Piper Shores and the town are moving forward with legal action to settle a tax exemption lawsuit. Krysteana Scribner / The Forecaster

SCARBOROUGH —  Piper Shores and the town are moving forward with legal action after mediation to settle a lawsuit that could cost the town $1.4 million in annual property tax revenue went unresolved Sept. 4.

The owners of Piper Shores filed the lawsuit about 11 months ago in Maine Superior Court. The retirement community, the town’s largest taxpayer, claims its assisted living and skilled nursing units located in one building at 15 Piper Road are tax-exempt under Maine law. The claim allegedly conflicts with a 1997 contract zone agreement with the town stating that Piper Shores would pay property taxes on these units.

Town Manager Tom Hall said Piper Shore’s claims are unfounded and that town officials have found well-developed case law that he believes will provide a rational, legal basis for denying the request.

According to Maine rules for abatement requests, for nonresidential property valued at $1 million or more, the initial appeal of the decision of the assessor goes to the local board of assessment for review. Subsequent appeals go to the State Board of Property Tax Review, followed by the Superior Court.

“(Piper Shores is) challenging their assessed value and pursuing an abatement that will be heard before the board of assessment review on Nov. 18,” Hall said in an interview Oct. 9. “We’re just waiting for the court to schedule oral arguments at this point.”

Maine Life Care Retirement Community, doing business as Piper Shores, owns and operates the property as a retirement community offering assisted living and skilled nursing care for people 62 and older. Piper Shores has a total assessed value of $85 million and an annual property tax bill of more than $1.4 million, which also includes a second property at 18 Piper Road, taxed annually at $28,000.

In the complaint, Piper Shores states the town tax assessor wrongfully denied a request for an exemption and treated the exempt property as taxable. Several attempts to reach Piper Shores representative Andrea Killiard by phone and email for comment were unsuccessful.

At the center of the dispute is a contract zone agreement reached by the town and the retirement community that was approved by the Town Council in November 1997.

In exchange for rezoning to accommodate 160 independent living units and 40 cottage units, Piper Shores agreed to pay annual property taxes on the otherwise exempt nonprofit nursing homes and assisted living facilities.

Piper Shores made several changes over the years, including the addition of 40 independent living units in cottages, four assisted living units and eight skilled nursing units added in 2004. The community now has 350 residents in four areas of care: independent living, assisted living, memory care, and nursing, with 190 people on a waiting list for independent living.

In the fall of 2017, Piper Shores completed an expansion that added 30 assisted living/memory care units, to increase the number of licensed assisted living units to 50. The number of licensed skilled nursing units remained at 40.

The new additions came with an increase in property taxes. Piper Shores applied for tax-exempt status for the specified units Jan. 23, 2018, for the April 2018 assessment deadline. The request was neither denied or granted, according to the complaint.

Rather, Piper Shores received two tax bills from the town last September for $1.4 million and $28,000 for the two units in question, without follow-up on their request. Piper shores filed its lawsuit on Oct. 25, 2018.

Piper Shores claims that, despite the 1997 agreement, all of its property was being assessed and taxed by the town, including the property originally thought to be exempt under the agreement.

Piper Shores also believes that the assisted living and skilled nursing care units qualify for further tax exemptions as a charitable, nonprofit institution, although Hall said he doesn’t think Piper Shores fully understands what the document says.

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