To pay or not to pay property taxes? A difficult question for Nuçi’s Space to answer these past few years, but a recent state Court of Appeals ruling, the latest in a three-year-long legal battle, may have settled the matter for the non-profit: time to pony up. But Bob Sleppy, the non-profit’s executive director, says the fight isn’t over just yet.

Nuçi’s Space plans on appealing the case to the state Supreme Court, but they’re not guaranteed a hearing. “We think there’s some important issues that weren’t addressed, and the case would benefit from further review,” Sleppy says. “It’s not about Nuçi’s Space anymore. This ruling puts other organizations in jeopardy as well. I hope the Supreme Court sees that.”

The appellate court ruled that by renting out rehearsal space, operating a café and hosting private parties for a fee, the non-profit generates income that does not exclusively further its charitable mission as a mental health resource center for local musicians. The court doesn’t dispute the value of Nuçi’s to its community, but held that just because “the institution serves a benevolent purpose” doesn’t mean it’s tax exempt.

Sleppy says the building itself is vital to the mission. Nuçi’s is a gathering place, a community center that provides a vital, supportive safe place for clients who are between doctor visits or adjusting to new medications, Sleppy says.

The whole legal affair started back in 2006 with a state constitutional amendment extending property tax exemptions to “purely public charities” that use their buildings as income generators, as long as that money is used for the operation of the institution. Nuçi’s applied to the county Board of Assessors for an exemption and was subsequently denied; the Board of Equalization overruled the assessors and gave Nuçi’s the exemption. The Board of Assessors then appealed to the county Superior Court in 2008, but the court ruled in favor of the non-profit. The assessors then took their case to the Court of Appeals.

Nuçi’s Space pays property taxes on two parcels of land: around $5,000 a year on the building itself, and roughly $1,000 a year on an exterior lot. They’ve paid over $40,000 in taxes since the space opened, and only in the last two years have they not paid the $5,000 on the main building.

“To some people that might not sound like a lot,” Sleppy says, but for an organization that relies on small private contributions, it’s a good bit. Five thousand dollars pays for quite a few counseling appointments, and losing that money would have a significant impact on the organization, Sleppy says.

Nuçi’s is funded by private donations, a few small grants from family foundations and some project-oriented support for its summer programs. The rest, around 30 percent, comes from earned income generated by the café, rehearsal space and performances.

If the Supreme Court refuses a hearing, Sleppy says he hopes the tax assessor’s office will be “willing to sit down and work with us,” even though past attempts have proved unsuccessful. Nuçi’s will be billed for back taxes if the appeal doesn’t come through, says George Hanson, Jr., the county’s chief tax appraiser.

State Representative Doug McKillip says he didn’t think the Court of Appeals was disregarding the original intent of the law, merely interpreting it their way. Nevertheless, the law could use some clarification, and he’s up for sponsoring new legislation to help remedy the matter. He’s asking community and government stakeholders to write up suggestions about how the law needs to be clarified. There’s time before the next legislative session, so he’s open to all ideas and wants as many opinions as possible. So far, he’s heard concerns about preventing abuse of the law by non-profits, keeping certain buildings on the tax rolls while making sure the exemption stays in place for those who truly need it. Nuçi’s Space is a great organization, and “we need to reward the people who are doing things the right way,” McKillip says.

Commissioner Kelly Girtz doesn’t “believe the slippery slope exists that some other county officials see as a possibility, with the potential of non-profits buying existing businesses, and taking those parcels off of the tax rolls, or with existing businesses converting to a non-profit model of operation.” But in order to address these “distant” possibilities, the General Assembly should “consider language limiting the tax exemption.”

Adds Girtz: “I’m glad the discussion is underway.”

Andre Gallant

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A Musician’s Perspective

Flagpole asked local musician Patterson Hood, a member of the Nuçi Phillips Memorial Foundation Board of Directors, for a comment on the Nuçi’s Space property tax situation. He sent us this:

First off, I think people don’t understand or are confused about what Nuci’s Space does and is about. Their mission is first and foremost to help musicians with depression and to prevent suicide, which is a rampant problem in our society and our community. What they do goes well beyond that, as they help musicians with health care (most of our local music scene is uninsured) and provide other resources to that part of our community.

Nuçi’s Space is a non-profit in the purest sense of the word. The money they bring in from fund-raising and from rehearsal space rental all goes towards the greater goal. Many of its functions are self-maintaining, which enables such a large percentage of the monies raised to actually go towards helping people.

The rehearsal space rental serves two very important functions. The most important (and in my opinion brilliant) function is that it enables artists to get acquainted with Nuçi’s Space as a place to go for their artistic needs; in doing so they become aware of their greater mission and become comfortable with the staff. That way, when a problem arises—and believe me, a HUGE percentage of artists have problems with depression—they are already comfortable there and it’s not so hard to take that next step towards reaching out for help.

Many people (from all walks of life) don’t reach out for help with emotional problems because of the stigmas involved, and many simply because they just don’t know what steps to take to get help. Musicians and artists in general are especially hesitant to reach out for help because the very nature of what artists do often stems from a lack of certain tangible skills, and as I said before, most musicians (local and otherwise) lack decent medical insurance coverage.

Combining all of these elements into one physical space helps to overcome this very big obstacle. I have seen this work first hand, including within my own band, my family and myself. The money that comes from having the rehearsal spaces helps maintain the physical space, which enables a greater percentage of monies raised from donations and fundraisers to go to the greater mission. The money and time being spent on all of this is directly taking away from the quantity of people they can help.

Nuçi’s Space spends nearly $100,000 annually helping people in our community get help. If Nuçi’s wasn’t helping these people, they would be going to emergency rooms and seeking help from the local and state level, which would be causing a further burden on our community’s already stressed financial situation. And, of course, some wouldn’t seek or get help at all, which means lives would be lost. Believe me, I know people personally whose lives have been saved by Nuçi’s Space and what they provide.

Nuçi’s Space paid over $40,000 in property taxes before being granted an exemption a few years ago. It is one of the most amazing and unique programs anywhere in the world. Part of why it’s hard for some folks to understand is because there is literally nothing else like it in the world. We in Athens are blessed to have it right here helping our community and should recognize what a treasure we have in it.

Thank you for your time and interest.

Patterson Hood

Drive-By Truckers