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Clearwater changes foreseen from ruling

Title: Clearwater changes foreseen from ruling
Date: Thursday, 14 October 1993
Publisher: St. Petersburg Times (Florida)
Author: Ned Seaton
Main source:
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Pinellas County's property tax lawsuit with the Church of Scientology is badly wounded by an Internal Revenue Service ruling that the organization is exempt from federal income taxes, Property Appraiser Jim Smith said Wednesday.

CLEARWATER — Now that the Church of Scientology has been granted IRS approval as a tax-exempt religion, downtown Clearwater could be in for some major changes.

Scientology has no immediate plans to buy more property downtown, the home of the organization's international spiritual headquarters, said spokesman Richard Haworth. But he said the IRS decision will allow the organization to become much more involved in downtown-related causes.

"It speeds it all up," Haworth said. "We can expand everything we do."

That prospect makes some city officials and downtown business owners nervous.

The IRS decision "is a green light for Scientologists to buy more downtown property," said Gordon C. Williamson, owner of the Workbench, a downtown woodworking shop.

"In 10 years, you might as well call this Hubbardville," Williamson said, referring to Scientology founder L. Ron Hubbard. "It's obvious that if the city of Clearwater can't pursue back taxes and the tax base is sucked out — goodbye downtown."

County officials conceded Wednesday that the IRS decision makes it likely that Scientology property will be tax-exempt.

The city has not received property taxes from Scientology during the 11-year battle over whether the group's property should be tax exempt, and any tax money the city would have gotten would have been an unexpected bonus, said Finance Director Dan Deignan.

But Deignan figures that if the IRS decision had gone the other way, the city would have been in line for nearly $2-million in back taxes on the more than 11 Scientology-owned properties, valued at $25.4-million.

Anything that cuts revenues to city coffers limits the city's ability to fund projects to upgrade downtown, said Peter Gozza, executive director of the Community Redevelopment Agency.

"It could have a major negative impact on Clearwater," said City Commissioner Fred Thomas, who added that other residents and businesses essentially subsidize city services like police and fire protection that cover Scientologists. "The citizens of Clearwater are going to pay through the nose for this."

Haworth countered that Scientology adds substantially to the area economy by bringing in about 12,000 visitors per year. He pointed to a 1989 Scientology-funded study that showed an economic impact of about $113-million per year. That dwarfs any potential loss in annual property tax revenue, he said.

Williamson was one of the few downtown business owners willing to talk on the record about Scientology. Many said they feared that criticizing the organization could hurt their businesses, which are patronized by Scientologists.

One business owner tried to rip pages out of a reporter's notebook after a discussion about the effect of the IRS decision.

Downtown Development Board member Lillian Trickel, who owns a jewelry store downtown, called the IRS decision "what we don't need."

Business owners who identified themselves as Scientologists also declined to give their names.

Asked about the potential impact of the IRS decision on downtown, one said: "I think it's a great decision . . . but I don't see why it's an issue."