Business

Fresno State company fights tax

A Fresno State-affiliated corporation continues to fight a $2.4 million property tax bill on the Save Mart Center even as Fresno County has slapped on a penalty and is poised to tack on monthly interest charges.

The California State University, Fresno Association -- a nonprofit corporation that built the Save Mart Center and runs commercial operations at Fresno State -- is appealing the assessment, saying the center should be tax-exempt because it is a school building.

The dispute -- involving one of Fresno's most prominent buildings -- could go into 2009. The issue has been simmering since the Save Mart Center opened in November 2003.

The county says the association should pay property taxes because 60% to 65% of the center's uses over the past three years were for noneducational events such as concerts, monster truck rallies and car shows.

The association challenges how the county came up with that figure.

The Save Mart tax bill was due Aug. 31. When payment wasn't made by then, a standard 10% penalty -- or $240,645 -- was added. If the property tax bill isn't paid by Oct. 31, interest charges will kick in, county officials said Thursday.

The monthly interest would be $36,096, said Cathy Lilly of the county auditor-controller/treasurer-tax collector's office.

The association acknowledges that the penalty is part of the ongoing assessment process.

"Obviously, we hope the appeals board would hear our case as soon as possible," said Deborah Adishian-Astone, director of the association.

The process is proceeding normally, said County Assessor-Recorder Robert Werner. "We're treating the association exactly the same way we would treat any taxpayer."

The association in March filed its appeal with a county board that hears disputes between property owners and the assessor's office. State rules say that board has two years from the date of the appeal to make a decision.

The association's appeal hasn't been scheduled yet for a hearing, said board clerk Gael Storm.

Werner said he expects the dispute will end up in court. Should the association win, it would not have to pay the penalty or interest, he said.

In the meantime, county officials say they will not initiate steps to take ownership of the Save Mart Center because of the delinquent tax bill.

The county can put homes up for auction if property tax bills remain unpaid for five years, but auctions can't be used in the assessment category where Werner said he had to place the Save Mart Center.

Fresno State -- which is exempt from property taxes as a state agency -- owns the center. This prevents the county from taking the building for delinquent taxes. But the county could file a lien against the association-- which could affect its credit score -- if the property tax bill is not paid this year, county officials said.

In mid-2005, the association deeded the building to the university. Adishian-Astone has said the association made the ownership transfer when it refinanced bonds used to build the center to get a lower interest rate. The university then entered into a lease agreement with the association to run the center.

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