Influential church battles back taxes

RELATED: Idora idleness frustrates residents

By Christine Keeling


Mount Calvary Pentecostal Church passes its Sunday collection plate to a congregation of 1,500 — including a few top Youngstown city officials — while county and state agencies wait for the thousands of dollars they are owed.

The Youngstown-based church has amassed a public record trail of debt that includes $257,950 in unpaid income tax, $38,000 in delinquent and potentially delinquent property taxes, $11,786 owed to the Ohio Bureau of Workers’ Compensation and loans totaling $2.5 million taken against properties it owns in Youngstown.

In addition, a state auditor found the church’s foray into a charter school, Legacy Academy for Leaders and the Arts, yielded a $598,000 operating loss, and the

Mahoning County prosecutor’s office is working to recover some of the funds.

Still, Mount Calvary leaders are considering building a new church on the former Idora Park property on the city’s South Side.

“It [debt] won’t plague the development plan,” said Jason Whitehead, chief of staff to Mayor Jay Williams and undershepherd of Mount Calvary Pentecostal Church. “Needlessly to say, under the new leadership of Pastor [C. Shawn] Tyson we are looking to retire all debt the church now has and move forward aggressively with building a new edifice.”

The church’s former leader, Bishop Norman Wagner, died in January 2010, and Pastor Tyson was installed in October.

Whitehead said the church’s plans are more dependent on how much the church leadership wanted to spend on a new building.

“It’s really the church deciding what they are going to build,” said Whitehead. “Are they going to build a $2 million church, or are they going to build a $5 million church?”

Whitehead said he wasn’t part of the church’s decision-making in the past but began getting involved in its development plans over the last year. Whitehead was a candidate for church pastor after Wagner‘s death.

Mahoning County Courthouse records show 11 tax liens filed against the church in 2010 by the Ohio Department of Taxation totaling more than $37,000 and four 2008 filings for more than $274,000.

Dan Tierney, public information officer for the Ohio attorney general, confirmed by email the church’s outstanding tax liability at $257,950. The state’s attorney general files liens on behalf of the state tax department.

John Kohlstrand, former communication director for the Ohio Department of Taxation, said tax-lien cases proceed after a tax payment goes delinquent or a return is not filed.

“It’s a little less common for a church to be involved in a tax issue, but it’s not unheard of,” said Kohlstrand, who was displaced in January by the Kasich administration.

Not including Legacy Academy, Mount Calvary Pentecostal Church has ties to nonprofit organizations Calvary Publications and Calvary Estates Inc., which received more than $4.2 million in U.S. Department of Housing and Urban Development loans for its senior-living apartments, Calvary Towers, on Market Street in November. The church also founded Mayor Williams’ alma mater, Calvary Christian Academy, which closed in 2001.

Kohlstrand said liens were placed against all properties the church owns in the county until the tax liabilities are resolved.

Mount Calvary Pentecostal Church and its defunct, private tuition-funded Calvary Christian Academy School own 88 properties throughout Youngstown and didn’t pay 2010 Mahoning County property taxes on more than 60 of them.

As of March, the Mahoning County auditor’s website showed the church owed more than $4,000 in delinquent property taxes in 2010. The church could be responsible for an additional $22,256 for its Idora Park property ownership. A 2007 tax-exempt application filed for Idora Park was denied by the state. The church has that decision under appeal.

American Tax Funding, a bulk-sale purchaser and servicer of delinquent property taxes, said in an email it had more than 300 property liens in the church’s and Calvary Christian Academy’s name that the Florida company bought when the church failed to pay its property taxes in previous years. The liens totaled almost $12,000.

The company said it had additional liens against the church and school that expired in April 2010. Ohio law gives lien purchasers six years to take action against property owners.

Whitehead said a nonexistent school owning pockets of properties isn’t good for the city.

“Taking off my hat as Mount Calvary member and putting on the hat of being chief of staff to the city, you want the owners [of land] to be someone who wants to cultivate that land, take care of the land and take pride in the land,” Whitehead said.

He said that throughout the years, people deeded many of the properties to the school after they died, and the church was unaware of their ownership until it got a tax bill.

The church “probably wouldn’t have accepted those properties if we had known in advance,” Whitehead said.

Whitehead said the church is considering turning some of the properties over to Lien Forward Ohio for future development. Lien Forward’s goal is to work with the communities to return land to productive use

A representative at iServe, a real-estate and mortgage lender in Texas, said the church had ignored all communication attempts regarding a $525 lien the company is servicing for unpaid property taxes at the church’s 1812 Oak Hill Ave. worship location.

And the church’s debt doesn’t stop at its doors.

Mount Calvary’s parking lot is home to its cash-strapped, trailer-housed charter school, Legacy Academy for the Leaders and Art, which opened in 2001.

According to a 2004 state audit, released in 2009, Legacy Academy had 153 students enrolled and employed 35 people. It received more than $1.2 million in state funding and accrued a $598,000 operating loss. Four of its five-member governing board are appointed by the church.

The audit showed the school collected more than $100,000 in federal withholdings, $16,318 in Medicare withholdings and $33,575 in city income tax from employee payroll checks, but didn’t remit the money to the Internal Revenue Service or the city of Youngstown.

The school “is subject to collection activity,” Mayor Williams, a church member, said in March, about past-due income taxes. “No entity is immune.”

Williams said he was no more involved in his church’s decisions than Catholic church members were in deciding which parishes were going to close.

Collection of city income taxes is contracted to the independent Regional Income Tax Agency, which wouldn’t discuss delinquent tax matters. It also filed a complaint against Legacy Academy for Leaders and Arts seeking $84,162 in outstanding city income tax April 18.

Of that, $62,070 was for taxes not remitted from employees in these tax periods: September through December 2006, all of 2007 and 2008, January through September 2009 and July through December 2010.

The additional $22,092 is being sought for penalties and interest.

According to the state audit, money exchanges between the school, the church and employees were inappropriate or undocumented. Among the findings:

Legacy Academy paid more than $26,000 for utilities and maintenance that should have been paid by its leaseholder, Mount Calvary Pentecostal Church.

The church received $6,897 for administrative services with no proper documentation or approval from the school’s governing board.

The school was obligated to pay annual rent to the church after its first year of operation in the amount of $540,000 but owed $154,000 at the time of the audit.

Some teacher’s expenses were reimbursed without proper receipts.

“We are in the process of recovering funds,” said Karen Gaglione, an assistant county prosecutor. “It’s not in a lawsuit state, yet.”

Although Gaglione said the parties were cooperating regarding issues outlined in the 2004 audit, the Ohio Bureau of Worker’s Compensation said it was shortchanged in 2010.

In November, Melissa Vince, spokeswoman for BWC, said a letter dated Oct. 22 was sent to the school regarding more than $11,000 it owed worker’s compensation since Sept. 2.

As of March, the amount was still owed, and new problems for the school surfaced.

Mahoning County Common Pleas Court records show the Ohio Department of Taxation filed income-tax actions against the school for more than $258,000 during December 2010 and January 2011.

Education had always been a cornerstone of the church, Whitehead said.

“The economic piece is being given a lot of attention,” Whitehead said. “We want to be an example of doing things correctly and doing things right, so there are no outstanding tax liabilities, no audit findings, etc.”

He said the church is looking at its future in the community school business.

“If the expenses are exceeding revenue and because it’s such a competitive arena, we are evaluating whether or not to remain in it,” he said. “And if we remain, what adjustments do we have to make to meet all expenses?”

Legacy Academy announced a public financial-emergency meeting at the school March 19, but no meeting appeared to take place.

Records at the Mahoning County Recorder’s office indicate how the church tried to handle debt in the past.

On June 1, 2007, the church used its worship address to secure a $1.8 million loan from America’s Christian Credit Union of California. It then settled a $1.5 million lawsuit filed by Teen Missions International of Florida for nonpayment of loans the church took to develop its City of God complex on the 26-acre Idora parcel and also paid more than $200,000 on liens held by the Internal Revenue Service.

In July 2007, Mount Calvary used its former Idora Park parcel and 13 of its other Youngstown properties to secure another loan for $680,000 from America’s Christian Credit Union. The loans totaled almost three times the market value on the county auditor’s website.

Edward Bolling Sr., chief financial officer of Mount Calvary and Legacy, would only offer that the church took loans from Teen Mission to purchase the Idora property.

“In order to protect the privacy and interest of the church, there is going to be information I’m not going to divulge without first finding out from Mr. Whitehead what information he divulged,” Bolling said.

He then declined to comment further. Further attempts to speak to Whitehead went unanswered, as did all attempts to speak with Pastor Tyson.

The NewsOutlet is a joint media venture by student and professional journalists and is a collaboration of Youngstown State University, WYSU radio and The Vindicator.

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