Township, innkeeper in dispute
- Published: July 28, 2011
Grinnell Mill Bed & Breakfast proprietor and resident Donna McGovern agreed at a court hearing last week to leave the Mill at the end of the month as a dispute continues between McGovern and the Miami Township Trustees over who should pay the B&B’s property taxes.
The Township is suing McGovern for back tax payments, while McGovern states that the responsibility to pay property tax was never part of her agreement with the Township.
McGovern received a notice of eviction from the Township earlier this year after refusing to pay an increase of $150 per month to her monthly maintenance fee to cover a potential real estate tax burden, which the property was likely incurring because it is a business and residence. The Township had previously thought the entire structure would be exempt from taxation based upon an opinion it received from the Greene County prosecutor’s office.
The Township sued McGovern earlier this year for $1,125 for the back payment of property taxes in addition to court costs. McGovern, who had agreed to run the bed and breakfast for five years, is counter-suing for $50,000 to cover lost profits, attorney’s fees and the damage to her reputation. The dispute may soon go to court if an agreement isn’t reached at a mandated Greene County Common Pleas Court mediation scheduled for next month.
“We were not going to ask the taxpayers of Miami Township to subsidize this operation, and most assuredly, we are not going to subsidize a business,” said Township Trustee Chris Mucher last week. “Using [taxpayers] money to pay her bills is something I can’t support.”
Mucher said the Mill will remain open to the public and as a bed and breakfast, though a new proprietor has not been confirmed. McGovern will take over as the proprietor at the new Glen House Bed and Breakfast nearby on Grinnell Circle.
Miami Township purchased the mill from Antioch University in 2004 for $1 to save the nearly 200-year-old structure from being dismantled or razed after it had fallen into disrepair and was deemed to be a fire hazard. Antioch University leased the Township the land on the 4.1-acre property for 90 years. After a four-year renovation by Jim Hammond with his in-kind donations, community support and $25,000 from the Township, a new non-profit, the Grinnell Foundation, took over the building to manage its upkeep. The foundation is run by representatives from the Township, the Yellow Springs Historical Society and the Glen Helen Ecology Institute. A bed and breakfast was started in 2008 to cover ongoing maintenance and utility costs.
According to a final determination by the Ohio Department of Taxation in May, the two bed and breakfast suites and the caretaker’s residence are not exempt from taxation and an as-yet-undetermined amount of tax is due on the property going back to 2008. Taxes from 2007 have been waived. The determination came after former Greene County Auditor Luwanna Delaney recommended that the university’s exemption request be denied in 2008.
The annual tax for the entire property is around $4,000 per year, according to the Greene County Auditor’s office. From information provided by the Ohio Department of Taxation, Mucher estimated about one-third of the building is taxable property. So from 2008 through 2011 the total tax bill may be around $5,500. But the Greene County auditor’s office has yet to determine the total amount due and the Township is not currently delinquent on its taxes, according to Greene County Auditor David Graham.
Under McGovern’s initial agreement with the Township in late 2007, McGovern was entitled to a free room at the Mill for her residence in addition to income from the bed and breakfast after expenses. In exchange, she agreed to keep the building open for a minimum of 10 hours per week, promote and advertise overnight accommodations, have rental space available for events and pay the Township $175 per month for long-term maintenance of the building, among other requirements.
McGovern’s lawyer claims the written agreement with the Township delineated the items of maintenance for which she was responsible and did not include real estate taxes, according to court documents. The Township’s lawyer argues the agreement was oral and that McGovern’s decision to not pay the increased rent was grounds for eviction.
According to profit and loss statements McGovern provided to the Township, from January 2008 to September 2010 the business never made a profit and incurred more than $10,000 in losses in that time period, losses that were covered by McGovern. However, the business was expected to be profitable in 2011. There were 627 overnight rentals and 27 day rentals at the Mill during that time.
Though McGovern did not want to comment on the case, as Common Pleas Judge Stephen A. Wolaver requested, she did express her sadness at departing from the Mill after three-and-a-half years.
“I’m sad about leaving here because it was so much fun for me, even though it was a lot of work,” McGovern said.