WINCHESTER — Grafton School is taking Winchester to court over claims the city is improperly billing the educational services provider for real estate and personal property taxes.
The Winchester-based Grafton Integrated Health Network, which provides a variety of educational, treatment and support services to children and adults with autism and other developmental challenges, purchased American Woodmark's former headquarters at 3102 Shawnee Drive in January 2019 for $4.5 million. Grafton used the site to consolidate several of its administrative locations into one building while continuing to operate its main educational campus on property it owns at 120 Bellview Ave. in Winchester.
According to the Internal Revenue Service, educational institutions in the United States are exempt from real estate and personal property taxes. However, Winchester Commissioner of the Revenue Ann T. Burkholder has charged Grafton more than $160,000 in taxes for the Shawnee Drive property because, the lawsuit claims, she believes it is not being used for educational purposes.
"All real and personal property owned by Grafton School and ... located in the city since 1981 is used primarily for educational purposes or purposes incidental thereto ..." states the lawsuit filed Friday in Winchester Circuit Court by Stephen L. Pettler Jr., an attorney with the Winchester law firm Harrison and Johnston. "At no time has the city ever assessed Grafton School for the payment of real estate or personal property taxes ..."
Grafton, a not-for-profit corporation founded in 1958, also owns, or has owned, properties in Clarke, Frederick, Loudoun, Fairfax and Chesterfield counties.
"None of these jurisdictions ... has ever assessed Grafton School for the payment of real estate or personal property taxes," the lawsuit states.
Grafton is asking the court to strike the $160,537.84 in taxes, penalties and interest that Winchester claims it owes and to enter a decree stating the city has no authority to collect taxes on properties owned by the educational services provider.
Winchester is being represented by its city attorney, Melisa Michelsen. As of Monday, no court hearings had been scheduled.
This is the second time this year that Winchester has been questioned about charging real estate taxes to nonprofit organizations. In August, the city admitted it was wrong in 2019 to deny tax exemptions for properties owned by Winchester Little Theatre and Shenandoah Valley Community Residences.
Grafton, founded in 1958, is the third largest nonprofit operating in Winchester, behind Valley Health and Shenandoah University. It has more than 750 employees and operates four schools and 35 group homes in Winchester, Berryville and Richmond.
Grafton also provides contracted services to 85 localities from Virginia to Maine; supports intervention and integration programs in the Northern Shenandoah Valley and Richmond; operates a youth shelter in Loudoun County; and partners with Winchester to offer the Infant and Toddler Connection of the Shenandoah Valley.
For more information, visit grafton.org.