Dearborn Heights recreation center HYPE fights to be recognized as non profit to avoid big taxes

HYPE has non profit status with federal government but not Dearborn Heights

Published On: Feb 06 2013 09:18:55 PM EST   Updated On: Feb 06 2013 09:19:05 PM EST
DEARBORN HEIGHTS, Mich. -

Before the Dearborn Heights community center was built, organizers say they were led to believe the city would recognize the center as a tax-exempt organization. That all changed when they received a bill.

It hasn't been in the city for a year, but the future of the multi-million-dollar recreation center now could be in jeopardy. The issue: Organizers do consider HYPE Athletics Community a non profit facility, but the city of Dearborn Heights does not.

Without the city's recognition as a charitable institution, HYPE is on the hook to pay hundreds of thousands of dollars in property taxes to Dearborn Heights.

"They're basically saying we haven't submitted enough information to prove our charitable status, when we feel otherwise," said Ali Sayed, HYPE founder.

There is a membership fee to join the facility but the organization provides tutoring, mentoring and other programs for free.

Despite its non profit status with the federal government, Dearborn Heights won' approve.

"Some of the concerns they have to address are some of the fees that they charge," said Dearborn Heights Mayor Dan Paletko. And how they cannot be discriminatory. They have to be very open to the general public. And those are items they need to define."

Non profit legal expert Randy Barker explains why Dearborn Heights may shy away from considering HYPE a non profit entity.

"Municipalities are struggling for cash to provide the services they provide. So, they're sometimes reluctant unless there's just a clear cut case that this person is entitled to this exemption," said Barker.

Sayed feels the city has a bone to pick.

"All I can see is the evidence has been brought forth, has been treated with discriminatory and biased treatment, basically," said Sayed.

The mayor recognizes that HYPE provides a good service to a lot of people but says he cannot order the assessor to break the law. Meanwhile, HYPE has began circulating a petition.