It all started with a comment left by Sold Out on The Optics are Terrible:
The Yacht Club was paying over $19K a year in advalorem. She showed them how to go non profit and quit paying local taxes run the non profit thru her and just pay her.
That comment raised two distinct questions in our minds here at Slabbed. The first question is whether or not the Bay Waveland Yacht Club was paying property taxes. The second question would pertain to the local Chamber of Commerce being involved in getting tax exemptions for a social club. I’ll answer the second question first because we need to line through it for the purposes of the rest of this post as we found no evidence the Chamber was involved in the Yacht Club’s local property tax assessments. The Yacht club however, was given a tax abatement by Hancock County Tax Collector Jimmie Ladner and that is plenty interesting on its own.
On October 5, 2015 the Bay Waveland Yacht Club, Inc filed a status report with the Mississippi Secretary of State which indicated it changed its corporate charter:
The period of existence is perpetual Second: The purpose for which it is created are: Mission and Purpose: Associate as a
fraternal and benevolent organization for the common purpose, promotion and pleasure of doing good works related to boating, racing, athletics and related activities Donate use of its facilities, boats and personnel for the advancement of high school sailing, sailing instruction to the children of the community, providing boat storage and launching to the Department of Marine Resources and for search and rescue initiatives, sponsoring annual events open to the community in the celebration of national holidays, hosting civic club functions and fishing rodeos Encourage the owning and use of power and sailing boats for pleasure and a safe harbor for boaters in distress Host international, national and regional regattas in order to exhibit the resources of the Mississippi Gulf Coast to international, national and regional visitors Erect and maintain a building and marina facilities to be used for its good works, charitable endeavors and as a club house for its members Provide periodic donations of use of its facilities and property for the benefit of the community.
That is interesting that it donates its facilities for sailing instruction. The summer program cost $450/child so I am not sure what is exactly being donated to the public but boy that new mission statement sure sounds good. Jimmie Ladner indicated to Slabbed that after the club changed its by laws he gave it the property tax exemption under authority section 27-31-1(d) of the Mississippi Code, which does allow for certain nonprofits to gain a property tax exemption. The problem is the Bay Waveland Yacht Club, per its own 990 forms filed with IRS, is a 501(c)(7) social club. Worse, the 990 forms indicated that no changes were made to its governing documents so there is a fundamental contradiction between the story BWYC is telling the local tax collector and the one it is telling the IRS.
Lana Noonan, on behalf of Slabbed New Media contacted the Ad Valorem Property Tax Division of the Mississippi Department of Revenue. She spoke with a Ms. MacDonald who told her that social clubs, such as member only Yacht Clubs, do not qualify for an ad valorem exemption in Mississippi. She further indicated that tax abatements such as the one given the Yacht Club are required to be reported to MDOR and there was no such report on file in Jackson for the Bay Waveland Yacht Club. (See Update below)
From outward appearances, corners have been cut and the politically connected yacht club, whose members include luminaries such as James Carville, has been given a nice taxpayer funded handout in the dark of night. This handout is special because every other property owner in Hancock County is paying for it each year to make up for the back door leakage. It should be lost on no one that the Bay City Council is currently considering going up 4 mills on its taxes with Bay Waveland Schools going up 2 mills. The local yacht club, whose membership includes some of the most financially successful members of the community gets a freebie pass on all of that.
Slabbed contacted Bay Waveland School Board Trustee Mike Bell for comment on the Yacht Club’s tax exemption. He indicated to Slabbed that he was speaking only for himself and not the entire Board of Trustees but that he would be bringing this matter to the School Board’s attention. “We make our ad valorem request in dollars. The payment is then assessed to the tax payers. [The Yacht Club Exemption] does not affect the Bay Waveland Schools annual request for local support.” He added, “It is not fair to the average Joe”, alluding to the fact that everyone else that pays property taxes has to make up the difference for the Yacht Club exemption.
Slabbed also contacted Bay St Louis Councilman at Large Gary Knoblock for comment. He responded that he was unaware of the Yacht Club’s property tax exemption adding that, “he was not looking to raise [the City’s] property taxes”. He indicated the Bay Council would be taking a look at the issue.
Slabbed has also contacted Mayor Mike Favre, Bay Waveland School Board President Casey Favre and Hancock County Board of Supervisor President Blaine Lafontaine for comment but we have not heard back before initial publication of this post. As we get additional reaction we will update this post.
Slabbed has been contacted by the Department of Revenue in response to communications from Jimmie Ladner’s office. Jeff Foreman of MDOR indicated this this type of tax exemption does not require MDOR approval:
As I understand from ……. below, the Bay Waveland Yacht Club is claiming exemption as a “perpetual or fraternal and benevolent organization”. As you have already established in this thread, such an exemption is clearly authorized under Miss. Code Ann. Section 27-31-1(d). Under current Mississippi law, case law and guidance from the Mississippi Attorney General, the duty to determine eligibility for such an exemption lies solely with the county. The Department of Revenue plays no role in the approval of such exemptions and, as such, there is no requirement for any information regarding such exemptions to be filed with the Department.