Is the Church of Latter Day Saints an Unfair Business Competitor?
From the Wall Street Journal, Feb. 2020
My God-son from Pittsburgh owns a home in Ft. Myers, Florida. A black kid who grew up in the projects of Pittsburgh — and in my house in Ingram when he was homeless with no diploma — now lives like a old, white, retired civil servant or mid-level manager (the real money is a bit further south) with a great pension. Life sure is funny that way, he isn’t even 40 yet. All his neighbors are from up north too — Minnesota, Wisconsin, Illinois and Minnesota. The planned community is more like a resort. It has a movie theatre, health center, oft-used pickle ball courts converted from what were originally little-used tennis courts, a restaurant, and a huge pool even though most of the snow bird’s houses have pools too. The houses are small and ridiculously priced and the HOA fees are just stupid. At least the costs were too high until a hurricane two years ago wiped out a really funky and happening beachfront close by. The drinking spots on the beach where we used to listen to Jimmy Buffet style artists have not yet been entirely rebuilt yet. But the outdoors is still sunny and endless, I guess.
There are also investor landowners who have no intention of playing pickleball. An interesting article in the Miami Herald the other day says that the Mormon Church is one of the largest private landowners in Florida. Last year the Church bought six warehouses down in Hialeah for $174 million. It was “the biggest industrial transaction in Miami-Dade County for 2023” and contributes to the Church’s ownership of more than 2 percent of Florida’s landmass. I’m interested because Sam Brunson has been following the litigation out west regarding whether the Church fraudulently obtained tithes and offerings. I’m not so much interested in the fraud allegation. I think the allegations should fail to the extent they are based on the assertion that organized worship organizations must spend money on things we think charitable. We don’t exempt churches for the charity they perform. We exempt them because its constitutionally easier than taxing them. Besides, what if giving to the poor and needy is not part of a church’s beliefs. Can we deny that church tax exemption?
Still, I don’t know what to think about the Mormon Church shrewdly gobbling up commercial property in south Florida. The properties are taxable, presumably, because they continue to be used as warehouses and other commercial purposes. But what about the Church’s ability to use tax exempt donations and infinitely untaxed earnings on those monies in what the Herald describes as a very competitive market? Something bothers me about that. I think it was Susan Rose-Ackerman who might have challenged or dispelled the belief in unfair competition leading to IRC 511. I can’t find the article right now so I could be wrong. But doesn’t a wealthy church have a tax advantage in the acquisition of coveted investment assets? Is the Church’s continuing acquisition an example of the unfair competition that motivated the 69 act? I’m just asking, I wouldn’t know what to do about it. Besides, if a church says land or material acquisition is part of its beliefs — as the LDS Church says according to the last paragraph below — how can its unrelated acquisitions ever really be unrelated? Anyway, here are the parts of the Miami Herald article that got me thinking about it.
Though the church’s plans aren’t clear, one commercial real estate expert said the recent transactions show demand remains high for warehouse space in South Florida, given the state’s population boom and growth of online shopping and home deliveries. Buyers have an “insatiable appetite” for warehouses in South Florida, said Steven Wasserman, international vice president at Colliers. “E-commerce has changed the world. Whether you want to buy a sweater at Macy’s in the store or have it delivered to your house that has changed everything,” Wasserman said. “E-commerce is stronger than ever.”
The LDS church is one of Florida’s largest private landowners, owning more than 2 percent of its landmass, according to reporting from The Salt Lake Tribune. The church has owned Deseret Ranches, a 290,000-acre cattle and citrus farm spanning three counties in Central Florida and located about 50 miles from Orlando International Airport, for over 60 years. Farmland Reserve, Inc., a nonprofit entity of the church with headquarters in Salt Lake City, purchased the Florida farmland in 1950. The Deseret Ranches website says the ranch “serves as an agricultural investment and resource to support the Church’s charitable efforts.” The website also says the ranch pays property taxes, unlike religious institutions, and supports the local economy. In 2013, the LDS church made another major land purchase: 400,000 acres in Florida’s Panhandle region, for $565 million, according to Reuters. Land purchases such as these are made through church-owned businesses such as Property Reserve, Farmland Reserve and AgReserves Inc.
The church’s website outlines certain tenets that seem reflected in the accumulation of real estate. It states that a large part of LDS culture is welfare and learning to become self-reliant, or being able to take care of the spiritual and physical needs of themselves, their families and their communities. That can include starting their own business, being wise with finances or accumulating resources to prepare for uncertain times. The LDS church also operates resource storehouses or “Bishops’ Storehouses,” which are like supermarkets without the till, and are paid for by donations from church members. There are 260 facilities across the country that offer food and household products to anyone — in or outside of the church — who is struggling. The idea is that, should the world descend into chaos, LDS members will be prepared to weather the storm.
darryll k. jones