Building Purchase Sparks Property Tax Discussion

The BOT decided at its Thursday meeting to move forward with the purchase of the office building, which is located at 208 W. Franklin St.

Officials could not give specific details when contacted Sunday, but The (Raleigh) News & Observer reported Saturday the 21,000 square-foot building will be purchased for $3.6 million. The building will be used for office space once UNC's purchase is finalized in January.

The building is presently owned by Development Animals, a limited liability corporation.

Chapel Hill Mayor Rosemary Waldorf said University ownership of the building would mean a combined loss of $33,000 to $34,000 each year for Orange County, Chapel Hill and Chapel Hill-Carrboro City Schools.

According to state law, UNC is exempt from paying property taxes.

"It really adds up," Waldorf said. "If you look at a map of the property that the University owns ... (UNC) is an enormously significant property holder, and we have to get our tax base from what remains."

Waldorf said the Chapel Hill Town Council has been working with the BOT and Chancellor James Moeser to begin developing a tentative schedule of getting property owned by the University back into the hands of private owners.

Such a schedule would create a specific time frame for the University to find alternatives to using office space in Chapel Hill business districts.

Moeser has been supportive of the plan to develop the schedule, but the BOT has not committed to pulling the University out of downtown properties, Waldorf said.

She said that since the 1980s, the University has purchased major properties on Airport Road and in the Timberlyne shopping center, effectively increasing the property tax for the rest of the town.

But in recent years the BOT has been receptive to the Town Council's concerns about the tax base, said council member and Mayor-elect Kevin Foy.

"We've been working (with the BOT and Moeser) to get buildings back on the tax rolls," Foy said. "This is a move backward, and it's quite surprising."

Foy said he suggests the University adhere to the established plan to meet requirements for growth.

Waldorf suggested the University rent the property instead of purchasing it.

Town Council member Jim Ward said he hopes the BOT was acting out of necessity when deciding to purchase the downtown building.

"I hope it's not a trend," he said. "This is an instance, I assume, that the space needs have overwhelmed their intent."

The City Editor can be reached

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