# Michigan - House Bill 5325 (2016)



## Bloke (Apr 4, 2016)

I've been saying for a while, one of the challenges facing masonic centres is Tax. Rates and Land Tax are two burdens which sit heavy on us - something we all know.

It is with interest I read of House Bill 5325 (2016) in the State of Michigan. Freemasons in that State are encouraging their members to talk to their local reps about it.

The proposed Amendment is
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
SEC. 4A. (1) REAL PROPERTY 1 OR ANY PORTION OF REAL PROPERTY
2 OWNED BY A CORPORATION ORGANIZED UNDER THIS ACT AND OCCUPIED SOLELY
3 FOR MASONIC PURPOSES IS EXEMPT FROM AD VALOREM PROPERTY TAXES
4 COLLECTED UNDER THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL
5 211.1 TO 211.155.
6 (2) PERSONAL PROPERTY OWNED BY A CORPORATION ORGANIZED UNDER
7 THIS ACT AND USED SOLELY FOR MASONIC PURPOSES IS EXEMPT FROM AD
8 VALOREM PROPERTY TAXES COLLECTED UNDER THE GENERAL PROPERTY TAX
9 ACT, 1893 PA 206, MCL 211.1 TO 211.155.


https://www.legislature.mi.gov/(S(zlerevldghqror1dt0yffkfq))/mileg.aspx?page=GetObject&objectName=2016-HB-5325

These taxes surely curtail some of our ability to preserve historic buildings, but more significantly for residents for the State of MI, Freemasonry's ability to fund charitable causes.

Ending these taxes would be a good thing.


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## Classical (Apr 4, 2016)

Yeah. They say they want us to keep historic buildings. But then, they tax us to death, inflict expensive code enforcement and wonder why we can't afford them! Looks like a good partial solution in Michigan.


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## dfreybur (Apr 4, 2016)

I know lodges that open buildings that have rentals and are therefore on the tax roles.  I know lodges that are off the tax roles and as such can only rent to non-profit tenants.

It costs vastly more to own a building that pays for itself but in the long run I'd much rather have one building that is the stale core of a district that ten buildings that eventually becomes albatrosses on ten or more lodges.  All at the same original purchase price.

Don't want your lodge to have a building the instant you can afford any building.  Wait until the lodge can afford a building that pays for itself.  Very hard to have that level of patience.


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## Bloke (Apr 4, 2016)

I agree dfreybur - it has to be sustainable. The problem for many building owners, is they were built on a model of masonic income supporting them, and with falling numbers and rising costs, that model is unsustainable and external income is needed. The further problem is, rather than finding that income, many groups focus on reducing expenses, until the condition of the building becomes terminal. That said, tax is a huge burden. It costs us about $25K AUD (that's around $19K USD) to keep our building open - and tax is a huge percentage of that... it would be great to have that burden lifted..


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## dfreybur (Apr 5, 2016)

Bloke said:


> I agree dfreybur - it has to be sustainable. The problem for many building owners, is they were built on a model of masonic income supporting them, and with falling numbers and rising costs, that model is unsustainable and external income is needed. The further problem is, rather than finding that income, many groups focus on reducing expenses, until the condition of the building becomes terminal. That said, tax is a huge burden. It costs us about $25K AUD (that's around $19K USD) to keep our building open - and tax is a huge percentage of that... it would be great to have that burden lifted..



One of my Illinois lodges was Arlington Heights 1162.  We owned our building off of the tax rolls as a non-profit.  That meant we had to rent to other non-profits at a tenth the rent of commercial tenants.  The income never covered the repair costs.  Eventually the repairs the building needed exceeded the net worth of all bodies that met there.  We sold it to a company that put a commercial building on the lot.

After selling the building we moved a couple of towns over and lost our ability to draw candidates from our home town.  We consolidated.  That's why one of my Illinois lodges is Barrington 522.  Being in a building without commercial tenants to pay a positive cash flow literally starved my lodge out of existence in a process that took roughly 5 decades.

Reducing expenses only works until your building needs a wall/root/elevator replaced.

Rich Dad Poor Dad says to list your house as a liability not as an asset - Assets pay you.  You pay liabilities.  Any lodge building that does not turn a positive cash flow from rentals is a liability not an asset.

My California lodge owns a building that generates a positive cash flow from rentals.  We're a source of stability in the district.  My Texas lodge is a tenant in a building that generates a positive cash flow from rentals.  Our landlord lodge is a source of stability in the district.


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## Bloke (Apr 5, 2016)

dfreybur said:


> Rich Dad Poor Dad says to list your house as a liability not as an asset - Assets pay you.  You pay liabilities.  Any lodge building that does not turn a positive cash flow from rentals is a liability not an asset.
> 
> My California lodge owns a building that generates a positive cash flow from rentals.  We're a source of stability in the district.  My Texas lodge is a tenant in a building that generates a positive cash flow from rentals.  Our landlord lodge is a source of stability in the district.



That's it in a nutshell... 

Sorry to hear you found yourself in a situation where your traditional source of candidates was compromised - I assume that was a bad thing...


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## dfreybur (Apr 6, 2016)

Bloke said:


> Sorry to hear you found yourself in a situation where your traditional source of candidates was compromised - I assume that was a bad thing...



When two lodges consolidate it matters what each lodge brings in.  If the combination totals anything other than a healthy lodge, expect to be shopped for another consolidation in a few years.  My mother lodge Pasadena 272 has absorbed a bunch of troubled lodges over the year.

The consolidation of Barrington 522 and Arlington Heights 1162 worked well.  They brought an active candidate pipeline, officer line, local candidate flow.  We brought an investment portfolio and very good appendent body relations.  Both lodges brought active PMs.

The major flaw in the consolidation ended up the stairway up to the lodge room.  Enough aging brothers needed either a flat building or an elevator.  That adds an item to my mandatory shopping list.  In addition to a positive cash flow the building needs an elevator unless it's flat.

I've seen a fair number of VFW and Moose lodges that own a strip mall.  Their entrance is on the side or in the back so the entire structure is flat.


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## Bloke (Apr 6, 2016)

VFW ?

Two weak lodges consolidated all too often do not solve the root problems and create a larger but still weak lodge...


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## Bill Lins (Apr 7, 2016)

Bloke said:


> VFW ?



"Veterans of Foreign Wars"- an organization made up of those who served in the American military during wartime.



Bloke said:


> Two weak lodges consolidated all too often do not solve the root problems and create a larger but still weak lodge...


All too often true.


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## Bloke (Apr 7, 2016)

Thanks Bill.. never seen that acronym


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## Ripcord22A (Apr 8, 2016)

Bill_Lins77488 said:


> "Veterans of Foreign Wars"- an organization made up of those who served in the American military during wartime.
> 
> 
> All too often true.


Ill add " in a combat zone."  Thoae that served but never left the states are not elligible

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## Glen Cook (Apr 8, 2016)

jdmadsenCraterlake211 said:


> Ill add " in a combat zone."  Thoae that served but never left the states are not elligible
> 
> Sent from my LG-H811 using My Freemasonry Pro mobile app


The American Legion is for those of us who sat safely in a legal office in Rota, Spain, saying, "Stop, or I'll sue."


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## Brother JC (Apr 10, 2016)

Glen Cook said:


> The American Legion is for those of us who sat safely in a legal office in Rota, Spain, saying, "Stop, or I'll sue."


Or those of us who were in El Centro teaching sailors and marines to swim in sand.


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## dfreybur (Apr 10, 2016)

Brother JC said:


> Or those of us who were in El Centro teaching sailors and marines to swim in sand.



Or for those of us whose anti-submarine patrol squadrons were not needed when the Soviet Union invaded Afghanistan.


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## Warrior1256 (Apr 10, 2016)

My mother lodge used to have their own building but after a number of years it was draining the lodge financially. We now rent the local Knights Templar Commandery as do three other lodges. This worked out well for all of us.


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## Bloke (May 2, 2016)

https://www.votervoice.net/mobile/GLM/Campaigns/45896/Respond


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## Companion Joe (May 3, 2016)

dfreybur said:


> Or for those of us whose anti-submarine patrol squadrons were not needed when the Soviet Union invaded Afghanistan.



Or for those of us who were already at sea on a Knox Class Frigate playing cat and mouse with a couple of Soviet subs when Desert Storm took place.


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## Ripcord22A (May 4, 2016)

dfreybur said:


> My California lodge owns a building that generates a positive cash flow from rentals.  We're a source of stability in the district.  My Texas lodge is a tenant in a building that generates a positive cash flow from rentals.  Our landlord lodge is a source of stability in the district.


 
Here in Santa Fe, NM the AASR temple is a building in downtown that was built in 1906 for the express purpose of the AASR valley.  Im not up on all the ins and outs but the building belongs to the valley BUT is technically owned by the Scottish Rite Building Foundation.  This allows the bodies to still be 501(3)c-tax exempt- but allows us to rent the building to entities like Paramount pictures, Longmire the tv show, Santa Fe opera and things like that and make a killing.  we just had a finance report at the last meeting and we were abouyt 7k ahead of where we thought we were going to beat the end of 1st qtr.  for the building alone.  I forget what the numbers were for the bodies themselves but we are in the black.  Anyone that is in the know of the AASR should know what went on in the valley at the end of 2014, so this is great news.


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## dfreybur (May 4, 2016)

jdmadsenCraterlake211 said:


> Here in Santa Fe, NM the AASR temple is a building in downtown that was built in 1906 for the express purpose of the AASR valley.  Im not up on all the ins and outs but the building belongs to the valley BUT is technically owned by the Scottish Rite Building Foundation.  This allows the bodies to still be 501(3)c-tax exempt- but allows us to rent the building to entities like Paramount pictures, Longmire the tv show, Santa Fe opera and things like that and make a killing.  we just had a finance report at the last meeting and we were abouyt 7k ahead of where we thought we were going to beat the end of 1st qtr.  for the building alone.  I forget what the numbers were for the bodies themselves but we are in the black.  Anyone that is in the know of the AASR should know what went on in the valley at the end of 2014, so this is great news.



A building nice enough to be used for TV shows is a blessing.  My mother lodge has been on JAG, Unsolved Mysteries and a number f other shows.  That helps the building stay well know so there is also a constant stream of weddings and other events.

What I've seen lately is other orders buying a strip mall and meeting in back.  I've seen Legion, VFW, Moose and so on do this.  Initial cost is vastly higher but very much worth it.  One of the lodges in my mother district rents the bottom floor to commercial tenants and meets upstairs.


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## Ripcord22A (May 4, 2016)

I was mistaken...please see the following on the actual structure of the building and valley.....
Sorry, I got side-tracked. The Temple Preservation Foundation is the 501(c)3—non-profit organization—that authorizes the Building Association to act as a 501(c)2—title holding corporation—to retain the title to the Temple. However, we still haven't switched the title from the old and outdated Lodge of Perfection, No. 1 corporation that was set up in 1908. Apparently, we are waiting on the IRS to recognize the Building Association as our appointed 501(c)2 and file it appropriately. The valley bodies are all under a 501(c)10 designation—fraternal organization.  I believe our saving grace was the Temple Preservation Foundation, the 501(c)3, that allowed us to form a title holding corporation, a 501(c)2.

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## Ripcord22A (May 4, 2016)

Bloke said:


> USED SOLELY FOR MASONIC PURPOSES IS EXEMPT FROM .


Am i correct in assuming that as soon as we let a nonMasonic group use our building or if we charged people to park in our lot during a city function we would not fall under this act?



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## Bloke (Feb 14, 2017)

Looking at this

http://michiganvotes.org/2016-SB-732

Does that mean it passed  after resubmission ?


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## Bloke (Feb 14, 2017)

Hmm

https://legiscan.com/MI/bill/HB5325/2015


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## Ripcord22A (Feb 15, 2017)

Appears to have passed

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## Bloke (Feb 15, 2017)

It does...


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## Warrior1256 (Feb 15, 2017)

Cool!


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