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Influential church battles back taxes



Published: Sun, May 15, 2011 @ 12:01 a.m.

RELATED: Idora idleness frustrates residents

By Christine Keeling

TheNewsOutlet.org

YOUNGSTOWN

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.


Comments

1Stan(9923 comments)posted 3 years, 5 months ago

Mount Calvary Pentecostal Church needs some serious management to coordinate all of its efforts . Tax exempt status must be secured and fund raising accelerated .

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2timOthy(802 comments)posted 3 years, 5 months ago

Good luck ! Hope your not responsible for liens or taxes .

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3TAXEDOFF(118 comments)posted 3 years, 5 months ago

What is about city employees like Jay's buddy Jason Whitehead who makes $74.000 a year and has been delinquent on his property taxes.

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4MattMarzula(109 comments)posted 3 years, 5 months ago

How is it that everything on this page including the comments seems to be right, and yet every last thing about it is so wrong? I pay my taxes, and I'm broke. Churches and businesses don't pay and the administration is strutting around like a bunch of fat cats. I stopped going to church when the sermons began to describe the graces of heaven and the torments of hell as the difference between turning the air-conditioning on in the summer and the heat on in the winter. Meanwhile, the donation envelopes were scheduled and labeled with suggested amounts and resources to be funded. I have zero moral conflict between chaining the doors of a church or private school shut until they pony up the dough. Wrong? Fascist? Too pro-government? Yeah, maybe. But if they can throw people out of their homes and cause a further burden on the system, then they can certainly place children in state funded schools and hold mass in their vacant amusement park per their constitutional right to peaceable assembly. I probably know very little about few things. But, of those things I am certain. One of them is that God doesn't need a $5 million dollar house to visit you once a week in and he certainly doesn't need me to dig down deep and pay his bills. I believe that falls in somewhere under the whole teachings on reverence and rendering what is due.

BTW, you never hear about Temples, Synagogues, and Mosque owing back taxes. Yet, I vaguely remember a story about Jesus flipping over the merch tables and telling money collectors to GTFO. I paraphrase...

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5Stan(9923 comments)posted 3 years, 5 months ago

If the idea of an Idora Park was viable they would still be in business . The Pentecostal Church had the money to buy the park after the bankruptcy . Nobody else was interested as the chance was there to buy . I am flattered that the church leaders choose to live in Canfield and Cortland amongs the rich white folks . Our Catholic Priests live at the church grounds to be amongst the people and to watch over the church . No one gives them much credit for this .

With the right leadership Mount Calvary Pentecostal Church could indeed override all of its problems and have phenominal growth . They are in a very fertile area for the saving of souls .

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6Silence_Dogood(1353 comments)posted 3 years, 5 months ago

Our Catholic Priests live at the church grounds to be amongst the people and to watch over the church ."

You must be forgetting about the Giant Mansion on Logan Way that the last Bishop lived in, what was it about 8,000 square feet of living space for just one person. It came with a lake, a waterfall, and a iron fence with a gate to keep out all the riff-raff.

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7peacelover(790 comments)posted 3 years, 5 months ago

Bishop Murray did not feel comfortable with the big ostentatious house on Logan Way and had it sold in favor of living in a much more modest house within the city of Youngstown. This is old news.

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8Stan(9923 comments)posted 3 years, 5 months ago

Silence_Dogood :

Yes indeed, our priests do live at the church grounds . See post #10 . . ..

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9hurrdurr(98 comments)posted 3 years, 5 months ago

Hand the Idora Park property over to Mill Creek Park already. Let the property have some dignity for once.

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10iBuck(223 comments)posted 3 years, 5 months ago

The local, county, state, and federal governments need to be put on a serious fiscal diet (and the guy in the photo needs to be on a serious caloric diet).

They shouldn't be taxing churches at all.

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11James_S(268 comments)posted 3 years, 5 months ago

The Church should not be taking a "loan" out in the first place.
The building of churches should be done using the offerings given by the congregations of that particular denomination.
In no way should any church be beholden to the State by taking a loan out from the State. Because if they do, the State "owns" the church until, at least, the debt is paid off.
It's too bad some churches have bought into the Keynesian economics scam that our government uses to their advantage.
Save and invest (in your churches).
Don't borrow from the State and have to repay them the principal PLUS the interest (usury).

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12Bigben(1996 comments)posted 3 years, 5 months ago

A lot of good points so far. A church itself should be tax exempt as far as I know. However I'm not sure about all the details on this one.

It seems like quite a web between government and the church itself.The bottom line is should the church be paying these bills and how many should be paid?If they must pay them then so be it.I do know that there is a lot of land at stake.It will be interesting to see how this one pans out.

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13Millie(192 comments)posted 3 years, 5 months ago

What an intricate web they weave? Didn't Whitehead have two houses foreclosed? The comment about Rusty's and his taxes was a good one - where is the headline about what has not been paid by Covelli or Phar Mor Centers?

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14Stan(9923 comments)posted 3 years, 5 months ago

The church needs to solicit more funding to satisfy its obligations . The next step if for church management to satisfy all future bills on a timely basis . As long as those who are involved with the church have a desire the sky is the limit as to what they can achieve .

http://1.bp.blogspot.com/_NcvyLOnshR0...

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15redvert(2075 comments)posted 3 years, 5 months ago

Bigben, good point on the church itself being tax exempt. I have no problem with that, my problem is all the other property a lot of churchs own that has nothing to do with religion but is tax exempt also.

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16redvert(2075 comments)posted 3 years, 5 months ago

Stan, you stated a couple times that all this church needs is good management to solve it's financial problems. How exactly is it going to come up with the close to $3 million dollars it owes if the numbers here are correct? That is not pocket change!

Please explain how you think it will happen especially during these economic times.

ps: I will not be donating!

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17Freeatlast(1991 comments)posted 3 years, 5 months ago

redvert( Stan will say anything that is right wing or to get a comment .
Do not not get into a debate as it is a lost cause . He or she has no belief or ethics he/ she just makes dumb comments

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18Stan(9923 comments)posted 3 years, 5 months ago

Freeatlast :

One thing that is very evident is the fact that you don't want this church to succeed .

redvert :

Funds can be gotten from other successful ministries in this country and abroad . One idea would be join another ministry in developing Idora Park into a retreat .

Studying other areas that have prosperity during tough times and using their ideas to bring prosperity to our area can indeed be one function of the church . Spreading the gospel and saving souls today needs far more than just a Sunday Sermon .

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19MattMarzula(109 comments)posted 3 years, 5 months ago

I'm going to go off subject and in my own way try to sum up why my church going experience doesn't exactly have me upset over the organization owing money. NOTE: The church owes money. Not one parishioner owes it for them.

In the late 90's Saint Dominic's church came up with roughly $3-million over night. A wealthy parishioner died and she left all her assets to the church and cut her family out of the will...showed them. The con game that gets played on the old and dying not withstanding, the church has always seemed to be pretty good at securing land, priceless artifacts, and money. Soon after receiving its $3M indulgence, the church which had no physical security and piles of dept had shut down the school and put up a huge fence. When the people who are my age noticed all these happenings, they sought salvation elsewhere and the church population dropped sharply. That is when St. Dominic's became truly nondenominational. They didn't care what the consistency of there attendees religious views were so long as the denominations were 5's, 10's, and 20's. Between it's leniency and dropping standards to the lowest common denominator, the church as a whole has done a pendulum swing from pandering to elitist to catering to faith-tourist. The Christian church has become the dollar menu of religions in this area. It sells a palatable doctrine that everyone can enjoy but it lacks substance. Unless your preacher is warning you of fire and brimstone, preferably in Latin, they really aren't preparing your soul for the worst case. Lack of preparedness is what leads to emergencies. Financial, physical, spiritual, emotional. So what exactly have they been getting right?

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20MattMarzula(109 comments)posted 3 years, 5 months ago

Also, I'd like to have a beer with Stan. They seem to be on point in spite of a mostly cynical view. Being a bit of a curmudgeon myself and full of great ideas that will never see the light of day, I can definitely dig when someone says "cut it off" after someone else raises the issue of having a gangrene limb. Too often our society wants to save the limb at the expense of the body.

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21FifthAve(169 comments)posted 3 years, 5 months ago

Because this church cannot pay the taxes, they should lose it.

In the meantime, the city should actively seek developers for this property. Think outside the box. It is a crime to allow prime property to rot! City planners don't seem to have inspiration or vision.

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22nikasymone(7 comments)posted 3 years, 5 months ago

More and more each day I see our elustrious Mayor somehow entangled in mess. Yes the southside is in need of serious help but while his side of town get's the attention the rest of our city is sufferring and while his church is getting away with paying back our city people like myself get hit hard for the little bit we make. Mayor, if you want our city to thrive again and want people to be held accoutable for their city, then look in your own back yard and make your church own up to their mess, give the money back or give up the properties.

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23Stan(9923 comments)posted 3 years, 5 months ago

A complex problem needs complex solutions . The Mount Calvary Pentecostal Church has good intentions but they need to solicit help from other ministries . Stripping them of all their properties and forcing them to close the doors to the saving of souls is not a viable option .

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24disgustedjoker(46 comments)posted 3 years, 5 months ago

I smell something fishy! How in the world does this church get away with not paying their bills when the citizens of the county would have their homes foreclosed on if they didnt pay their taxes!!!! Just look at the sheriffs sale, homes are lost every day due to tax sales! I predict that if this is investigated, some officials may be in trouble. Thank you Vindicator for FINALLY shedding some light to this as it's been going on way too long. Why dont you look in to all the government hires that came from the same church???

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25brntbarbour(18 comments)posted 3 years, 5 months ago

Mrs Christine Keeling,

Your story about the church is unfair and mean spiriited. You fail to mention the passing of the long time leader of the church and the fact the church operated without headship for a year as contributing causes to fiscal trouble. You also didnt bother to mention what an eyesore Idora Park was before the church acquired it. No one wanted the park, including the city. The grass and weeds were five feet high, and the place was littered with trash. It is a shame the Vindy would allow you to continue its assault on the church as it has done so many times in the past. Just like other organizations, churches are struggling too, Mount Calvary is no exception to hard Valley economic times. You also mentioned several entities that are only related to the church in name only and operate exclusively without church oversight. It is highly biased and unfair to lump all the business offshoots of the church under one business, as they are not one business, and are managed by others with no church oversight. As a writer-your objective should be to report the news-and let the people make their own opinions. This story should be an editorial on the back page, deserving little if any press. There are countless churches, and other city non-profits who owe their fare share of taxes too, not just this church. Most of the readership is not only unaffected by it, they do not live in the city anyway. Those who do live in the city know the value of the church, and all it has done for the community which can not be measured in dollars and cents. Unfortunately, your story is smut journalism, done with public record searches, that only reveals part of a story and paints a bad image full of half truths. If the Vindy has to stoop this low to increase readership, things are really bad at the paper, perhaps much worse than at the church. I think the church and the 1500 members who contribute to the collection plate you mentioned , ought to boycott your poorly written, poorly researched public records article and paper with its declining readership.

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26gingerspice(115 comments)posted 3 years, 5 months ago

"What's in the dark will come to light".
"Obey the government, for God is the one who has put it there. there is no government anywhere that God has not placed in power. so those who refuse to obey the laws of the land are refusing to obey God, and punishment will follow." Romans13:1-2
"Pay your taxes too,for these same two reasons . For government workers need to be paid so that they can keep on doing God's work, serving you. Pay everyone whatever he ought to have: pay your taxes and import duties gladly, obey those over you, and give honor and respect to all those it is due. Pay all your debts expect the debt of love for others- never finish paying that! For if you love them, you will be obeying all of God's laws, fullfilling all his requirements." Romans 13:6-8

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