The groundbreaking for Blue Mountain Community College’s Farm II project is on hold.
Turning the first earth on BMCC’s Facility for Agricultural Resource Management II was to take place Monday, Sept. 18, along Southwest 18th Street in Pendleton near the city’s convention center. But college President Mark Browning said a last-minute revelation about the taxability of the construction site has pushed off the start.
“We’re building the facility on three parcels of land and the (Pendleton Round-Up Foundation) owns all three,” he said. “Those parcels are owned by a nonprofit, but they’re still considered private, so they’re taxed.”
Browning said as the college was doing its final checks and due diligence on the leases, staff discovered a clause that said if there would be any taxation of the FARM II facility, the college would be responsible for paying that bill.
“We assumed that this wouldn’t be taxed because we’re an educational institution, but the county assessor informed us that the ground would still be taxed,” Browning said. “Then they told us that because we’re also putting a building on top of privately held ground that will be subject to taxation as well. We called timeout and postponed the groundbreaking.”
Browning said he immediately launched into a campaign to discover how such a clause could have been missed, and where it might have originated from.
“I called the city, I called everyone who’d been involved since I got here and they’d never heard that FARM II would be taxed,” Browning said. “Most people just asked, if it’s a public building, how could it be taxed?”
The cost of taxation on BMCC for maintaining FARM II would be immense, Browning said, with estimates based on the standard would work out to more than $242,000 a year.
“We’ve made so many concessions already with FARM II in terms of scaling the project, what should have been a $20 million project became a $13 million project. Where could we get the other $7 million?” Browning said. “We can’t recommend this lease to our board.”
Unfortunately, Browning said, numerous contractors already purchased materials and scheduled time to begin construction.
“This thing has already been in motion for so long, bonds have been sold, we can’t just stop it now, we have to find another solution, and we’ll be diving into that next week after Round-Up,” Browning said.
Although BMCC has yet to decide on next steps, Browning said the college is examining two potential options to obtain tax exemptions on the land, but neither option would prove future-proof and could be subject to change as decision-makers at the county level change.
“As far as I understand it we have two options for exemptions,” Browning said. “One is a three to five year exemption that is completely under the auspices of the Umatilla County assessor. The assessor’s issue is that while it’s our building, we won’t be the primary users because it’ll probably be the city and Round-Up in terms of the number of events and hours of use. We’ll probably be the third most frequent user, using it for our rodeo team practice. At that point, it doesn’t really qualify for tax exemption.”
The assessor could grant the exemption, Browning said, but if anytime during the next three to five years the assessor believes the exemption is being taken advantage of, the county can withdraw the exemption immediately.
“The other option is a 15-year exemption, which is granted by the county commissioners,” Browning said. “That’s a longer process, but in the life of the building, best case scenario, you’d have to get this exemption several times, and you can’t obligate a future commission to this nightmare.”
BMCC is working on documentation to the county assessor and county commissioners to try to obtain an exemption, Browning said, but added the immediate future of the project was unclear.
“We’re waiting for BMCC to send us a proposal about the intended use of FARM II,” Umatilla County Commissioner John Shafer said.
The East Oregonian contacted the Umatilla County Assessor’s Office for comment on this story but did not receive a response.