Axis Philly: Are Tax Exemptions and Abatements Beneficial?

The Rev. Terrence D. Griffith preached before parishioners who gathered for worship services at the First African Baptist Church Feb. 24.

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Many people are concerned about the re-evaluation of all 579,000 properties in Philadelphia, including those that are tax exempt, with some questioning whether the benefits of nonprofit tax exemptions and residential tax abatements outweigh the negative impact on the city.

The Rev. Terrence D. Griffith preached before parishioners who gathered for worship services at the First African Baptist Church Feb. 24.
The Rev. Terrence D. Griffith preached before parishioners who gathered for worship services at the First African Baptist Church.

“The gentrification of the area — you owe that to Kenny Gamble [founder of Universal Companies],” said Terrence D. Griffith, pastor of the First African Baptist Church and the recently reappointed president of the Black Clergy of Philadelphia and Vicinity.

“I think it’s really for the betterment of the community. The downside is that you find a lot of the African-American folks moving away. Yet even with that migration of people you still have a good mix of African-Americans, Caucasians, Asians.”

The demographics of Graduate Hospital have changed significantly over the years. Beginning in 1900, the population changed from 82 percent Caucasian to 80 percent African-American within 40 years. In 2000, the African-American population had decreased to 73 percent and has since dwindled to 54 percent, according to the U.S. Census Bureau.

“It’s sort of a quilt in the area,” Griffith said, “and I think that’s good for development.”

There’s no shortage of development in the city.

In fact, the city’s tax-abated and exempt properties would generate nearly $280 million in additional funds. That figure is based on the proposed 1.3 percent tax rate, which won’t officially be determined by city council and the mayor until May 31.

Why are nonprofits exempt from paying property tax?

If a qualifying nonprofit property is used for its tax-exempt purpose, it is eligible for a real estate tax exemption because it performs activities and provides valuable services that benefit all residents, according to the Office of Property Assessment.

“We feed 125 homeless people every single Saturday,” said Griffith.

The First African Baptist Church of Philadelphia is a nonprofit that was created in 1816. It receives a tax exemption for its property, which was built on land at 16th and Christian streets for approximately $100,000 in 1906. Its reassessed value for 2014 is $2.1 million, an increase of almost 1,000 percent from its 2013 value of $227,500. If the church lost its tax exemption, it would pay $27,340 at a 1.3 percent tax rate.

The Black Clergy of Philadelphia and Vicinity is also a nonprofit. It was created to unify African-American clergy from various denominations to promote equality, brotherhood, community improvement, economic development, job fairness, housing and education to enhance the welfare of African American’s throughout the area.

“We’ve been actively involved in advocating against the school closings,” said Griffith.

In fact, the clergy formed as a result of a school strike in 1981, which lasted about 50 days. Churches responded by opening up their facilities to children in need of tutoring and day care since teachers stopped providing education and parents had to work. African-American ministers from various denominations organized a plan to end the strike. The clergy blocked the intersection of Broad and Vine streets and worked with the teachers’ union and the School Board to resolve the dispute.

Parishioners worshipped at the First African Baptist Church Feb. 24.
Parishioners worshipped at the First African Baptist Church.

“A lot of churches are now forced to sell because they can’t afford to maintain,” said Griffith. “I would like to see some initiative to ensure that the historic African-American churches are kept in the communities. We certainly do not plan to leave.”

But most parishioners of the First African Baptist Church come from within a one-mile radius and a majority of them belong to the dwindling African-American population.

Others, who used to live in the neighborhood, still have strong ties to the church. “I joined the church when I was 15 years old,” said Pearl Davis, a 74-year-old retired teacher. “I take two buses to get here.”

Davis found it difficult to maintain and heat her longtime Graduate Hospital home after her mother, who had been a member of the church since 1940, died. So she had to move. Now she travels to the church by bus three times a week in order to participate in the feeding ministry, the choir and prayer services.

“If we do move,” said Griffith, “then we do want to preserve the history of this place [and] we will consider making the church a museum.”

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