not that proposal, [then] what other proposal can we act on to give more teeth to our ability to deal with property owners sitting on blighted properties.” (Marchand stressed that he was using McGrath’s pitch as an example, not necessarily endorsing it.)
“I think we have the laws and measures in place” already, Serfilippi countered. “We have the ability” now to deal with properties like 949 Whalley and other long-blighted spots around the city. “What we don’t have is the leadership, and we don’t have the willpower to do it.:”
He pointed by example to the city’s (blight lien-delayed) bid to purchase the former Monterey jazz club and other Ocean Management-controlled properties in Dixwell as proof that the city can pay above market value for important, long-neglected properties if there’s political willpower to do so.
Alder Adam Marchand.
Later in Wednesday’s debate, Bass asked both candidates about the city’s underappraisal of high-end real estate when determining a property’s fair market value for tax purposes. Megalandlords and out-of-state investors have routinely bought and sold low-income rental properties and upscale development parcels for hundreds of thousands of dollars more than the city’s official tax appraisals. As a result, the city has missed out on tens of millions of dollars of taxable property value among the most expensive properties in town, thereby shifting that tax burden onto everyone else.
The city has latitude over how best to balance the income and comparable sales approaches in the formula it uses to determine a property’s value for tax purposes. It could risk lawsuits from wealthy investors if it chose to tax their properties at closer to their true market values. City officials and other real estate experts have argued, meanwhile, that investors often overpay for properties — and have pointed out that state law specifically bars assessors from “chasing sales prices,” meaning that assessors are legally prohibited from rushing to change a single property’s assessed value solely based on that property’s latest sales price. Instead, assessors must model out that property’s and all other properties’ worth by considering income, sales, and cost. (Click here to read more on this issue.)
“I think you can be more aggressive in terms of valuing the properties without leaving the norms of the real estate industry,” Serfilippi said. But to do that, the city needs to have “a legal fund and the right attorneys” who can go to court to defend the city’s decision if and when large landlords sue. Serfilippi also said time and again that the city assessor needs to live in New Haven, per the requirement of the City Charter, and that enforcing such a residency requirement would help this situation.
Marchand replied by directing the debate’s attention to a problem of city staffing.
“I have perceived over many years that some of our city departments are risk averse because of the kind of PTSD that our city has around lawsuits,” Marchand said.
He said he wasn’t just talking about “very high profile lawsuits” with very high awards. “The volume of lawsuits against the city is huge,” he said.
And, he continued, “we’ve lost a lot of attorneys from the Corporation Counsel’s office” over the years in part because “we weren’t paying enough. They’re hard stressful jobs .. and they’re making far less money” working for the city than they would in private practice or for other municipalities.
949 Whalley Ave.
A building permit from 2019, still posted.
Marchand said that, over the last several months, the city and the alders have approved a number of ratified collective bargaining agreements “to bring those rates of pay up” for city employees like the lawyers in the Corp Counsel’s office. “That’s making a difference.”
He also pointed out that the city and the alders have increased the pay ranges for top city officials to make long-vacant positions like that of the controller and IT director more attractive to prospective applicants. “We have not been able to hire for certain positions because we’re way under market.”
“I think having a fully staffed group of attorneys in the Corporation Counsel’s office who can develop the expertise as litigators [and] specialties in all areas is going to put us in a position in the future to take more risks,” Marchand continued. “But we’ve got to build the team up to do that.”
Yale land banks. Who's stopping them????