By Tom Donaldson, Atlantic News Staff Writer
Atlantic News, Friday, September 10, 2001
[The following article is courtesy of Atlantic News]
HAMPTON -- Seacoast United Soccer Club officials Mike Simchik, president of the board of directors and Paul Willis, director of development, came before the town board of selectmen Monday to discuss the organization's tax exempt (or not exempt) status. For the past several years, the club has been declared by the federal government to be a 501-C-3 organization, a designation that exempts charitable groups from paying taxes. The selectmen had agreed and with the promise from the club that they would make a donation to the town, exempted them from town tax. They were good for the promise and last year gave the town $15,000 which allegedly is about half of what their tax bill would have been.
A recent newspaper article and a reporter's call to town attorney, John McEachern alerted the selectmen that the club had recently incorporated under the name Seacoast United Soccer Club Inc., a for-profit corporation. Simchik explained that the directors had attempted to borrow money from the Small Business Association (SBA), and were told that they did not make loans to not-for-profit organizations. According to Simchik, SBA suggested that they incorporate and apply for a loan under the incorporated club name to allow for "more creative ventures."
News that came out of a Dover, NH, planning board meeting indicated that the club was applying for permits to build a large 9 field soccer complex in Dover. The applied-for loan would apparently be used to help finance that project. Selectmen had asked Simchik and Willis to explain the complex matter to them and to Attorney McEachern. The selectmen had only praise for the club and the facilities in Hampton that have provided programs for thousands of youngsters and adults. They agreed that they had never heard the first complaint about the services provided. The question was only about the tax exemption status.
Selectman Brian Warburton praised the club stating that he and his children had actively participated and supported it. He had voted for the tax exempt status and felt nothing had changed. He strongly criticized the reporter who had broken the story and for contacting the town's legal council. Selectman Bonnie Searle had read a paragraph from a document that suggested that if there are questions about the tax free eligibility of an organization, it probably isn't (exempt). She also suggested that Warburton had a conflict of interest because of his active participation and should have excused himself from voting for the tax exempt status in the first place.
McEachern stated that he felt Warburton did not have a conflict of interest but defended the newspaper reporter's right to call whomever he or she wished. He suggested that the owners of a facility would bear the tax liability and Simchik previously stated that the for-profit organization owned the building.
Following a long discussion it was agreed that the legal council for the soccer club would confer with McEachern, who would then come back to the selectmen and suggest the proper action or non-action to take.