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January 16, 2005Centre ICE fights tax billCounty leans on dissenting officialByRecord-Eagle staff writer TRAVERSE CITY - Cash-strapped Grand Traverse County stands to lose its share of a $181,000 tax bill because a group of influential businessmen successfully lobbied county officials to oppose taxing a local ice rink and arena. County officials also threatened to fire equalization director Laurie Spencer if she refused to go along with shielding Centre ICE, an East Bay Township ice arena that also hosts the Detroit Red Wings' fall training camp, from paying property taxes. At stake is whether Centre ICE is a charitable endeavor exempt from property taxes or if it's benefited from an undeserved tax break since it opened in 1997. Spencer believes Centre ICE is obligated to pay property taxes, and last year pushed East Bay Township officials to add the facility to the tax rolls. That didn't sit well with local businessmen who control the Centre ICE board and a related corporation, many of whom have a financial stake in the facility. "We've been kind of trying to make this go away for a year without success," said Mike Anton, a local real estate developer, accountant and treasurer of Involved Citizens Enterprises, owner of the ice rink. "We're trying to get some pressure from the community to make them drop it." Anton also is a member of Friends of ICE, a limited liability corporation with about 25 investors who are owed $1.8 million of Centre ICE's $4.5 million mortgage. State records identify Anton and Joseph Quandt, a Traverse City attorney and ICE board member, as Friends of ICE members. Anton refused to name other members. In November, Anton, Pete Correia, president of Traverse City State Bank, and ICE president Dennis Phillips asked the county board to stop Spencer from filing an objection with the state if East Bay Township agrees to exempt Centre ICE from property taxes. County administrator Dennis Aloia told the county board he didn't support Spencer. "If she wants to stay employed she's going to have to follow orders," Aloia said. The county board's action surprised Spencer. "In 17 years of assessing I've never seen anything as political as this," Spencer said, "maybe because I don't know who the 25 people are." "I don't look at who it is, I try to do the job to the best of my ability, and is it right or is it wrong," she added. "Obviously, I'll have to be more aware of who it is in the future." TOWNSHIP RELUCTANT Spencer last year followed up on a complaint and discovered East Bay Township gave Centre ICE a property tax exemption, though without necessary documentation. She told reluctant township officials to put Centre ICE on the tax rolls or she would file notice with the State Tax Commission for improperly omitting it. The county board unanimously voted Nov. 24 to instruct Spencer not to file the notice and allow ICE and the township to reach their own agreement. Spencer, who met with the township's attorneys and assessor on Dec. 10, said she expected the attorneys to recommend the township let the state tax tribunal settle the question. But that didn't happen, because the township board met in closed session and tabled the issue until Feb. 14. Township attorneys were instructed to meet with representatives from Centre ICE to discuss the issue further, township supervisor Glen Lile said. For at least two months Centre ICE solicited comments from rink users through fliers and signs that requested people contact township officials and push for the exemption. The township subsequently was deluged with letters and comments from supporters. "It's such a huge, strong-arm tactic to get the township to stipulate so they must think they will lose at the tribunal," Spencer said. "Otherwise why go through all of this?" Anton said the campaign is to stop the township from wasting money. "Why do I want my elected officials to fight a case they have a slim case of winning and one I don't want them to win even if they could," he said. Anton estimates it will cost ICE $20,000 in legal fees to fight the issue at the state tax tribunal. "If we lose, and it's a very slim chance, we'll have to pay two years' worth of taxes plus interest and penalties," Anton said. "We can't absorb that." EXEMPT OR NOT? ICE is a nonprofit, federally recognized, tax-exempt organization. However, the federal exemption, contrary to what ICE contends in its fliers, does not apply to state property taxes. Several nonprofits, such as the National Cherry Festival and Mt. Holiday Ski Area, also in East Bay Township, are federally exempt but still pay property taxes. Attorneys for both sides have been working for more than five months to find clear legal precedent to exempt Centre ICE. To be exempt, ICE must qualify as a charitable organization that either lessens the burden of government, or one whose activities, taken as a whole, constitute a charitable gift for the benefit of the general public without restriction. In its literature, ICE notes that all neighboring ice rinks in Kalkaska, Wexford and Otsego counties are county-operated and subsidized by taxpayers. Anton said anyone can use Centre ICE and may watch club hockey for free or use the ice through rental or open skates. Centre ICE charges $170 an hour for ice time but Anton said charging fees to cover costs is an acceptable practice. "Our rental (prices) are on the low end for the entire state, and that is our objective," he said. If Centre ICE ends up having to pay property taxes, Anton said the price of ice time will jump to about $220 an hour. That's comparable to the cost of private rinks around the state but more than many government-owned rinks. The Kalkaska County Kaliseum charges $165 an hour. Spencer countered that ICE doesn't qualify as a charitable operation because it's primarily limited to renting ice to hockey and skating clubs, as well as the Red Wings prospects and training camps. One other rink in the state is operated by a nonprofit - the Detroit Skating Club in Bloomfield Township. It pays property taxes. Bloomfield Township assessor Rich Farms said Centre ICE appears similar to the Detroit Skating Club because it is an income-producing property that rents ice time to different groups. "That isn't the criteria for an exemption," Farms said. Anton said the Detroit Skating Club requires membership, something ICE does not. $1.3 MILLION REVENUES According to its latest tax return for the period ending Sept. 30, 2003, rental and other revenues for ICE total $1.3 million compared to $1.2 million in expenses. ICE has $932,000 in assets, including $110,000 in cash. It has one employee paid more than $50,000 in salary, Centre ICE executive director Terry Marchand at $51,250. "When you owe $4.5 million to the bank and you have $110,000 in the bank, that's not exactly a comfortable spread," Anton said. ICE makes interest-only payments on the $1.8 million loan for the first 10 years. Anton declined to release the interest rate. Most rink users aren't aware of details of the ongoing tax fight. They just want to keep their sports affordable and provide youth recreational opportunities. "Right now hockey is expensive enough," said Steve Peacock, a volunteer coach and treasurer of the Grand Traverse Hockey Association. "Two kids in hockey is $1,500 ... and that doesn't include equipment." Peacock said if ICE has to pay property taxes it will bump the cost of hockey by $100 per child. Peacock said a $100 increase will force many families out. East Bay Township trustee Beth Friend has children in hockey, and is well aware of cost worries. "I understand that completely; my hockey bill was $800 and that's a lot of money," Friend said. But she said the township board has to put its legal obligations first. Anton said ICE may have to close a sheet of ice if they lose the tax fight and demand drops. But he also mentioned another possibility to escape the tax burden. "Maybe we should sell the arena to the county," he said. See related story: Ski hill also asks for break on taxes Clearing the Record
This story originally attributed the following quote to Terry Marchand, when it should have been attributed to Mike Anton. "When you owe $4.5 million to the bank and you have $110,000 in the bank, that's not exactly a comfortable spread."
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