Masonic Care faces fight in annexation bid

CNY Business Journal (1996+), May 14, 2004 by Rombel, Adam

Masonic Care Community - the 650-employee, 400-acre, nonprofit, health-care complex split between Oneida and Herkimer counties - wants one home, and faces an uphill fight to get it.

Masonic Care in early April filed a petition to have the 200-acre portion of its campus that's located in the town of Frankfort (Herkimer County) annexed to the city of Utica (Oneida County).

Masonic Care, which has nearly $70 'million in construction projects under way on the Oneida County side of its property, says being located entirely in Utica would make it easier to get approvals for its aggressive expansion projects. "We're just trying to unify the regulations the whole campus operates under. It becomes a constant stumbling block worrying about four municipalities' regulations," says William J. Luley, executive director.

The move would also provide Masonic Care's Acacia Village retirement community, located in Frankfort, with access to Utica's professional fire department and larger police force. The Frankfort Center Volunteer Fire Department and Frankfort's relatively small police department currently serve Acacia Village, which has about 80 residents. Luley and Masonic Care officials contend that there's no reason for Herkimer County and Town of Frankfort officials to oppose the annexation, because no revenue would be lost on account of Masonic Care's tax-exempt status, and because they'd save money by no longer having to provide services.

'Land grab'

All four governments have to approve the annexation for it to happen. And, that now appears to be an unlikely proposition.

"The county in our initial view is against the annexation. We really believe that a land grab from one county to another is not the thing we should be doing," James Wallace, Herkimer county administrator, tells The Mohawk Valley Business Journal.

Though the Masonic Care Community is exempt from town, school, and county property taxes and does not make payments in lieu of taxes, Wallace, says that may not always be the case in the future. "We believe that during a future construction period, they would have to pay taxes," he says. Specifically, Wallace refers to a provision in the state-tax law that exempts Masonic Care Community as a fraternal organization from taxation of property that generates profits. But during a construction phase, the property might not be profitable and thereby at least temporarily lose its exemption status.

John Livingston, attorney for Masonic Care, says he doesn't believe an attempt to tax it on that basis would succeed, based on past court decisions.

The Town of Frankfort several years ago tried to tax Masonic Care, but Masonic Care had its exemption status upheld by state courts.

The next big step in the annexation process is a public hearing set for the evening of June 2 at West Frankfort Elementary School on Ferguson Road in Frankfort. After that, the four governments have 90 days to state their positions on the annexation.

Joseph P. Kinney, Frankfort town supervisor, declines to say how his town board is likely to vote on the annexation, but says he'd like Frankfort and Herkimer County to speak with "one voice" on the issue.

Kinney adds that Frankfort and the other governments have many issues to examine carefully regarding the annexation.

"This is a massive undertaking that will have a tremendous impact from a demographic perspective and a geographic perspective," he says, noting that school budgets, highways, and government services could all be affected by the move. "This is a unique situation."

On May 5, the City of Utica Common Council passed a resolution allowing its planning board to move forward in preparing for the annexation. Though the vote does not represent Utica's final approval of annexation, it was "an important green light" in the process, says Lorraine E. (Lorri) Arcuri, council member at-large, and chair of the council's codes and neighborhood preservation committee.

Arcuri says she urged her fellow council members to be cautious about the annexation and its impact on Utica, because the city doesn't have all the answers yet.

Tax-exempt status

"My concerns are related to what are the gains for the city and what is the loss to the city," she says. "[Masonic Care] is a tax-exempt facility and will be an additional burden to Utica for the services they need," Arcuri says, noting that if Utica were able to get Masonic Care to agree to make future payments in lieu of taxes for services the city provides, the annexation would obviously be more attractive to Utica.

If the annexation fails to get the approval of all four governments, the matter will go before a three-judge panel selected by a state appeals court, says Livingston. The panel's decision can be appealed to a higher court. Masonic Care is committed to seeing the process through to the end, says Livingston, a partner with the Utica law firm Getnick, Livingston, Atkinson, Gigliotti & Priore, LLP.

"We feel very strongly it's in the best interest of the community to go forward with annexation," he says.