WATERVILLE — Is it appropriate for a tax-exempt nonprofit to occupy a building in a city commercial area?

That question has stalled an effort by the First Congregational United Church of Christ to lease a new city space after the Planning Board decided Monday night to postpone a recommendation on a required zoning change.

The church plans to sell its building on Eustis Parkway to the Children’s Discovery Museum and has been struggling to find a suitable space to move the church, whose membership has declined in number over the years.

Church members want to lease space in the former Boys & Girls Club at 6 Main Place, which is empty and owned by Uria Pelletier, and is seeking a revision to the city’s zoning ordinance to allow churches in commercial zones.

But the Planning Board voted 5-1 Monday night to postpone to Dec. 16 its recommendation to the city council on a possible zone change. The Planning Board does not have authority to make zoning changes — only the city council has that power — but the panel may make a recommendation to the council.

Contacted Tuesday, City Solicitor William A. Lee III, said he believes the commercial zone where the Main Place building is located be changed to allow religious institutions, per federal law.

“I think what the city has to do is make a change to the Commercial-A zone to add, in terms of permitted uses, religious uses,” Lee said. “Under federal law, if a municipality has zoning and a particular zone allows fraternal organizations and public assemblies, uses analogous to churches, the churches must also be allowed in that zone.”

Planning Board member Bruce White made a motion Monday night to recommend to the council that the Main Place property be rezoned to allow churches in the commercial zone, but members Chris Rancourt and Tom Nale said they wanted Lee to weigh in on whether rezoning is the appropriate decision for the city.

Lee said he spoke Tuesday with Nale, who called him.

“We discussed it and I told him if the zone allows similar types of uses — the public assembly-type thing— then you have to allow religious uses,” Lee said. “To restrict religious uses requires a very substantial, compelling governmental interest.”

Planning Board Chairman Paul Lussier said Monday he is as concerned about taxes as anyone else, but the board “can’t get into that swamp.” The idea that nonprofits do not pay taxes should not influence the board’s decision, he said.

“They do serve the community,” he said. “They have a function.”

Nale said he wanted to make clear he was not in any way denigrating churches. He said about half of the properties in the city are tax-exempt, which has created a variety of problems, including that Waterville has one of the highest property tax rates in the state. Nale said he thought the board absolutely should have an eye on the general schematics of the city.

The issue, Nale said, is not whether the board has any animus toward nonprofits or churches.

“The issue is, do we want to allow nonprofits into this particular zone,” he said.

Pelletier said nonprofits are everywhere in the city, and he would continue to pay taxes on the 6 Main Place building if the church locates inside it.

A Waterville native, Pelletier owns Kavestone LLC, a construction company. He has bought and is renovating four buildings into high quality apartments, employs workers who spend money in the city and pays a lot in taxes himself, including $7,000 annually on his home, he said.

He moved to Waterville from Rome and is spending money here, just as tenants will do when they move into his buildings, and as his employees do, he said. Pelletier’s company renovated both Opa and Waterville House of Pizza downtown. He bought the Main Place property last year, replaced part of the roof and plans to develop the building.

“Nonprofits are not a threat to the city’s income because when you take a person like myself — my Land Cruiser costs me more than $2,000 to register,” he said after the meeting.

Maureen Lynn Ausbrook, the Congregational Church’s minister of visitation and minister over the pastor of Starfish Village, an official ministry of the church that helps homeless people get back on their feet and find homes, said the church is not a new church — it has been in existence more than 150 years. Brokering a deal with the Discovery Museum is a big win for the city, she said.

“We’re committed to Waterville; we serve Waterville, and there’s not a lot of stock here,” she said, referring to spaces available for the church to relocate. She said the church does not have a lot of options.

“Our mission is here,” she said. “Not only do we serve an established congregation, we also serve a congregation of poor people here — people in need.”

White argued the former Boys & Girls Club building was a nonprofit for many years and having the church there would be a benefit.

“We’re going to lose nothing by allowing another nonprofit to go there,” he said. “What we will gain is a building that will look a lot better than it does now.”

Pelletier read aloud an email Lee, the city solicitor, sent to Mayor Nick Isgro in response to a question Isgro posed to him about whether the entire property would have to be rezoned to allow for a church there:

“If the zone allows a non-religious assembly or institution, a religious one must be allowed as well. Also, religious institutions must be allowed in a variety of zones. The government needs a compelling interest to prohibit them from  a particular zone. If this zone is commercial, it strikes me that prohibiting it would be difficult. As far as dividing a building into two zones, I have never seen such a thing done.”

Nale said he did not disagree with Lee’s comments and said he was inclined to think there may be another option for rezoning that had not yet been introduced and he would like to flesh that out with Lee before the board votes.

Pelletier said he preferred the board take no vote at all and have the request for rezoning go straight to the council so as not to delay the process.

White withdrew his motion to make a recommendation to the council at members’ urging and Rancourt made a motion to postpone voting until Dec. 16. Member Cathy Weeks seconded his motion. White was the lone dissenter in the vote. Rancourt, Weeks, Nale, Lussier and Samantha Burdick voted to postpone.

Pelletier said about 4,000 square feet of the south side of the building, which formerly was the office area for the Boys & Girls Club, would be renovated for the church, and another 1,000 square feet would be developed into a common area.

He said he also wants to train people in the building to work for his company.

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