Leader Blues

Wednesday, February 28, 2007

TOP STORY >>Tax break for base housing

By JOHN HOFHEIMER
Leader staff writer

Pulaski County Judge Buddy Villines ruled earlier this month that 1,200 homes owned, managed and being built by American Eagle Communities—a private company–on Little Rock Air Force Base are exempt from property taxes.

Pulaski County Assessor Janet Troutman Ward is appealing Villines’ decision, saying the houses previously were exempt because the federal government owned them, but not now. Ward, who has held since the base privatized its housing in 2004 that as private property it was subject to property tax, said she prayed on the matter for a couple of weeks before deciding to appeal.

County Attorney Karla Burnett, acting on Ward’s direction, said she would file the appeal with the Pulaski County Circuit Clerk by the Monday deadline. Villines said Tuesday that he could not comment on the matter because it was in litigation.
His order found that “the federal government has determined that quality on-base housing for its personnel is essential to military preparedness in defense of the United States,” and that the Military Housing Privatization Initiative does not cede authority to state and local jurisdiction.

“The state statute says the homes are exempt as long as they are owned by government. These are not owned by the government,” Burnett said. To the argument that the county doesn’t provide services to the base, Burnett said that would be true if the residents never left the base, but “they drive on my roads and subject to my sheriff,” she said.

Little Rock Air Force Base privatized its family housing, turning the existing homes over to American Eagle Communities in August 2004. The company and the base entered into a $500 million agreement that called for the demolition and then construction of 468 homes and remodeling of another 732 homes.

Project director Tom Brockway said the construction is on schedule to be done by 2010. American Eagle, in addition to owning the homes, has a 50-year management agreement.

Ward ruled at the time that because the homes were now privately owned, they would be taxed with the revenues going mostly to the Pulaski County Special School District and county general funds. So far, American Eagle has completed three homes and is finishing up six more, with another 123 new homes in progress, Brockway said Tuesday.

Eagle Communities completed a $1.2 million town hall, complete with three meeting rooms, an exercise room, a cyber café, a media room, leasing offices, outdoor basketball and volleyball courts, a junior Olympic swimming pool, a playground and a sprayground, where youngsters can play in the mist during the summer.

The new homes are modern, brick, neo-Georgian, subdivision type houses that could raise a noticeable amount of ad valorem taxes—if taxed.

Ward said at the time that American Eagle knew when it bid on the contract that the properties would be subject to real estate taxes.

She said it is a for-profit enterprise, subject to the 40.7-mil county real estate taxes like any other developer or landlord.
The school district received $483,000 in federal compensation at the time of the purchase.

It is not immediately clear if the government would continue that compensation if the homes are not put on the tax rolls.