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Scientology buildings may be auctioned

Seattle lawyer Walter D. Palmer says it was strictly "a business decision." But a result of an investment he made with business associate John G. Ritchie could result in a forced sale of Church of Scientology buildings in downtown Clearwater.

And holding the auction for the men would be the Pinellas County government.

Scientology lawyer Paul B. Johnson said he will seek an injunction to stop the sale.

The proposed auction, which Palmer suggested two weeks ago, relates to Scientology's annual tax battle with Pinellas County. County Property Appraiser Jim Smith refuses to give the church a tax exemption. Like his predecessor, Ron Schultz, he says that Scientology is a money-making operation and ought to pay taxes.

The church, which has its spiritual headquarters in Clearwater, is fighting the taxes in drawn-out court proceedings that may get to trial later this year. The church considers itself strictly a religious organization and thus tax exempt.

Meantime, the county says the church owes $3.4-million in property taxes since 1982. The Church of Scientology owns 12 properties in Clearwater worth $21.5-million according to the property appraiser's office.

Florida counties have a system to ensure that their coffers don't run dry when people don't pay property taxes. First a tax collector files liens, or legal claims, against the property. Then those liens are sold at annual auctions where investors bid an interest rate. Rates can be as high as 18 percent, simple interest, a year.

Investors make their money when the property owner pays the taxes and interest to the county, and the county in turn pays the investors. If two years pass and the property owner still hasn't paid the taxes, the investors can ask the county to auction off the property.

That's what has happened in the case of Scientology.

Court injunctions kept the county from selling tax certificates on Scientology properties for several years, but in 1986 those injunctions were lifted when county attorneys argued that the sale would not harm Scientology Interests.

Palmer and Ritchie, and Seattle investors, bought five tax certificates when the church did not pay $51,058 in 1986 taxes. The certificates are for properties the church uses as offices and dormitories. The Fort Harrison Hotel, another church property, is not among them. The buildings are at 118 N Fort Harrison Ave.; 25 N Fort Harrison Ave.; 15 N Fort Harrison Ave.; 516 Franklin St.; and 500 Cleveland St.

Two years later, the investors want to collect, and on May 30 gave the county preliminary notice. The county in turn told the church that if it doesn't pay, the property will be sold to the highest bidder. Typically, investors bid for the buildings, hoping to get property for a fraction of its worth.

It's unlikely the Seattle investors will ever get the Scientology buildings, all parties say.

Still, says Steve Hart, the county's delinquent-tax supervisor. "it's a matter of the Church of Scientology either paying the taxes or obtaining through a court procedure something that would prohibit us from holding an auction."

Palmer suggested Monday that the church simply pay the money "under protest, (because) they can always get the money back if they win" the suit with the county appraiser.

But Johnson said the church shouldn't have to pay in advance — and certainly shouldn't risk losing its property. "The church feels that they are entitled to an exemption" from taxes, he said. "And while we're litigating this, the church ought not to have to pay it."

He said he intends to file for the injunction next week.