Some Common Questions We Still Get (Part 1 of 4)

ZIPPER JUNCTION

9652.00 - dreamstimelarge_23169077Over the months of spreading the word about The ZIPPER JUNCTION Project™ and soliciting feedback in order to gauge community acceptance, several questions seem to always come up. 

There are four that are pretty important to understand and were recently part of a conversation on one of our social media challenges. They were so good that I decided to share this with out community at large. 

Over the next couple of weeks, we’ll be in touch answering these questions. For today, I’ll share the questions and start by answering the first one below. 

It started like this…

“I have seen this before, it is a nice thing but…….a few things that jump out are:

1 – Does that area have the tourism numbers to cover the expenses as the taxes will be massive?

2 – Finding property that could support that kind of massive development(may be difficult).

3 – Fighting off protest as you know groups will say it will harm the environment.

4 – Funding as per the layout in video, that thing is going to cost hundreds of millions to construct.”

“Does that area have the tourism numbers to cover the expenses as the taxes will be massive?”

Here is my reply:

The immediate area does not have the numbers to sustain this project, nor does the area barely have enough local revenue potential to support much of what it needs, and some of what it wants. 

This is addressed in the scope of focus for potential guests and demographics across a 200 mile radius from the proposed site. Like other models that facilitate movement from these types of origination locales to the desired destinations, this too is the model we intend to use. 

Do not simply build it and wish they come. 

Build it, facilitate the trip, and go get them. 

This involves marketing and interaction with the hundreds of school districts in the target area for instance. The model works very well for other fundraising operations and according to the national experts in the field, will work in this operation. 


For instance some of our strategic partners are in the transportation business, some more conventional like tour busses, others in more unique ways.
 

As far as tax burden, that is both an interesting question and will be a controversial one to be honest. 

The business model we are working with is based on both operations profit AND property taxes being considered exempt via the non-profit status. Operational profit tax waiver/tax exemption is fairly easy to secure. 

1006.00In order for the property taxes to be considered waived, the HUP (Hospital Utilization Project vs. Commonwealth – 1985) test must be met. Unlike examples of religious camps within the region, which indeed meet the non-profit requirements for profit tax exemption, most do not meet the requirement for property tax exemption. Yes, many have had, and do have, that status, sometimes to the detriment of the area they are located in because of tremendous burden they place on a rural municipality. However, many of the camps in the region lost lawsuits filed by the municipalities because the camps did not meet the five point test, specifically #4 and #5. 

We believe the operation we propose meets the five point test, the hardest being the relief of some governmental responsibility which will be satisfied via the offerings to the schools, social services, and even municipal aid.

The five requirements are as follows for reference:

1 – Advance a charitable purpose

2 – Operate entirely free from private profit motive

3 – Donate or render gratuitously a substantial portion of its services

4 – Benefit a substantial and indefinite class of person who are legitimate objects of charity

5 – Relieve the government of some of its burden

In addition to seeking this tax elimination strategy, we intend to facilitate what is called a PILOT (payment in lieu of taxes). This is an amount agreed upon through negotiation between the entity and the taxing municipality. It boils down to overall benefit for an area vs. burden to same area. The formula varies as to how a number is calculated, but it could take into account payroll expense as a baseline. 

Also to be considered is the fact most of the land being considered is currently in tax free status via an environmental program called Clean and Green (no revenue now), which is another issue to clear up first and reverse, but is possible. The operation we propose ties directly to the benefit of the local area and will create either a net zero burden or slightly positive in the area’s favor when all factors are considered.

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I realize this may seem like jargon to some, but I assure you, it is not. We’ve done our homework through and through to minimize any unforeseen situations arising once we go into full-steam-ahead mode. 

Next week, I’ll be in touch to answer the other questions posed. 

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