The Property Tax Assessment Board of Appeals (PTABOA) voted 2-1 Monday to
seek back taxes from an improper tax exemption benefiting the owner of
downtown Valparaiso office space that houses the Prosecutor’s Child Support
15 N. Franklin, Valparaiso, the property in question, was owned by Courtney
Morgan LLC when the County first entered a lease in 1999 to house the
Prosecutor’s Child Support Division there. Courtney Morgan LLC’s registered
business agent with the Indiana Secretary of State is Valparaiso businessman
and Treasurer of the Indiana Republican Party Chuck Williams.
Courtney Morgan LLC sold the building to 15 Franklin LLC, whose registered
business agent is Valparaiso Attorney William Ferngren, shortly after a
contentious 10-year lease extension was secured at a 2014 Commissioner’s
meeting where it wasn’t on the agenda.
Sharon Allen, an employee of Chuck Williams, is said to be managing the
Chuck Williams secured a tax exemption for the property in 2008, which has
saved 15 Franklin LLC nearly a year’s worth of the rent it charges to the
Child Support division in tax breaks, according to County Auditor Vicki
Porter County Assessor Jon Snyder told the Chesterton Tribune that
the exemption awarded to the company in 2008 was refiled for and approved in
2016 once the County became aware of the change of ownership, per 2010
legislation requiring exempt entities to report changes of circumstance and
refile for exemption.
Earlier this year the discovery of the lease extension put a hitch in the
Commissioner’s plans to move Child Support to the old jail acquired in April
for $3.6 million as part of their capital improvements plan.
During study of the issues raised by that discovery, Board Attorney Bob
Schwerd concluded that 15 Franklin LLC was actually required to refile for
their exemption every year.
The Board was prepared to consider a new application for exemption at a
hearing Monday morning when Snyder reported that the company has declined to
The withdrawal of the application was stated in a letter signed by Allen
that was hand-delivered to the Assessor’s office by Ferngren.
The move comes after the Commissioners retained an independent law firm--LaPorte-based
Newby, Lewis, Kaminski & Jones-- to give an opinion on the validity of the
lease, which concluded that the original 1999 lease, and all subsequent
renewals and extensions, are void based on a 1993 ruling by the Indiana
Court of Appeals.
Schwerd said the Board should next decide if it was interested in pursuing
the recapture of tax dollars 15 Franklin LLC should have paid in the last
few years, considering that the exemption was awarded on an invalid lease.
Board President Nick Sommer, for his part, said the current Board shouldn’t
reverse the past Board’s decision to award the exemption. “It was basically
an interpretation of the way the statute was written at the time, so to
penalize somebody after we’ve granted something, I just don’t really see the
logic there,” he said.
Board member Scott Williams, however, said he was interested in knowing if
there’s legal precedent for recapture.
Board member Nancy Kolasa noted that there have been cases in the past where
the Board granted exemptions only to later find out new information that
disqualified the property from exemption and lost tax dollars were
Kolasa said the same should happen in the case of 15 Franklin. “I think we
should try to recoup as much for the taxpayers as we can,” she said. “It’s
just the right thing to do.”
Snyder brought up another legal entry point for seeking the return of funds.
“At the very least, we should utilize our independent assessor’s
measurements,” he said, referencing an independent assessor’s findings in
August that the office space used by Child Support is only 2,758 square feet
when it is said to be 3,200 on the lease agreement and 3,972 on the
application for tax exemption.
Snyder went on to say that if the Board seeks to recapture funds, it should
at least seek the difference in what was paid and what would have been paid
had the exemption been awarded based on accurate measurements of the space.
“We were just given bad information, and I think you guys ruled on that bad
information,” Snyder said.
Kolasa renewed her statement that she was in favor of capturing all money
owed, and offered the example that the Board has sought back taxes after
awarding an exemption it shouldn’t have due to issues such as paper work
Sommer replied that the difference for him is correcting paperwork is a
procedural issue whereas the Board made an interpretive decision based on
statute when it granted 15 Franklin LLC’s exemption.
Scott Williams said “I don’t look at it as a penalty. If the county is
entitled to some of those taxes, we should pursue that.”
Williams said he would support any recapture of tax dollars, “whether it be
to the extent that the percentage was off and the figures given were not
accurate, or we go back and look at the years they were exempt and recoup
100 percent of those taxes.”
Sommer said he was only in favor of pursuing taxes lost to the square
With Sommer dissenting, Kolasa and Williams voted to seek the return of
exempt taxes to the fullest extent the law allows. State statute allows them
to seek the last three years’ worth of taxes owed.
“I want full recovery as far back as we can go. There were just too many
errors made,” Kolasa said.