The District of Columbia is locked in a nearly two-year court battle against the student-run GW Hatchet at The George Washington University over a disputed property tax bill of $17,000, threatening the financial status of the second-oldest newspaper in the city.
In March 2015, the nonprofit real estate arm of The Hatchet sued the city in D.C. Superior Court, arguing that a request for a property tax exemption had been wrongfully denied. The 112-year-old Hatchet purchased a Foggy Bottom townhouse in 2013 to become financially independent from the university, which had rented the newspaper office space for years.
The $950,000 townhouse came with a property tax bill of about $8,500 a year. In 2015, however, the bill shot up to about $16,000 annually, a MediaFile review of city records show.
Home for the Hatchet – the nonprofit created to oversee the newspaper’s real estate dealings – sought a property tax exemption from the city, saying the nonprofit should not have to pay because it qualifies as an educational organization, according to court records.
Under D.C. law, schools, colleges and universities are exempt from property taxes. A Washington Post story in August reported that D.C. universities had avoided $111 million in property taxes last year. George Washington had avoided $39 million.
Steve Roberts, a George Washington University journalism professor and a board member of Hatchet Publications, which oversees the newspaper’s daily operations, said The Hatchet should qualify for the tax break because the newspaper is a vital educational tool for student journalists.
“I have personally consulted with the lawyers,” Roberts said. “While I’m not a legal expert, there is no question in my mind that their argument is good – that The Hatchet is very much a legitimate educational organization.”
But in court documents, the District – which collected more than $2 billion in property taxes in 2015 – argues that neither the The Hatchet nor its real estate arm qualify as educational organizations under D.C. law. The city also argues that The Hatchet’s townhouse is zoned as a “private club” and not as a school.
The deed, above, outlines the terms of the sale, and the
$1.25 million loan The Hatchet received from Eagle Bank.
“[Home for the Hatchet] and Hatchet Publications are separate entities, both legally and factually, and there is no authority for attributing the activities of one to the other for real property tax exemption purposes,” the D.C. Attorney General’s office wrote in court documents in January. “Since [Home for the Hatchet] does not contend that it constitutes a school embracing the generally recognized relationship of teacher and student, the property in issue cannot qualify for exemption, regardless of how it is used.”
The Attorney General’s Office declined to comment, citing pending litigation. Kenneth Chaletzky, president of Home for the Hatchet and a Hatchet alumnus, did not respond to repeated requests for comment. A lawyer representing Home for the Hatchet also did not respond to a request for comment.
The Hatchet is one of a small number of college news organizations fully independent of the university they cover. The second-oldest newspaper in town behind The Washington Post, The Hatchet has long brought accountability to the George Washington community. Over the years, The Hatchet has reported on a number of university scandals, including misrepresentation of financial aid policies and inaccuracies in academic rankings data.
Like media outlets nationwide, The Hatchet has fallen on hard times. National advertising revenue, including classifieds, has dramatically declined across the industry. Independent student news organizations, such as The Hatchet, have been hit hard since they do not accept money from the universities they cover. In 2013, The Hatchet cut back from a twice-weekly to a once-weekly print edition.
In order to buy the F St. townhouse, Home for the Hatchet took on a $1.25 million loan from Eagle Bank in Bethesda in 2013, which covered the purchase price and construction costs for renovation, real estate records show. The goal was to gain independence and to start down a path of financial sustainability, Hatchet officials said at the time.
“The Hatchet, like every strong student newspaper, is a vital and vibrant part of the campus experience,” said Frank Sesno, director of The George Washington University School of Media and Public Affairs. “This is where journalism is learned, nurtured and serves as the connective tissue for the entire campus community. From stories that get to the heart of campus accountability to profile pieces of astonishing scholars and campus sports, we all benefit from responsible and creative reporting.”
If the lawsuit is successful, the judge could award The Hatchet nearly $50,000 in back taxes for the four years it has owned the townhouse.
A Struggling Student Newspaper
The Hatchet was once a student group on campus but cut ties from the university in 1993. The nonprofit Hatchet Publications, Inc. was created to oversee the newspaper’s daily operations.
The newspaper’s independence was “the most important event in the Hatchet’s history,” Becky Sher, a former editor and current board member, wrote in a 2004 centennial anthology about The Hatchet.
The next step was moving to a new home.
The Hatchet created a second nonprofit in 2011, this one called Home for the Hatchet, which would be run by Hatchet alumnus Chaletzky. According to Home for the Hatchet’s website, the mission was to “protect the independence of student journalism at GWU by providing rent-free, mortgage-free office space to The Hatchet.”
According to a 2013 Hatchet article, Home for the Hatchet would try to raise $2 million to finance the effort. The plan offered naming opportunities for the townhouse and its many rooms.
According to an August 2013 article in The Washington City Paper, Chaletzky said the nonprofit had raised $400,000 total.
Chaletzky did not respond to numerous requests for comment on how much was raised and how the nonprofit is covering a $1.25 million loan. Jared Sher and Debra Leithauser, both listed on public records as Home for the Hatchet board members as of 2014, could not be reached for comment. Leithauser, president and publisher of The Idaho Statesman, is no longer a board member, according to her assistant. Emails to several Hatchet Publications board members went unanswered.
In 2014, the most recent year available, Home for the Hatchet reported less than $260,000 in net assets, according to tax filings. In 2013, Hatchet Publications reported about $170,000.
When asked about the newspaper’s financial and real estate dealings, Hatchet editor in chief Ellie Smith responded by email.
“Like all media companies, Hatchet Publications is responding to changes in how media is created and consumed,” wrote Smith, a junior at George Washington, who also serves as the president of Hatchet Publications. “We are exploring all options to ensure The GW Hatchet continues to provide news and information for the GW community and as an award-winning training ground for students.”
Sesno, a former CNN anchor, White House correspondent and Washington bureau chief, said he believes The Hatchet is an essential part of the university community and wants to see the newspaper continue to thrive.
“This is . . . where the great journalists of the future are forged,” said Sesno. “Pure and simple, the Hatchet is a pillar of The George Washington University.”
Roberts, a syndicated columnist and a former New York Times White House correspondent, called The Hatchet an “invaluable asset” to the university.
“A top-flight university like ours cannot flourish without a good student paper,” said Roberts. “GW needs The Hatchet to be strong, solvent and fearless.”
Photography by Aly Kruse, MediaFile staff photographer.