Wilmington Selectboard members are expressing frustration that the Hermitage owes the town more than $300,000 in taxes on 25 properties, particularly after the town nearly ended 2017 with a deficit. After selectboard members discussed taking Hermitage properties to tax sale earlier this spring, the Hermitage entered into a payment agreement with the town. Under the agreement, the 2017 taxes would be paid in installments by the first of each month, with the final payment scheduled for August, days before the first installment of 2018 taxes was due.
According to selectboard chair Tom Fitzgerald, the end-of-year deficit was only avoided when the Hermitage paid their July installment a day early – on June 30, the last day of the 2017 fiscal year. Taxes paid for the sale of three lots at Stag’s Leap at the Hermitage also helped put the town in the black.
But board members say the missed payment raises the selectboard’s concern that they may be in for more delinquencies and another nail-biter at the end of 2018. “To help (Hermitage Club President) Jim Barnes during a financially difficult period, the town entered into a tax payment plan with him to avoid many of the Hermitage properties being sold at tax sale,” said board member John Gannon. “While he paid his back taxes, he failed to make his August tax payment. I would urge our town manager to pursue all legal options open to us, including tax sales.”
Many of the properties on the list of unpaid August installments are lots with small amounts of money owed – some as low as $5.30. But several of the properties are significantly in arrears, the highest of which is $179,259.77 for the Haystack Ski Area. Other properties on which taxes are unpaid include Haystack lifts ($23,922), the Haystack Golf Course ($14,847), and Chamonix properties adjacent to the clubhouse ($57,890). In total, the Hermitage owes Wilmington $293,852.07 in taxes, $6,565.48 in penalties, and $365.37 in penalties. (The penalties arise from $8,099.20 in unpaid fiscal year 2017 taxes.)
Wilmington collects its taxes in two installments, the first in August and the last in February. Taxes are not considered “delinquent” and subject to penalties or tax sale until property owners have missed both payments, but the town charges interest on unpaid taxes beginning with the first installment in August. Selectboard members say the August payment isn’t “optional,” and the revenue is necessary for town operations. “We need the Hermitage to be making a commitment to this town,” Fitzgerald says. “We’re all in the same boat. Our budgets are based on projected revenue, and that includes taxes from the Hermitage Club. Right now, we’re OK, but will reality set in when we hit February? We anticipate that we’ll get both payments in February, but if we don’t it could put us in the red. To come up that short puts us over a barrel. That’s the kind of thing that keeps selectboard members up at night.”
Fitzgerald also expressed concern that the Hermitage’s delinquency with the town is also reflected in the business community. “There are a lot of contractors and vendors who are owed money,” he said. “The Hermitage should not be trying to survive on the backs of contractors and small businesses. That (debt) is quicksand for a lot of contractors. They shouldn’t have to wait for that money.”
In Dover, four Hermitage properties are delinquent on their fiscal year 2017 taxes, and also missed their August payment for 2018 taxes. The Hermitage owes $89,143.20 in taxes on their namesake property, the Hermitage Inn, including $58,322.87 in 2017 taxes, and $30,820 in unpaid 2018 taxes. Nearly as much, $80,771.27 in unpaid 2017 and 2018 property taxes, is owed on the Sawmill Inn. The Hermitage also owes $30,682 on the Snowgoose Inn, and $8,675.55 on the former Whippletree B&B. In total, the Hermitage owes Dover $209,271 in property taxes.
According to Dover Treasurer Marco Tallini, the town plans to take delinquent properties, including those owned by the Hermitage, to tax sale in November. The town has sent out notices to property owners demanding payment by October 1, or the town will begin preparing the properties for tax sale.
Tallini says the delinquencies in Dover do not have the same impact as those in Wilmington had this spring, but with a full year of delinquencies and an unpaid first installment in August, town officials are concerned that the amount could “start adding up.”
Note: As of press time, Hermitage Club officials had not responded to a request for comment on this article.