By Eric Curl
April 14, 2024 -That building you now see whenever you cross the Talmadge Bridge. (It’s hard to miss.) In addition to serving as the city’s tallest billboard, the 17-story student housing complex will soon be exempt from big government.
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SCAD’s application for a tax exemption application for the newly constructed building is going before the Chatham County Assessors Office on Thursday. Staff is recommending approval of the exemption, which is applied to all of SCAD’s educational buildings. An exemption for the university’s new classroom building in the former Ghost Coast Distillery building across from the student housing complex is also going before the board, with a recommendation for approval. (Update: The exemptions were approved on April 18.)
Together, SCAD paid about $39,000 in taxes to the city last year for the properties.
The board is recommending denial of a third application from SCAD at the same meeting. The university submitted a exemption application in March for a building it acquired at 102 E. Lathrop, but the board is recommending denial because the university was not the owner of record January of 2023. The building serves as the local headquarters of Sunstates Security, which provides security for the university. The nonprofit university acquired the building, where the university also operates a frame shop, for $6.5 million in January and did not respond to request for comment regarding plans for the building. (Update: The exemption was denied).
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Prior to the Lathrop purchase, the nonprofit university owned 98 parcels as of Oct. 24, 2023, according to a city report. The report found that the university paid more than $1 million in taxes to all tax authorities for the properties from 2018 through 2023.
The savings the university is set to receive from the new exemptions is miniscule compared to the nonprofit university’s yearly income. SCAD’s net worth increased by almost $107 million to more than $1.3 billion during the fiscal year that ended June 30, 2022, according to the nonprofit’s most recent IRS 990 form, as previously reported. SCAD renovated the Ghost Coast building for classroom use after acquiring it for $5 million last year, as previously reported. The student housing complex was built in 2022-2023 after SCAD purchased the site for $4 million in 2018.
In addition, a consulting firm recently found that the university’s economic impact on the Savannah area in fiscal year 2023 was $1 billion, representing the direct impact of spending in Savannah ($255.1 million) and indirect spending because of SCAD’s presence ($744.9 million), according to a recent press release.
The board of assessors does monitor whether the university is using its buildings, as advertised. Last year the assessors board removed SCAD’s property tax exemption for one of its buildings after the university stopped holding classes in what was the “Clarence Thomas Center for Historic Preservation,” as previously reported. That removal came after the board voted in 2021 to remove a tax exemption SCAD obtained for the historic St. Paul’s Academy building, after failing to move forward with the building’s rehabilitation. SCAD ended up selling the St. Paul’s building that same month to a developer who has since converted the former school building into an apartment complex.
The university also pays property taxes for a vacant lot at 224 West Boundary St. in 2023 because the site has remained vacant since SCAD demolished the former Howard Johnson’s motor lodge at the site in late 2019 after purchasing the site for $7 million in 2014.
Last year, SCAD obtained tax exemptions on two buildings, saving the university about $86,000 after the assessors board approved exemptions for the former Chatham Apartments building at 609 Abercorn St. and a newly constructed parking garage at 645 Indian St, as previously reported.
Tax exemptions do not always go well. Even Ghost Coast is an example of that. The liquor distillery opened in 2017 with the assistance of the Savannah Economic Development Authority, which provided a 5-year property tax abatement that ended in 2021, as previously reported. The business shut down less than a year after losing that exemption before SCAD bought it.
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Economic impact is not always a good measure of whether or not a property should pay property taxes or be exempt. SCAD’s new dorm required the purchase of a new fire truck by the city to be able to reach the height of the building. In addition, bringing 14,000+ students into the community means the police and fire departments and EMS services has to equip and staff for those additional 14,000 students as SCAD does not provide those services for their students privately. Yes SCAD has security officers but they are not armed law enforcement, so the city Police Department has to meet that additional need for which SCAD pays no taxes. It’s time the city implemented a PILOT agreement with SCAD to pay for all the municipal services they require but which all the other property tax payers in this city have to pay for.