October 6, 2019; Philadelphia Inquirer
A five-year retroactive tax bill for almost a half-million dollars has been levied on a youth hostel in Philadelphia. The money the city has demanded would cover what’s alleged are unpaid hotel taxes, fees and interest for the years between 2008 and 2013.
Let’s be clear—there’s not much of a luxury hotel vibe at Chamounix Mansion. Guests pay $25 a night, sleep in dormitories, have to leave the building between 11 am and 4:30 pm, and stash any alcohol or tobacco elsewhere. They must also share space with troupes of younger folk visiting the historic city, something Philadelphia has said it wants to encourage.
As NPQ has reported many times before, the City of Brotherly Love has long had an eye on an aggressive PILOT (payment in lieu of taxes) program. But even in that context, this story seems a bit absurd, especially given that at least so far, Philadelphia does not have a PILOT program, with significantly wealthier institutions such as the University of Pennsylvania still successfully staving off the imposition of any PILOT payment. In this context, former mayor Ed Rendell calls the move to bill Chamounix $500,000 “manifestly unfair.”
“We didn’t enforce the tax because we viewed it more like a YMCA” than a hotel, Rendell says. Even though the city has a right to a new reading of its tax applicability, trying to gouge it for years of unpaid taxes during which it was not held responsible is unreasonable.
“It’s not like they were deadbeats and didn’t pay it,” Rendell observes.
Bill O’Brien, chair of the nonprofit’s board, says the organization would certainly consider such a proposal, but to his thinking, “there’s just no legitimate argument that it functions like a hotel or would be subject to the hotel tax.”
The mansion in which the hostel functions had been abandoned and was to be razed before a group of young Philadelphians brought the idea for a youth hostel to the city in the 1960s. The nonprofit that runs the facility, Friends of Chamounix Mansion, has a $1-per-year lease with the city. That $25 per night covers day-to-day operations, but the board raises the money required to maintain the facility.
“The mansion people provide a real service to the city,” Rendell says. “Not only do they attract young people—and we want young people to come to the city—but the mansion people, at their own expense, with the money they raise, keep the mansion up.”—Ruth McCambridge