For the past four years, two limited liability companies (LLCs) that own and lease buildings to Harvest Bible Chapel have escaped paying hundreds of thousands of dollars in property tax. But that soon may change.
These LLCs have been treated like tax-exempt nonprofits, even though they’re for-profit companies owned by both private investors (who have never been publicly disclosed) and Harvest Bible Chapel.
One of these LLCs—Harvest Bible Chapel (HBC) Northshore LLC—has not been assessed tax since 2015 on almost all the property it owns and leases at 1731 Deerfield Road in Highland Park, Illinois. The church building on this property is home to both the Deerfield Road campus of Harvest Bible Chapel and a Montessori School.
However, a few weeks ago, the Chief County Assessment Office for Lake County, Illinois, sent HBC Northshore LLC notice of a proposed increase in the assessment of the Deerfield Road property—from $378,423 to nearly $6.8 million. This would mean the tax on the property would jump from about $10,000 a year to an estimated $160,000—$185,000/year. The county also has filed an “omit” for the past three years, meaning that HBC Northshore LLC would have to pay back taxes likely totaling more than $500,000.
The other LLC—Harvest Bible Chapel (HBC) Aurora LLC—was granted an exemption from property tax by the Illinois Department of Revenue in 2017 for the building and 16.7 acres it owns and leases at 101 S. Barnes Road in Aurora, Illinois. This is where the Aurora campus of Harvest Bible Chapel meets.
Your tax-deductible gift helps our journalists report the truth and hold Christian leaders and organizations accountable. Give a gift of $30 or more to The Roys Report this month, and you will receive a copy of “Hurt and Healed by the Church” by Ryan George. To donate, click here.
Yet, a citizen filed a complaint in late October with the Kane County Assessment Office, claiming that the LLC is not qualified for a tax exemption and that HBC Aurora LLC’s application for exemption was rife with inaccuracies. As a result, the Kane County Assessment office now says it is investigating HBC Aurora LLC’s exemption. According to Mark Armstrong, supervisor of assessments in Kane County, there is no timeline for this investigation. But he added that when the investigation is complete, the findings will be presented to the Kane County Board of Review, which “will take whatever action is lawful and just.”
I’ve also received a copy of HBC Aurora LLC’s application for exemption. And included in the application is a document that incorrectly states that HBC Aurora LLC is a “not-for-profit corporation.” Several other documents claim that “the Aurora campus of Harvest Bible Chapel” (a nonprofit) is seeking the exemption, not HBC Aurora LLC—a separate, for-profit entity. Also submitted with the application were several documents that were required of the “applicant.” Yet the documents submitted did not belong to the applicant, HBC Aurora LLC, but to Harvest Bible Chapel.
A Former Harvest Member Raises Objections
The person who filed the complaint with the Kane County Assessment Office is Jessica Hockett—a former member of Harvest Bible Chapel and a micro-blogger on Twitter. Hockett also lodged a complaint with the assessor in Lake County and Moraine Township, which caused them to reassess the Deerfield Road property belonging to HBC Northshore LLC.
In an October 4 letter to Lake County Chief Assessor Robert Glueckert and Moraine Township Assessor Mark Lindsay, Hockett argued that HBC Northshore LLC does not qualify for a property tax exemption because it is not a church. “Historically, (1731 Deerfield Road) has been owned and occupied by a church, but the current owner of the property only appears to be a church because of its name,” Hockett wrote. “(HBC Northshore LLC) is not a church. It’s an entity whose members profit from rental income via leases to a church and a school.”
Similarly, Hockett wrote in her complaint to Kane County Assessor Mark Armstrong and Sugar Grove Township Assessor John Karas: “(HBC Aurora LLC) is not a 501(c)(3). It is a two-class LLC that passes income (profit) through to its members . . . Based on Illinois law, I believe that 101 S. Barnes has been erroneously granted an exemption that has potentially cost the county and township tens, if not hundreds, of thousands of dollars.”
According the Illinois Department of Revenue, an organization qualifies for a property tax exemption only if it meets two requirements. One, the organization seeking exemption must be an “exclusively beneficent and charitable, religious, educational, or governmental organization.” Secondly, the property in question must be used for charitable, religious, educational or governmental purposes, and “not leased or used for profit.”
Neither HBC Aurora LLC nor HBC Northshore LLC appear to meet either of these criteria. They are not organized for exclusively charitable or religious purposes. According to Harvest Bible Chapel’s most recent financial statement, both HBC Northshore LLC and HBC Aurora LLC were formed to “acquire, own, and lease property” to the church. (HBC Northshore LLC also leases its property to Montessori Connection West preschool.) And rather than passing all their income to Harvest Bible Chapel, the LLC’s pass their income to their members.
According to the financial statement, HBC Aurora LLC leases its property on Barnes Road to Harvest Bible Chapel for $21,250/month. And HBC Northshore LLC had an agreement to lease its Deerfield Road property to Harvest Bible Chapel for $23,500/month. That agreement expired on July 31, 2019. I contacted Harvest Bible Chapel for information about an updated lease agreement, but the church did not respond.
An “honest error/mistake”
According to Lake County Chief Assessor Robert Glueckert, who assumed office last May, the omission of most of the property at 1731 Deerfield Road from the tax roll was likely an “honest error/mistake.”
He said when HBC Northshore LLC purchased the property in 2015, the county ended the exemption on the property and notified Moraine Township to make a new recommendation. But apparently, Moraine Township never sent a recommendation. And Glueckert said the property continued to be assessed the same way it had when owned by the previous owner—Northshore Lutheran Ministry, an Illinois nonprofit.
Until just recently, HBC Northshore LLC had been assessed tax on only the house on the parcel at 1731 Deerfield Road—not the church building nor the 4.4 acres of land. Now it is being assessed tax on the entire parcel.
Mark Lindsay, the Moraine Township Assessor who assumed office in 2018, said he’s not sure what to make of the fact that the company hasn’t paid tax on much of the property it owns. “I could see it being an honest mistake,” he said, “and I could see it being a scam. They (HBC Northshore LLC) need to come up with proof that they’re exempt.”
Lindsay added that he was surprised when he discovered the price HBC Northshore LLC paid to acquire the property—$4.85 million. He told me it appears to be a “high sale compared to other church sales in the area.”
I reached out to Harvest Bible Chapel, which still manages the LLC, for comment, but no one responded.
According to both Lindsay and Glueckert, HBC Northshore LLC had 10 days from the time of notification to appeal the new assessment on the Deerfield Road property. Glueckert said the LLC did not appeal within the allotted window, so the new, nearly $6.8 million assessment is the assessment for 2019. He added that he’s submitted an omit for three prior years, as well.
Glueckert added that someone from HBC Northshore LLC had called his office and had indicated that the LLC will be applying for an exemption. Glueckert said if that happens, the application will go to the Lake County Board of Review, which will make a recommendation to the state. He said ultimately, the decision about exemption will be made by the Illinois Department of Revenue.
Impersonating a Nonprofit/Church?
Unlike Lake County, Kane County required HBC Aurora LLC to apply for a property tax exemption when it acquired the property on Barnes Road in 2016. But as mentioned previously, the application included several incorrect documents.
For example, the warranty deed that HBC Aurora LLC submitted with its application states that HBC Aurora LLC is “an Illinois not-for-profit corporation,” which it is not.
According to Stuart Whitt of Whitt Law (the firm that represented Orchard Valley Community Church in its sale of the Barnes Road property to HBC Aurora LLC): “It was Orchard Valley’s understanding that it was selling 101 S. Barnes Road to Harvest Bible Chapel.” Whitt added that Harvest Bible Chapel directed that the Barnes Road property be conveyed to “its nominee”—HBC Aurora LLC. “Neither Orchard Valley nor this office has any direct knowledge whether Harvest Bible Chapel Aurora LLC is a not-for-profit corporation,” Whitt said.
HBC Aurora LLC’s exemption application also included misleading letters to the city of Aurora, the Aurora Fire Department, Kane County Board, and several school districts in which the HBC Aurora LLC property was located. Each of these letters stated, “The Aurora campus of Harvest Bible Chapel (“Harvest”) is seeking tax exempt status for its newly acquired building . . .” The Aurora campus of Harvest Bible Chapel is legally the same entity as Harvest Bible Chapel.
All of these letters were written and signed by Craig Steiner, who at the time was the campus pastor of Harvest Bible Chapel Aurora. The letters also reference Chris Nudo, to whom Steiner says questions should be directed. Steiner resigned from Harvest in September amidst a controversy involving his handling of sex abuse allegations. He now serves as Naperville Campus Pastor for Highpoint Church.
I reached out to Steiner for comment, but he did not respond. I also reached out to Nudo, but he did not want to comment on the record.
Steiner also signed an affidavit submitted with the application that claims that Harvest Bible Chapel Aurora LLC is organized to “operate for the advancement of religious, educational and other charitable purposes, and specifically to conduct a Bible Chapel.”
This charitable/religious purpose of the LLC does not appear on either HBC Aurora LLC’s Articles of Organization or the description of the LLC in Harvest Bible Chapel’s financial statement. Instead, the phrase is verbatim from page five of Harvest Bible Chapel’s Articles of Incorporation.
But perhaps the most confusing aspect of the application is that it included documents from Harvest Bible Chapel that were required of the “applicant.” For example, the application requires submission of the “applicant’s bylaws.” But the application didn’t include HBC Aurora LLC’s bylaws; it included Harvest Bible Chapel’s bylaws.
The same thing was done with required audited financial statements and the IL Department of Revenue Exemption Certificate. In both cases, the application included Harvest Bible Chapel’s documents, not its own. The application also included Harvest Bible Chapel’s Articles of Incorporation, as well as the LLC’s articles.
I called and spoke with Sam Salustro, public information officer for the IL Department of Revenue, about HBC Aurora LLC’s exemption. He said the state approved the exemption “based on the information given us” and Kane County’s review and approval.
Salustro said a main criterion the state uses to evaluate exemptions is the intended use of the property and in this case, whether it’s being used for a religious purpose. Salustro also mentioned that his office frequently looks at exempting property tax for LLCs that are holding companies for nonprofits.
However, according to Illinois tax code, a property that is organized to hold a legal title is exempt from property taxes only if it qualifies under paragraph 2 of Section 501 (c) of the Internal Revenue Code (IRC). This portion of IRC states that to be exempt from federal tax, the company holding title to a property must turn over “the entire amount” of its income less expenses to a tax-exempt organization.
When I pointed out that HBC Aurora LLC does not meet this stipulation, Salustro said that once an exemption is issued, it remains unless the county decides to put the property back on the tax roll.
“Alternative Forms of Property Ownership”
One of the people involved in promoting Harvest’s LLC model for acquiring buildings was former Harvest Bible Chapel CFO Fred Adams. Adams is indirectly referenced in a recent financial review of Harvest Bible Chapel that found that former pastor James MacDonald had misused millions of dollars of church funds. According to the review, Harvest’s “former CFO” (Adams) helped control the private accounts that funneled money to MacDonald.
In 2017, Adams left Harvest and created a nonprofit called Church Building Ministry (CBM). This ministry promises to help churches create “alternative forms of property ownership requiring no financing or mortgage.” The ministry sounds like a consulting business, helping churches locate properties, find donors, and oversee construction budgets.
However, according to the ministry’s website, CBM provides its service to “growing Evangelical Churches at no cost” and “all compensation and expenses are covered by donations.” CBM also says it is a 501(c)(3) “organized and operated exclusively for religious, charitable, and educational purposes.”
Interestingly, one of the assumed names for CBM mentioned in its filing with the state is the Evangelical Ordination Council. I searched online and could not find that name anywhere, nor does CBM name ordination as one of its services.
I reached out to Adams, hoping to get more information about his ministry, but he did not respond. I also tried to get a 990 tax return for CBM. But according to GuideStar, CBM doesn’t file an annual return with the IRS “because it is a religious organization.”
English 
Spanish
25 Responses
Does it ever stop? Will it ever end? Why aren’t these frauds and scam artists hunted down and prosecuted? I can’t take it any more. Maybe prayer and Bible study with a few genuine Christian brothers and sisters is enough.
Re: “Why aren’t these frauds and scam artists hunted down and prosecuted?”
Working on it.
Would help if the real insider whistleblowers would honor God and go to the Feds. Maybe they have—hard to tell.
What exactly are “Alternative Forms of Property Ownership”???
“Alternative Forms of Property Ownership”? That’s exactly what these LLCs are. In Harvest’s case they announced from the pulpit, plus put into writing multiple times in 2009, that there would be NO NEW DEBT until the old debt was paid off. It’s not likely that their bank, ECCU, would have financed new expansion anyway. So when Harvest/James decided they wanted to expand despite having too much debt to warrant speculative expansion, they used this loophole to both dupe the flock and provide personal enrichment to the few elite LLC members holding the property.
The rental rates would be controlled by the EC going forward, so they could approve outrageous sums on future lease agreements. HBC1 was the entity funding all of the tenant improvements to the property which inured directly to the benefit of the LLC owners. It was a way for James to use tithes to personally enrich his friends at the top while concealing their identities from the flock. If there was nothing to hide, why not list all of the LLC members?
Correct, Amy.
Effectively, HBC1 is taking a loan from the LLC investors. I’m told the understanding is that the investors would eventually sell the properties back to HBC1. Harvest leaders suppressed criticism of this model by emphasizing how “generous” the investors were. They also “sold” investors on this idea by telling them they were investing int he Kingdom, doing this for God, etc. Giving money/property and purchasing/profiting from it are not synonymous. Per usual, HBC1 was conflating money terms to deflect and confuse.
Congregants should unite and demand the past and current investors’ identities be disclosed.Many sources have said that former Elder Treasurer Jeff Smith was (and/or is) a member of the North Shore LLC. The IRS would have a huge problem with or other investors being on both sides of the rental agreement when it comes to HBC1’s tax-exempt status.
If the Lake and Kane County Boards of Review do the lawful thing, these LLCs likely will be hit with property tax bills and back payments approaching $1M total. In a triple-net lease, the tenant pays the property tax. Not sure what would happen, practically speaking, in such a scenario, but the tenant is HBC the church.
Aurora campus Congregants should also be asking where did that $900,000 from the spring 2016 campaign go? HBC1 put in $330K total to purchase 101 S. Barnes Road. Hmm.
This whole thing is so unbelievably deep in a circular profit scheme! The nerve that James and Kathy would stand up at the front of the church and insist they didn’t get any “cut” of the tithings. How do I go about suing to get my monthly donations back? It was all asked for an taken under false pretenses! CROOKS that give evangelicals a bad name! James said, if you have a “fish” on your car – don’t speed ! LOL !
Plus he has the audacity to keep coming forward fighting that he’s owed!!! The NERVE OF SUCH A CROOK!
Guess he didn’t have a fish on that Raptor. Because he drove like a bat out of heck.
I understand how you feel – but keep saying to yourself “I gave to the Lord”. He stole from the Lord, not you. Wait until the Lord demands what was His.
Thank you Sarah, you’re right! Plus wasn’t mine to begin with.
Mt 7:15-20 says..15.beware of false prophets, who come to you in sheeps clothing but inwardly are ravenous Wolves 16. You will recognize them by their fruits. are grapes gathered from thorn bushes or figs from thistles? 17. So, every healthy tree bears good fruit, and every diseased tree bears bad fruit 18. A healthy tree cannot bear bad fruit, nor can a diseased tree bear good fruit 19. Every tree that does not bear good fruit is cut down and throw into the fire 20. Thus you will recognize them by their fruits…..it looks like alot of bad fruit is coming from MANY of the leadership at Harvest Bible chapel, past and present…..Remember ” a bad tree CANNOT bear good fruit “….the reason a bad tree can’t bear good fruit is because bad trees represent unbelievers….they also come to you in SHEEPS CLOTHING……I shouldn’t be surprised, we’re warned about people like these all through out The Scriptures… but I always am.
I was surprised to see the contact info included at the end of the letter to the North Shore Assessor. I wouldn’t be comfortable with that info being published. Just a thought (not sure if it’s Julie’s upload or Jessica’s).
My apologies. The problem has been corrected.
I hear the heart behind your perspective, but consider that “It’s okay because I gave it to God” and “Harvest really stole from God, so donors need to turn the other cheek” is precisely why Christians are easy targets for theft and fraud. What if you found out that $100 you gave to the PTA or YMCA was misappropriated? Would you say, “It’s okay because my intentions were good”?
We give money to a church out of love and obedience to God, but we give it to PEOPLE to steward and use for God’s work. It should anger and grieve us to find out that money given to and for advancing the Gospel (including meeting the needs of “the least of these”) was instead used to self-enrich. All in the name of the Gospel.
I’m not suggesting that revenge be the order of the day, but Jesus turned over tables in the temple when he saw moneychangers exploiting it.
In Acts 4:32-35, we see an account of believers not simply “giving to God,” (abstract) but giving to one another (concrete). Ananias and Sapphira withheld–and dropped dead. There are and should be earthly consequences for sins with “God’s money”. In fact, I can’t think of an example of someone in Scripture who sinned with money and did NOT suffer an earthly consequence.
James MacDonald & Company will absolutely give an account on Judgement Day. But I submit that the Lord IS demanding what was His from Harvest, MacDonald, Adams, et al right now. Let’s not get in the way (not that we could).
Grateful for Jessica Hockett’s research and for Julie Roys.
I am curious if this information here about shady and questionable real estate activity ever did make the HBC newsletter? I do know that none of my HBC contacts were aware of this real estate activity going on.
Once again, I hear people saying, “Discernment websites are Not needed because HBC conducted our very own investigation…..” …..but yet, why are we NOW discovering this for the first time 10 months after James MacDonald’s exit? It is clear to me that we are learning here for the first time that some individuals were listed as LLC investors and receiving income ( profit ) from a supposedly not-for-profit entity?
So, why did this “questionable activity” not get reported until now?
Remember, when a Church was supposed to be “above reproach”.
At best, this is shady, questionable real estate activity, and possibly illegal.
If it was not for “Discernment websites” , would the Truth ever be exposed and confronted at Harvest Bible Chapel?
And so it continues…
Who would have imagined all of this?
Mark the answer to your question is NO!!!
And so more evidence comes out that this whole thing was never a church but just a Mammon making scam by men without consciences. Why do people have such a hard time calling a spade a spade? Bad trees produce bad fruit because they are bad, period. There is no good that comes out of this directly. The only good is for Christians to pull their heads out of the sand and see that this is not, in any way, shape or form, what Jesus’ actual Church He is building looks like. It never was and it never will be in the future…
You are 100% Right MISTER JESPERSON…..and almost all mega churches do the same thing…….there is a reason all of these SO CALLED PASTORS are MULTI Millionaires…from James McDonald, Greg Laurie, Andy Stanley, Franklin Graham…. even Dave Stone The guy filling in for Jmac now……and the list goes on…..money in the church is like a virus in the human body, it might not kill you but it’s not healthy and usually gets worse.
Was/Is Paxton Singers Father an Aurora Investor?
Where did the Church that sold HBC the Aurora building go with all that cash?
Have they bought a new building?
I see you… I no what you did that summer…
1) I believe Mr Singer indicated that he was willing to talk to the media after the trial was over. If that happens, a reporter should ask him if he or any of his own businesses were or are investors in either Harvest LLC.
2) That church shortened its name to The Orchard Community. The lead pastor started a non-profit in summer 2016 called “Project Canvas”. Church met in rented space until this past November, when they started meeting in a building that I believe Project Canvas purchased (have to check my notes/records) and rehabbed into a cafe and event space called Society 57. The Tribune reported on the project in 2017 and again last month.
Not sure why you blocked me on Twitter, Jessica, but thank you for your advice re Aurora when I reached out to you. VERY appreciated!! Blessings!
PJRF: don’t feel bad.
Jessica blocked me too, and yet I am one of her biggest Fans !!
:-)
Months ago, I was learning how to work this little “thing” called Twitter that I had just signed up for.
I am not the most tech-savy person in the room. ( See…..I just admitted it !! )
:-)
And I reached out to her via DM, and she blocked me.
But PJRF, we both appreciate Jessica’s hard work and good Diligence, and I am a fan of Julie’s too.
:-)
Anyone who was close to HBC circles for the past two decades could smell the stench and rot coming out from so many different realms, but what I like about Hockett and Roys is that they are not content with simply reporting or even simply commenting on the news… they have taken it upon themselves to out self righteous everyone by rolling up their sleeves and making the news that they now report. Well done ladies!
Incorrect. I literally stumbled upon the fact that two for-profit LLCs that effectively gave a debt-ridden church loans & diverting donors funds into secret investors’ pockets were not paying the property taxes they should be paying under IL law. I spoke with and wrote letters to the assessors, and they responded accordingly. There’s no self-righteousness involved, unless you count me paying my taxes and contacting public authorities with concerns and questions self-righteous. I did not need to be named in the article; that was Julie’s choice, likely because it answers the question of how the assessors’ attention was drawn to the omitted property and misleading application.
The ad hominem approach isn’t productive. Why not take issue with the facts and evidence in the situation – or argue that the situation is irrelevant for reasons a, b, c? Review the property law for charitable/religious use and offer your perspective on whether it’s been violated. Explain why, exactly, the North Shore LLC potentially having to pay hundreds of thousands on backtaxes isn’t news. Share your thoughts on the Aurora LLC application, and whether you believe it to be fraudulent.
Are you a resident of Illinois? If so, which county?
Jessica, you did exactly the right thing. The inappropriate nonprofit exemptions are taking money out of the pockets of local taxpayers.
I don’t get the big mystery and struggle for the local assessors to determine whether a property is owned by a nonprofit. I work for a nonprofit and if we buy a property or enter into certain transactions, we have to provide our articles of incorporation, our IRS tax ID and our IRS tax exempt status letter. It’s pretty simple to verify that the entity taking title to a property is exactly the same entity as the nonprofit in question.
As one commenter touched upon, there are legitimate means, detailed in IRS regulations, allowing a non-profit to hold property in a separate entity that does qualify for a property tax exemption. This is sometimes done to protect a non-profit from substantial potential liability. For example, a little league team might have a separate entity that owns the baseball field.