Lutheran Senior Services will pay $600,000 in taxes in settlement with St. Louis County


Lutheran Senior Services, a nonprofit group that operates two senior apartment complexes in St. Louis County, has reached an agreement with the county assessor’s office to pay about $600,000 in taxes a year, according to a settlement filed in circuit court.

It is the second major settlement this year with an organization that provides high-end senior living spaces. In June, Bethesda Health Group agreed to pay $406,000 in property taxes this year on four properties in St. Louis County.

The Lutheran and Bethesda properties were the focus of a 2013 Post-Dispatch investigation that found that, without tax exemptions granted years ago by the County Council, properties owned by the two nonprofits would have paid $3.1 million in real estate property taxes that year.

Lutheran Senior Services, which operates Meramec Bluffs in west St. Louis County and Laclede Groves in Webster Groves, sued county Assessor Jake Zimmerman in St. Louis County Circuit Court in July after he placed those properties on the tax rolls following the Bethesda settlement.

An agreement for partial tax-exemption was ratified Tuesday by St. Louis Circuit Judge Barbara W. Wallace. The agreement also establishes a formula for how the county will assess properties in the future where there is a mix of independent living and charity care.

As he did with Bethesda, Zimmerman agreed that a portion of Lutheran Senior Services’ properties were entitled to tax breaks because they were being used for charity.

Zimmerman said Lutheran had argued “that they are a charitable organization and they do good work in the community and they should be treated as such.”

“The settlement we reached, while I’m sure they’re not thrilled with having to pay taxes on some of their properties, reflects the reality, which is some of their property ought to be subject to taxation because it didn’t meet the criteria for exemption.”

The amount collected from Lutheran Senior Services was slightly less than one-third of the $1.9 million the county would have collected if the properties had been deemed 100 percent taxable.

Under the agreement, Zimmerman’s office will review the Lutheran Senior Services properties at least every two years, consistent with the biennial reassessment cycle, to confirm each existing property, or any new senior community, is taxed properly.

In a prepared statement, the Rev. John Kotovsky, president of Lutheran Senior Services, pointed to millions of dollars dedicated to charity care to seniors who “outlived their financial resources.”

The newspaper’s investigation found some of the properties boast amenities aimed at wealthy retirees. Entry fees for independent living apartments in the nonprofit senior complexes operated by Bethesda and Lutheran run as high as $379,000, with monthly service fees greater than $2,000. And salaries paid to executives of Bethesda and Lutheran totaled $1.6 million and $1.4 million, respectively, in 2011. Bethesda executives also received country club memberships totaling nearly $37,000.

For-profit competitors that offer high-end senior housing do not get breaks. The Gatesworth, in University City, paid $491,000 last year in real estate taxes. And some nonprofit senior living communities are told to pay. In 2006, the county denied a request for an exemption by the nonprofit Friendship Village of West County, in Chesterfield. Its tax bill last year was $345,000.

After the newspaper stories, Zimmerman said in February 2014 he was starting his review of tax-exempt properties across the county, a “major project” that could take “many years.”

He said on Tuesday that his office was in the process of reviewing other “large properties” that he would not identify.

“When we’re in the middle of an active investigation; I’m not in a position to say what conclusions we will or won’t reach.”