Is Our Lady of Fatima still a school? That question lies at the heart of a financial disagreement between the Town of Warren and the Sisters of Saint Dorothy, the religious order which owns the sprawling 360 Market St. property.

In July, the town sent the Sisters a tax bill of $102,104.36, based on the property's assessed value of $5.47 million. As a school run by a religious order, the property had been tax exempt for decades. But after it closed following the 2011-12 school year, Warren Tax Assessor Cathy Maisano looked at state law and determined that the property, with 44 acres of land and a 73,000-square-foot building, no longer qualified for that exemption.

"Our Lady of Fatima no longer qualified … and (Warren Town Solicitor Anthony) DeSisto agreed with that interpretation," she said Thursday.

Sisters officials feel differently.

John J. Garrahy, a Providence attorney who represents the religious order, said his interpretation is that although the school is not currently being used, it is still a school and as such deserves exempt status.

"It's not presently operated, but they (the Sisters) haven't abandoned that use as a high school. It's just unfortunate that due to their financial situation they were forced to close the school."

Ms. Maisano sent the Sisters a courtesy letter in January informing officials of the property's change in status, before sending out the bill in July. Last week, after Mr. Garrahy requested clarification on the change, the Warren Town Council referred the matter to Mr. DeSisto. Meanwhile, Mr. Garrahy said the Sisters are considering their next step.

One option is to appeal the assessed value of the property with the Town of Warren. That won't address the tax exempt/non-exempt status, Mr. Garrahy said, but is a start.

Another course of action is to seek a declaratory judgement from Rhode Island Superior Court, asking a judge to determine whether the property should retain its tax exempt status.

"We're still considering what to do," Mr. Garrahy said.

The property lies in a residential (R-20) zone and includes one of the largest stretches of privately held undeveloped land in Warren. It has been on the market since last year with an asking price of $8.1 million.