A Superior Court judge has indicated that the Archdiocese of San Francisco won’t have to pay more than $22 million in taxes sought by The City over the transfer of hundreds of properties between different church entities.
The conflict arose after the archdiocese transferred 232 properties from two of its religious corporations to a third body. In late 2008, Assessor-Recorder Phil Ting’s office claimed the church corporations were separate legal entities and thus required to pay property transfer taxes.
But the archdiocese contended it was exempt from paying because the moves were part of an internal restructuring. The archdiocese filed the lawsuit in April 2010.
Last week, Superior Court Judge Richard Kramer issued a tentative ruling that the movement of properties such as Mission Dolores and St. Francis of Assisi from one archdiocese entity to another shouldn’t trigger transfer taxes normally imposed on real estate transactions.
Ting said The City will present its final case to the judge during a January hearing.
“If, after the Jan. 9 hearing, The City does not prevail, we’ll be sitting down with our attorneys to decide what the next step is,” Ting said.
Jeffrey Vesely, an attorney for the archdiocese, said although an appeal from The City could be in store, he is encouraged by the latest development.
“For cities and counties across the state, it’s not a great shock they need revenue and that they’re looking for it any way they can,” Vesely said. “I don’t know if this is a product of that, but we are very pleased with the decision by Judge Kramer.”
Robert Stolebarger — a private attorney contracted to represent San Francisco, could not be reached for comment, but he told The San Francisco Examiner in February that The City had given the church numerous opportunities to prove the actions were exempt.