PLYMOUTH, Mich. – When a nonprofit took over ownership of the historic theater, the group applied to exempt it from property taxes like other similarly owned nonprofit theaters in the state.
But the problem is the city of Plymouth denied the theater tax-exempt status, and “Friends of the Penn,” the group that runs the Penn Theatre, says it can’t survive in the long term without it.
Executive Director Ellen Elliot says the building was inching towards demolition when Friends of the Penn took up a lease on the theater to save it back in 2006.
In December 2021, they purchased the building outright for $1.2 million and put another million dollars into the renovations.
“We had to take out a mortgage, the one saving grace we thought was property tax exemption, and that did not happen,” said Ellen Elliot of Friends of the Penn.
The city denied their request for a tax exemption station.
“The tax accessor said we didn’t prove that we did not reduce the burden of government,” Elliot said.
City Manager Paul Sincock says it isn’t about the nonprofit itself but rather the qualifications required of a nonprofit to meet that tax-exempt status.
“The city does not have the authority to just grant tax-exempt status as it has to go through a particular process,” said Sincock.
Sincock says he couldn’t comment on the Penn Theatre specifically due to its pending legal status.
Elliot says they provided binders of proof at a Board of Review meeting following that initial denial; the board did not decide one way or another, so now, the Michigan Tax Tribunal will decide.
Without the tax exemption, Friends of the Penn says it will only be able to operate the theater for another five to seven years.
All of the donations they use to fund improvements and offer their space to the community would continue to be diverted to pay the $25,000 tax bill.
Sincock says regardless of the legal outcome, the city will work with Friends of the Penn to ensure the theater’s survival.