by Gorbatchov 32 Replies latest jw friends
Gorby - Why not long term leasing them for devolpment by a third party?
This is a great point. They could have remodeled their river front properties into apartments, lofts, offices, etc... Using all their FREE labor force. Still kept ownership of the buildings, hired a Management Company and been cash flow rich landlords, while the value of their assets grew!
I think that the main factor here is taxation, for a long time the State and City have been aggravated for the tax exempt status of the real estate holdings of the Watchtower. it is very likely that such change in property use will for sure result in a new taxing status.
Hecce: your right. Tax exempt status is not just based on who owns it but what it is being used for. While Watchtower would let non Bethelites stay in the Patterson in they had to pay real estate taxes on that land. There is even a court case in Pennsylvania because a congregation bought an empty piece of land and the city denied that piece of property tax exempt status because there was no "church" on the land, and the court found that for there to be tax exempt status the land has to be used for the religious services or to advance their mission.
Thanks John Davis for the input on the taxation matter.
There are two other explanations that I have heard thru the "grapevine" and they have to be taken as just rumors. I will post the first one, I was told that 9/11 had a profound effect in the WT brass and that they saw the event as a sign to "run for the hills".
Maybe, I don't know.
The lawsuit where the judge froze one of their properties had to be a major factor. Cash flow issues probably another factor as well.
Something to keep in mind, under the tax structure in the US an arrangement like the Patterson Inn and the land lease in Brooklyn will be a commercial enterprise and the WT will he liable not just for the property taxes but also for the income taxes generated by the property.
It will get very complicated and subject to Internal Revenue Service controls.
Also if Watchtower rented out the buildings, they would have one of two options. To either hire people to manage the facilities such as renting out units, cleaning and maintaining units, which would be a huge expense. The other option would be that they would have to keep a contingency of volunteers on site, and that would cost having to house, feed and other basic needs that other bethelites receive. If you are renting to commercial clients that are spending big money to rent out a unit, they expect repairs to be done immediately not when an LDC volunteer can make it or if a Bethelite can drop their normal job to get down to Brooklyn from Patterson, Walkhill or Warwick, they would need people in the city ready to repair any issue immediately.
I worked in real estate asset management for twenty-five years. There are a lot of factors at play in the decision to sell a property. We do not have most of the information the WTBS would have used in making a decision to sell and leave, therefore anything we think of the decision is pure speculation. There does come a time in the life of a building when selling it makes the most sense.
There are numerous problems with the scenarios outlined above. Those are old buildings and getting them up to code and rebuilding the core systems would have taken a huge amount of cash. A new owner can take advantage of the tax code to make that worthwhile. The WTBS can't make use of those advantages. Also, they can't use volunteer labor to rebuild them for commercial purposes or to maintain them after they are put back in service.
As I said, the only thing we know is that it looked like a good plan to them. I think there are good reasons to think they may have been right.
JeffT
I agree with everything that you are saying. My only doubt as to what they did, is dumping everything at once. Considering that their properties are prime real estate I would think that a gradual sale of the properties was a better idea.
I warn you this is coming from a guy sitting at home in his pajamas.
The trouble with selling in stages is again if they are not actively being used for their "charity" mission it can be tasked. a charity cannot just sit on empty building forever and not do anything in them. Also, you would have to split up the bethel family to another site and keep support people to keep maintaining the sites.
