DEARBORN HEIGHTS — After a two-year battle with the city of Dearborn Heights, the H.Y.P.E Athletics Recreation Center located on Warren Ave. announced this week that they have finally been recognized as a nonprofit organization by the city, receiving an exemption on property taxes.

The dispute between the recreation center and the city began after the organization opened its new facility in May 2012 under the impression that it would be exempt from property taxes after a verbal agreement was made with Mayor Dan Paletko. 

However, the recreation center was billed over $130,000 in property taxes after a city assessor determined that H.Y.P.E. was not eligible to be classified as a 501(c)3 nonprofit organization. The city claimed that the organization had not completed the proper paperwork to be exempt.

Despite the setbacks from the city, H.Y.P.E was classified as a 501(c)3 nonprofit by the Internal Revenue Service, exempting the organization from federal income taxes since 2008. It was also certified by the Department of Energy, Labor & Economic Growth as a nonprofit back in 2006.

The Community rallied behind H.Y.P.E. and collected over 26,000 signatures for a petition titled ‘Support HYPE.’ Over 300 businesses, universities, and community leaders provided letters, which were submitted to the State of Michigan Tax Tribunal to support its case against the city.  

In January of this year, the Tax Tribunal determined that H.Y.P.E. does meet all credentials to qualify as a 501(c)3 and ordered that the city recognize it as such as well. 

Paletko agreed to grant H.Y.P.E. exemption for property taxes on all years preceding the opening date of May 2012. The organization will still be responsible for paying property taxes from January 2011 through May 2012, during which time the recreation center was under construction.

The General Property Tax Act 206 of 1893 defines the case under sec. 7o. (1). Real or personal property owned and occupied by a nonprofit charitable institution, while occupied by that nonprofit charitable institution solely for the purposes for which that nonprofit charitable institution was incorporated, is exempt from the collection of taxes under this act. 

“I’m sincerely thankful for the support of the community on this issue. Mayor Paletko and the Council members did support the agreement and we’re thankful for that. We now hope to take productive steps together in servicing the thousands of families within the city and region,” said Ali Sayed, founder and CEO of H.Y.P.E. 

Mayor Dan Paletko told The Arab American News that he is looking forward to finally developing a beneficial relationship between the city and the recreation center now that the tax dispute has been settled.

“They certainly qualify and we are anxious in having a closer working relationship between city recreation programs and those of H.Y.P.E. I think working together, we will offer stronger programming for everyone in Dearborn Heights,” Paletko says. 

Dearborn Heights City Councilman Tom Berry also shared his thoughts with The Arab American News about H.Y.P.E.’s nonprofit status.

“I believe that they qualify 110 percent. Their contribution to the community goes without saying and I look forward to the city and H.Y.P.E. sharing services for the well being of the community,” Berry says. 

H.Y.P.E., founded in 2001, has served over 150,000 youths and families. The organization has since operated in partnership with school districts and municipal recreation centers across Wayne County.

In 2010, Dearborn Heights elected officials supported the construction of the center that now includes five full-sized basketball/volleyball courts, a women’s only and separate coed weight training rooms, a yoga center, spinning room, crossfit and sports performance center, 1/7 mile indoor track, two classrooms, computer lab, library, two full service restaurants and five outdoor fields. 

The center is in the process of completing its second phase of construction with the addition of an indoor pool and spa as well as sports rehab and therapy centers. 

Meanwhile, the recreation center is celebrating its 2nd anniversary on June 6 under the theme ‘The village raised the child.’ Tickets and sponsorship opportunities are available by calling 313.436.0043 or emailing asayed@hypeathletics.org.