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Housing project without non-profit status

By   /   November 14, 2011  /   Comments


Loss of non-profit status, differences between cost and current value among questions

Dalewood Estates sits on the side of Willie Pitts Jr. Road, appearing for all to see as a completed development except for the missing sign.  The only hint that there’s an opportunity to rent is an obscure sign off to the corner, the type purchased at home improvement stores.  There’s no mention of who manages the property on the sign.

In another corner is a sign for Dalewood Estates and lists many of the names responsible for the development, which is supposed to help house disadvantaged seniors.  Built at a cost of just over $3.9 million, paid by the Department of Housing and Urban Development as part of its 202 program, it was supposed to be subsidized with additional HUD funds.

The property was built with 49 units and a clubhouse, by Dalewood Estates Senior Housing, Inc., a non-profit founded in 2004 for the express purposes of developing and managing the property. The deal was signed with HUD on October 30, 2007.  A stipulation of the deal was that construction would be completed by October 30 of the next year.

Today, the Dalewood Estates property sits nearly vacant.  Signs of habitation are scarce.  Only a handful of people have been seen during The Albany Journal’s investigations of the location, almost all centered around one apartment. Despite the $3.9 million spent to build the property, it was assessed by the Dougherty County Tax Assessor’s office as just $2.3 million.  That’s a variance of $1.6 million that is unaccounted for in official records obtained by The Albany Journal.  What could be the cause of this variance?  No one seems to know.

In addition, Dalewood Estates Senior Housing lost its non-profit status with the Internal Revenue Service on May 15, 2010 for three years of non-compliance of filing requirements according to the website Guidestar, which gathers and publishes information about non-profit organizations. This means that Dalewood Estates Senior Housing was failing to comply with IRS regulations at the same time as they were securing funding via HUD’s 202 program, a program that does require repayment of funds so long as the property is used for disadvantaged senior housing for a period of 40 years. Furthermore, the Dougherty County Tax Assessor’s office granted Dalewood Estates a permanent exemption on October 18, 2010, five months after the IRS revoked their non-profit status.

From its inception, the Dalewood Estates development was to be a tax exempt property, due to the company overseeing it being a non-profit.  This is normal in the State of Georgia and throughout the nation.  However, the Dougherty County Tax Assessor’s office is still listing this property as tax exempt. According to the calculator at tax assessor’s office, that’s a loss of just over $36,000 in tax revenue per year.

Another wrinkle to be found with Dalewood Estates Senior Housing can be found in the requirement that all directors on the board be either members of Trinity Community Development Corporation, or appointed by them.  Trinity Community Development Corporation is listed with the Georgia Secretary of State’s office as being “administratively dissolved”, effective August 28, 2011. As Dalewood Estates Senior Housing’s articles of incorporation are written, no new board members can be brought on board even if Dalewood still enjoyed the IRS non-profit status.

The Secretary of State’s office lists Dalewood as “Active/Noncompliance” meaning that they’re in danger of losing incorporation status in Georgia as well.  State Secretary of State status has no impact on IRS status.

So why do they still have a tax exempt status?  In an email reply to The Albany Journal’s question to that effect, chief appraiser Larry Thomas said it “is currently in the exemption review process for 2011. Their federal tax exempt status was automatically revoked in May 2010 and posted in June 2011by IRS. Georgia’s assessment date is January 1of any year, the property did not qualify for a Georgia property tax exemption as of January 1, 2011. The property is scheduled to be taken to the Board of Tax Assessors on November 22, 2011 for the removal of its Georgia property tax exempt status for 2011. In order to receive this exempt status for 2012 they would have to submit a new application and re-qualify for the 2012 tax year.”

After almost $4 million being spent, the citizens of Albany now have a project that appears for all the world to be completed but still seems to have no residents despite the onslaught of similar projects in town that fill up almost as soon as they are completed.  There is little evidence of management, and with Dalewood Estates Senior Housing’s status in flux, it’s entirely possible that the citizens of Dougherty County will not only not see a dime of tax money paid on this property, but will find their government in control of yet another housing project.

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