Though growing and thriving today, it hasn’t always been so. As recently as seven years ago, the ministry had dwindled to one of hospitality, primarily renting out space to religious and nonprofit groups.
Randy Bare, a campus minister at the University of California at Berkeley, approached the PresHouse leadership with an idea: convert the chapel parking lot into an apartment building, and use the income to fund a revitalized campus ministry. Bare was involved with a similar house at Berkeley, which was recently sold because of financial constraints.
In 2007, the PresHouse apartments opened, offering housing for 240 students in comfortable apartments in the heart of campus. The apartments are available for rent to any student, regardless of religious affiliation or belief.
Co-Pastors Mark Elsdon and Erica Liu came to PresHouse, a subsidiary ministry of the Synod of Lakes and Prairies, as construction was under way. They are excited about the ministry of PresHouse and the apartments in particular.
A full-time resident chaplain intern offers support to all the residents, and programming and volunteer opportunities for the campus community. Plans for expansion include hiring a full-time director of residential ministry, who would oversee development of some intentional communities within the apartment building. These would include communities for recent veterans and for students in substance abuse recovery, and an Abrahamic interfaith community, where students of Christian, Jewish, and Muslim faiths could live and learn together.
Blindsided by taxation move
Those hopes could be dashed by a surprise legislative move to cancel the apartments’ tax-exempt status.
“When the apartments were under construction, it never occurred to us that we wouldn’t be tax-exempt,” said Elsdon. The chapel and apartments are tax-exempt under federal tax codes, and a conversation with the local alderman revealed no reasons for concern. Then the city tax assessor approached PresHouse and said that since the apartments didn’t fit into any existing tax exemption, they would have to pay property taxes to the city. PresHouse paid the taxes under protest for two years.
In 2009, state Rep. Spencer Black sponsored clarifying legislation that would ensure tax-exempt status for PresHouse and the apartments, with the support of the Madison City Council. But in January 2011, the Apartment Association for South Central Wisconsin hired a lobbyist to press for repeal of this exemption.
A repeal was passed by a joint committee to be included in the state budget, even though the exemption has no fiscal impact on the state. If the exemption is repealed, the estimated $200,000 per year tax bill would make it financially impossible to run the apartments. PresHouse might be forced to sell the apartments to the university, at which point the apartments would again be off the city’s tax rolls.
As the budget moves through the Wisconsin Assembly and Senate, the repeal could be removed by either body. State Rep. Don Pridemore and state Sen. Leak Vukmir are working with a growing coalition to remove the repeal before the budget passes, but the outcome is uncertain. PresHouse is mobilizing Wisconsin residents to contact their state representatives and senators to request that they block the repeal. If it reaches the desk of Gov. Scott Walker, he could, if willing, remove it with a line item veto. Up-to-date information can be found at http://www.preshouse.org/abt.home.cfm.
Should the budget be signed with the repeal in place, PresHouse might consider legal action to challenge the constitutionality of taxing church-owned property. The taxation effort raises questions about the rights of churches and non-profit organizations to use their property to support their ministry or mission, and PresHouse leaders wonder where it will stop. They worry about the state setting a precedent that could impact other ministries and churches across the country. Similar houses are operating at the University of Illinois and California Polytechnic State University, and projects are being explored or already being built in West Virginia, Iowa, Ohio and Missouri. O
Editor’s Note: As this edition went to press, the Outlook received word that Wisconsin Gov. Scott Walker had announced his intention to veto the provision in the 2011-13 budget that would have required the Presbyterian Student Center to pay property taxes on PresHouse Apartments.
by STEPHANIE SORGE WING, Outlook special correspondent