The Greenwood City Council approved implementing a tax break given in 2019 for a distribution company, which did not begin to due to a failure to file a form.
Council members voted 6-2 Wednesday night to waive the noncompliance of CPF Greenwood Associates LLC for its failure to timely file its application for deduction from the assessed valuation of structures in an economic revitalization area, implementing their 10-year, approximately $10.6-million tax abatement for real property. The two council members to vote against were David Hopper and Michael Williams.
In 2019, there was a $20 million project at 1379 Collins Road, located inside a large industrial park, Caroline Hines, a representative of CPF, told the council on April 1. CPF was not the entity that asked for the real property abatement, which was GLA Properties. At the time of GLA’s application, the company asked for both real property and personal property tax abatements, which were approved by the city council in October 2019, according to city documents.
CPF purchased the land from GLA Properties in September 2020 and leased it to Quality Custom Distribution Services Inc. in 2021. CPF also made about $10.6 million in improvements to the property in 2021, with an assessed value of $7.8 million, city documents show.
However, the state form for real estate deductions required to be filed to receive the benefits, referred to as a CF-1, was not filed in 2021. Now CPF’s tenant wants to receive its real property tax break, with 2024 considered the first year of the tax break. They also filed the form last year to get benefits for 2024, city documents say.
Although the real property form wasn’t filed during that time period, the CF-1s for the five-year, $8 million personal property tax break was. Filing the real property form got lost during the transfer of ownership of the real estate property, company representatives said last month.
The company has also met the investment and job numbers they said they would on the application, the representative said.
During Wednesday’s city council meeting, council member David Hopper made a motion to have the first two years of the abatement effectively zeroed out by having QCD pay 100% of their 2024 taxes and 5% of their 2025 taxes, instead of receiving a 100% and 95% deduction for each respective year. Hopper previously questioned the need to have the abatement go into effect now, when — to him — it seemed as though the company hadn’t needed it for two years, he said.
Hopper reiterated this again Wednesday, adding that companies not only get a notice from the city reminding them to fill out the form, the county also gives a notice. He understood there was a change of ownership, but if they needed a remedy, it shouldn’t be through the city, he said.
Caroline Miner, who was representing QCD, questioned the need to remove the tax break benefits for the first two years. QCD is the building’s tenant, paying their taxes to their landlord, who believed they were compliant. Because of this, QCD didn’t immediately know they weren’t getting the benefits, she said.
“They just pay their tax directly to their landlord until they had time to realize that their taxes weren’t correct,” Miner said. “The landlord doesn’t really have a motivation to solve the problem on their tenant’s behalf. But it’s QCD, who initiated the project, is employing the folks there in town, and is going to ultimately benefit from this resolution.”
QCD does want the benefits from the tax break and is trying to fix the issue “even though it’s their landlord’s issue to solve,” Miner said. She asked the council to not make the amendment and implement the resolution as is.
However, Hopper still questioned how the company couldn’t have figured out something was off sooner. Miner compared the situation to renting an apartment. A renter makes their lease payments and wouldn’t know their landlord hasn’t managed the taxes correctly until after they’re already paid, she said.
The company’s recourse should then be with the landlord, Hopper responded. Miner said it would be after the resolution was dealt with, but at this time, QCD was interested in getting the issue rectified.
Hopper’s motion ultimately failed on a vote of 3-6, with council members Erin Betron, Mike Campbell, Linda Gibson, Dave Lekse, Teri Manship and Steve Moan voting against.
