Barrington resident spars with RI Supreme Court over tax break

Gary Morse says court 'played it loose and free' with affordable housing lawsuit's decision

Posted 7/12/19

The state's Supreme Court has ruled against Gary Morse's complaint.

For more than five years, the Westwood Lane resident has argued that the town should not be offering the developers of low- to …

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Barrington resident spars with RI Supreme Court over tax break

Gary Morse says court 'played it loose and free' with affordable housing lawsuit's decision


The state's Supreme Court has ruled against Gary Morse's complaint.

For more than five years, the Westwood Lane resident has argued that the town should not be offering the developers of low- to moderate-income housing projects a tax subsidy. He said Barrington should be collecting the full taxes on these properties, instead of just 8 percent of their gross rental income.

But last month, in a decision written by Justice Indeglia, the Rhode Island Supreme Court dismissed Mr. Morse's complaint on the basis that he did not have standing to file it. 

"In this case, Morse has not shown that he has a 'personal stake beyond that shared by all other members of the public at large or the taxpayers of the town,'" stated the decision.

When asked how he felt about the ruling, Mr. Morse offered this reaction: "The first thing was confusion…confusion because in order for them to have reached intellectually the decision that they made, they would have to abandon the Rhode Island Constitution, the Rhode Island statutes, and all of the precedents that came before. It was a total abandonment and it was almost as if they woke up and they said 'Let's get this Morse complaint off our desk.' … It was confusing."

Mr. Morse said the Supreme Court also failed to address some of the points made in his complaint.

"They didn't dispute that it might have been illegal," said Mr. Morse, of the tax subsidy offered by Barrington. "They didn't challenge the legality. They left that open. They didn't challenge that it might have cost me more money, a higher tax bill, to subsidize Sweetbriar. 

"What they said was that taxes at this level are collective in nature and not individual. So when the tax assessor takes more money from you, it's not really your money. It's the collective money of the town. I'm sure if you asked anyone who had a higher tax bill because of an illegality by the town, they would say 'Wait a minute, you just stole my money.'"

Mr. Morse said there is plenty of precedence on this issue, and referred to a case that reached the U.S. Supreme Court (Lujan vs. Defenders of Wildlife) … "the court is very clear — if it's my money that they took, then it is a financial harm to me."

Mr. Morse has argued that the town should not be extending a tax break to the developers of affordable housing projects, such as the East Bay Community Development Corporation, which constructed Sweetbriar and is in the process of building the Palmer Pointe development on Sowams Road. He said the tax break to the developers results in a greater tax burden placed on all other residents.

"Here's the bottom line to this — the benefit of this does not go to the renters, it goes to the property owners," said Mr. Morse. "… these properties can be sold and are being flipped on a regular basis. … It can be sold after 15 years and keep all of the tax breaks. All the federal tax breaks that were provided to Sweetbriar are in their pockets after the 15-year mark. And there are a lot of companies now that are buying these properties and one of them is Pride Rock Capital Properties. They're buying them because they know all they have to do is ride out the deed restriction ..."

Mr. Morse said that when the Barrington government extends a tax break to an affordable housing development, other taxpayers face an increased burden. Mr. Morse argued in his complaint that his own personal injury — or increased tax bill — was particular to him. 

"A court said, no it's not your property," he said. "They said in the ruling, if you go through it, they said my injury, my $14.11 that I said my tax bill was raised, was not an injury particular to me."

Mr. Morse countered: "It is an actual injury. The court has said repeatedly, it doesn't matter how big the injury is — it can be a penny, it can be $1,000...

"It matters only because if the benefit for this was going to benefit the people (the renters), I wouldn't have such a complaint. We all have to serve the better good of the community we live in. But what's happening is that we're actually just making developers richer, at the expense of many taxpayers. And that's just not right."

Standing on principle

Gary Morse understands full-well that he did not need to pursue this complaint.

The longtime Barrington resident retired from his full-time profession about 15 years ago and has spent a lot of his retirement time researching the subject of affordable housing developments in Barrington.

He said he could be doing other things during his retirement, but feels that this is an important issue.

"I try to look at it pragmatically," he said. "You look at our history, the history of society and there are always some people who give everything in order to stand on principle. It's a matter of principle that I felt was important. That's why I did it. I didn't do it for $14.11."

Mr. Morse said the town should not be extending the tax deal to developers, and believes he has the paperwork to back it up.

"Here, it all started with this," said Mr. Morse, pointing to a document filed in the town land records in 2004. "This is a document that was filed with Sweetbriar by the town when they rejected it (the development plan) … Read the highlighted portion. It says, the tax break is illegal…"

The document, filed in book 0851 on page 0194 in the town's land records, states, in part, "that the 8 percent reduced rate of property tax applies only to revenue generated from rehabilitated buildings and not to new construction. 49 of the proposed affordable housing units are new construction. Therefore, the applicant did not prove that the statute applied to the Project."

That document was part of the town's legal battle against the Sweetbriar project, which featured almost entirely new construction. But eventually the court ruled against Barrington, clearing the way for the development to be built on a parcel of land on Washington Road.

"Then in 2008, after Barrington lost the lawsuit in Supreme Court on the Sweetbriar project, you had several council members, and without naming names you can figure out who they were in 2008, who said, 'We've got to give Sweetbriar this tax break,'" said Mr. Morse.

Not only did local officials offer the tax subsidy to EBCDC for Sweetbriar, said Mr. Morse, they have also extended it for Palmer Pointe, another project featuring almost all new construction.

"Here's the dilemma … It's a letter that (Barrington Tax Assessor Michael) Minardi recently wrote to RI Housing. In it, he says to Rhode Island Housing, we will now recognize that (8 percent rental income…) is applicable to any new construction in Barrington. Not just Sweetbriar, but Palmer Pointe and any project that comes thereafter. That letter was filed in 2018," said Mr. Morse. 

Affordable vs. for-profit

Mr. Morse has long challenged the management of affordable housing in Barrington. 

In an interview in 2013, Mr. Morse said he was concerned about the tax break extended to the Sweetbriar developer. He said there was no legislation requiring the abatement, adding that the tax break places an additional burden on the town's other taxpayers. 

"Residents should understand that Sweetbriar is owned by a for-profit company. Our locally-provided tax subsidy is approximately 65 percent of Sweetbriar's tax bill, and that savings goes directly into their 'for-profit' pockets," wrote Mr. Morse in an email.

In a 2013 article in the Times, then-council president June Speakman agreed that the town was not "required" to give an abatement to new developments, but challenged the idea of canceling the tax break to Sweetbriar. 

Ms. Speakman and the Sweetbriar developer, East Bay Community Development Corporation, have both referenced an opinion from the Rhode Island Housing Authority which stated that the law governing tax breaks for affordable housing also applied to newly-constructed buildings in addition to pre-existing structures.

Mr. Minardi, who was specifically named in Mr. Morse's complaint, said he has followed Rhode Island General Laws while issuing the tax bills for Sweetbriar.

"Barrington Cove Apartments also receives the same taxing scheme per Rhode Island General Laws," Mr. Minardi wrote, adding "Palmer Pointe, so long as they comply to the Rhode Island General Laws will also receive the same taxing scheme."

Mr. Morse said it is unfortunate that the Supreme Court failed to address the differing opinions.

"In their ruling, the court skipped the question of the legality of the Sweetbriar tax break, so that's still up in the air," he said.

"The fact is that in 2004, the town itself documented that this tax break for Sweetbriar was illegal without resident approval in the financial town meeting. But in 2008, the town council did an end-run around the voters and approved it themselves. When later confronted with this, the town refused to take any action to submit a simple inquiry to the Superior Court to confirm the legality of this matter."

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