The city stands to gain about $10,000 in annual taxes as a result of scrutiny of the tax-exempt status of rental properties owned by the New London Homeless Hospitality Center.
Homeless Hospitality Center Executive Director Cathy Zall said she now realizes that since two of the center’s five multi-family rental properties were subsidized by state or federal funds, they are by state statute not eligible for tax-exempt status.
She said the center has decided to drop plans to apply for tax-exempt status for a recently purchased home at 195 Williams St. and will be placing a home at 73 Broad St. back on the tax rolls by the end of the month.
Both properties are aimed at housing low-income tenants or the homeless, part of the overall mission of the homeless center to find or create permanent homes for the homeless.
Zall said the center had obtained a $300,000 grant for the Williams Street home through the federal Low Income Housing Tax Credit program of the Connecticut Housing Authority.
The four-family Broad street home was purchased and renovated in a similar method.
Zall said providing a mix of housing for all income levels in the city is an important issue and one the center has tried to address.
The center will pay $6,168 in annual taxes at the 73 Broad St. property based on an assessment of $152,460, according to the tax assessor’s office.
The annual tax bill for 195 Williams St. is $3,996, based on a $98,770 assessment.
Zall said the center will not have an issue paying the taxes on the two properties.
Looking ahead at a possible rise in the assessed value of the Williams Street property once renovations are completed, Zall said there is a provision in state statute that allows the assessor to base the tax rate on the income of the property, rather than the assessed value.