Kennedyville developer has not paid taxes on 'donated' property

The developer of the Village at Kennedyville has not paid the property taxes, which has become a sticking point for the donation of the property to Kent County.

CHESTERTOWN — By unanimous vote last week, the Kent County Commissioners agreed to cover the unpaid property taxes on the remaining empty lots in the Village at Kennedyville so that donation of the land can move forward.

At the Dec. 21 meeting, County Administrator Shelley Heller said that while performing due diligence on the documentation and background of the property, it was discovered that property taxes for the current fiscal year had not been paid.

“It has become apparent to us that the developer would prefer to not pay the taxes in exchange for the property,” she told the commissioners.

There had been discussion about waiving empty lot fees, Heller said, but not about waiving the property taxes.

“The other wrinkle in this is that if we are paying the property taxes, then it’s not completely a donation. I would say that it’s a partial donation or substantial donation,” said County Attorney Tom Yeager. “It wouldn’t be a gift deed, or no consideration. The consideration would be us paying the property taxes on behalf of the transferor.”

According to county officials, developer GB Kennedyville owes about $7,500 in unpaid property taxes.

“We were expecting them to pay their property taxes when we made our agreement. … If they don’t intend to pay them and they don’t agree to that, then what happens,” Commission President Tom Mason asked.

Yeager said the county could ask the developer to pay the taxes to move forward with the donation; the county could pay the taxes for them; or the county could allow the developer to walk away from the deal and the property would go to tax sale after two years.

“It’s not for anybody’s benefit for this to go to tax sale. … We heard what the people who live in the neighborhood think and to let this over $7,500 go to tax sale would not be in the best interest of the people who live there, and it would take a long time,” Commissioner Bob Jacob said. “I think we should absorb the cost and move forward and take care of our citizens.”

There was discussion over whether the county would have to issue a 1099 form to GB Kennedyville for property taxes the county would cover since it would essentially be a gift.

“Whatever the law says, we are going to do,” said Commissioner Ron Fithian.

“I think we should move forward with this and if come Jan. 15 we find we have to 1099 them, then we do,” said Mason.

The motion to pay the taxes and give Mason signing privileges passed 3-0.

As of press time Wednesday, Dec. 29, the transfer of property had not taken place.

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