Posted: February 26, 2015 at 2:41 pm
By Ryan Petrovich, Kevin Hooker and Courtney Tranter
University Place, a spanking-new, 900-bed student housing complex, sits high on a hill of Morgantown looking over the campus. Inside, retail shops, eateries, a fitness center, study lounges and roomy apartments make University Place a coveted environment for students to live.
But its construction has ignited a controversy over whether its developers are paying their fair share of taxes and city fees.
Indeed, University Place, along with the development of an even larger block of student housing known as College Park, has sparked a lawsuit from other builders who say the private developers who built these housing units are avoiding paying city fees and property taxes that other developers have to pay.
“They flat out did not pay zoning, get permits, or do anything that private developers have to do,” said David Biafora, a local developer who built Suncrest Town Centre and a number of off-campus student housing units. “It’s an unfair playing field that they get to do that.”
The developers that built University Place also don’t have to pay real estate taxes on the property, because the university owns the land and leases it to Paradigm Development Group, which developed the housing complex.
In addition, because the university is state owned, the developers adhered to the state building code, and the state fire commission did all the inspections. So the city of Morgantown did not receive any income in the form of inspection and permit fees.
“We didn’t have the funding ourselves to close on this land ourselves,” says David Martinelli, a professor of civil engineering at WVU and one of the developers of University Place. “So we thought maybe we could do a public-private partnership with the university.”
Martinelli says he thinks having University Place privately owned but managed by WVU is “the best of both worlds.” Parents like the fact that the building is managed by the university, which can boast an attractive on-campus housing complex, and the private developers benefit financially from the university’s tax-exempt status.
While the developers of University Place don’t have to pay taxes or certain fees, they say the city is getting plenty of revenue from the new development. For instance, the public-private partnership allowed the city of Morgantown to charge the developers business and occupation (B&O) taxes on construction as well as fire service fees just like any normal project. The city will also gain B&O taxes on the 900 rental units.
“We will get the B&O on the revenue generated by the rental of the units [and] get the fire service fees,” said Jeff Mikorski, Morgantown City Manager.
Mikorski noted that the city wasn’t getting much in the way of tax revenues from the Sunnyside houses that had to be torn down to make room for University Place. The city also received modest tax revenues from Mutts, a well-known bar in the neighborhood.
Overall, city coffers will benefit, Mikorski says. Sheetz and other eating establishments in University Place must give the city half a percent on all retail sales.
The city estimates it will generate roughly $75,000 this year from University Place.
“There’s definitely going to be an increase in revenue from the University Place, ” Mikorski says.
The lawsuit by the Biaforas and other private developers is still in ligation, Mikorski says. No ruling has been made.