2017-06-22 / Life in Leelanau

S-B gives up on BayView taxes

By Eric Carlson
Of The Enterprise staff

Suttons Bay Township plans to “write off” about $175,000 in unpaid personal property taxes owed by a now-defunct corporation that was involved in a complex and protracted bankruptcy proceeding involving the developer of the BayView condominium project several years ago.

Last year, the Suttons Bay Township Board hired a private investigator to determine whether a corporation known as Flathead-Michigan still exists and has assets with which it could pay off delinquent personal property taxes owed on a marina on the Suttons Bay waterfront adjacent to the condos.

The Suttons Bay Township Board and members of the public in attendance at last week’s regular monthly Township Board meeting learned that the investigation revealed that Flathead- Michigan existed only on paper and currently has no assets. Also, investigators determined, no one associated with it can ever be required to pay the overdue personal property taxes.

In a 5-0 vote the Township Board authorized township Treasurer Cathy Hartesvelt to petition a local court to strike the “uncollectible” personal property taxes from the township’s tax rolls.

Such a procedure is routine and customary in many townships when a business owner goes out of business or dies owing personal property taxes. The amounts involved, however, are usually much less.

The township allocated up to $1,200 for the private investigation.

Township treasurers are obligated to collect delinquent personal property taxes. County treasurers, on the other hand, are obligated to collect delinquent real property taxes. Last year, the county was required to “charge back” hundreds of thousands of dollars in unpaid real estate taxes on numerous BayView tax parcels to local units of government that were “made whole” by the county’s Delinquent Tax Revolving Fund.

The County Treasurer and several local units of government that owed local property taxes on the BayView tax parcels have settled on how much those units needed to pay back following a lengthy and complex set of negotiations.

Hartesvelt noted that the BayView Condo Homeowners Association has largely resolved its issues with Flathead and the former developer of BayView, and continues to enjoy “beneficial use” of the marina even though Flathead is still technically the holder of the lease of the Lake Michigan bottomland under the marina. She said it will be up to the State of Michigan to resolve the issue of who holds the lease and who pays personal property taxes on the marina going forward.

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