Blog 3 Two Fairhopes
Blog 3: Two Fairhopes.
On November 15, 1894 a group headed south to what would become Fairhope, AL They were full of hopes and dreams of a better world, a more fair economic system.
When they arrived in Baldwin County, other people were living here and owned the land. FSTC had to buy land for their colony. They did not have a lot of money, and some people did not want to sell their land. Other people came to the area who did not want to be lessees, and bought land. So the land of the Colony is scattered about from downtown to Highway 181, with gaps here and there. It is not one contiguous area. Lessees lived (and still do) next to people who owned their own land.
It was originally intended that all lessees would be members of the Colony, but it was very expensive. Many could not afford to become a member. The Colony desperately needed to lease the land. There was already property tax in Alabama and the Colony was not exempt. They had the burden to pay the taxes on the unleased land and the same time they were trying to build the necessary infrastructure to make the town work. The Colony quickly agreed to lease to people who were not members.
The FSTC Constitution says that "There shall be no individual ownership of land within the jurisdiction of the Corporation, but the Corporation shall hold as trustee for its entire membership, title to all lands upon which its community shall be maintained." From the start they could not create a contiguous community. Rents were being used for community improvements that non-lessees got the benefit of without paying rent, as well as paying the property taxes on the unleased lands of FSTC. Many lessees were resentful.
On November 15, 1894 a group headed south to what would become Fairhope, AL They were full of hopes and dreams of a better world, a more fair economic system.
When they arrived in Baldwin County, other people were living here and owned the land. FSTC had to buy land for their colony. They did not have a lot of money, and some people did not want to sell their land. Other people came to the area who did not want to be lessees, and bought land. So the land of the Colony is scattered about from downtown to Highway 181, with gaps here and there. It is not one contiguous area. Lessees lived (and still do) next to people who owned their own land.
It was originally intended that all lessees would be members of the Colony, but it was very expensive. Many could not afford to become a member. The Colony desperately needed to lease the land. There was already property tax in Alabama and the Colony was not exempt. They had the burden to pay the taxes on the unleased land and the same time they were trying to build the necessary infrastructure to make the town work. The Colony quickly agreed to lease to people who were not members.
The FSTC Constitution says that "There shall be no individual ownership of land within the jurisdiction of the Corporation, but the Corporation shall hold as trustee for its entire membership, title to all lands upon which its community shall be maintained." From the start they could not create a contiguous community. Rents were being used for community improvements that non-lessees got the benefit of without paying rent, as well as paying the property taxes on the unleased lands of FSTC. Many lessees were resentful.
Ten years after arriving in Fairhope, the Colony incorporated in the state of Alabama as a Single-tax and other Mutual Economic Association."
(Title
10A Alabama Business and Non-Profits EntitiesCode, Chapter 20 Special Purpose
Entities, Article 9: Single-tax and other Mutual Economic Associations.)
To see the Code of Alabama section relating to FSTC:
To see the Code of Alabama section relating to FSTC:
Just 4 years after FSTC was incorporated in Alabama, the City of Fairhope was formed. FSTC had failed to provide the things necessary for a community to thrive, so a City with the ability to tax was needed. Those lessees tired of their rents supporting the other people in the area who did not pay the rents, wanted a City to form, as well as other citizens who wanted the infrastructure in place faster than the Colony could provide.
Since 1908 there has been a City of Fairhope and the Fairhope Single Tax Corporation. Since Colony land is spread out from downtown to out on Highway 181, many lessees fell within the City limits of Fairhope, and many others did not. So some were paying city taxes in addition to rent, and others were not.
The existence of the FSTC and the City of Fairhope and their connection is confusing to many people. The two entities, while sometimes cooperating with each other, are entirely separate. FSTC is not a government, but a land rental company whose lease agreement states that all value from the land goes into a trust for the benefit of the lessees. The City has taxation powers to pay for the needs of the City. A City does not have to pay property taxes on its property; the FSTC does.
The FSTC had reserved much of the bay front land for the enjoyment of all. (The stretch from Pier Street all the way to the VFW is not one the FSTC reserved, but was created because of City efforts.)
During the depression FSTC owned a lot of land that was not yet leased and they had to pay the taxes on that. They had to pay taxes on the parks they had created. Many of their lessees were struggling to pay their rent. It was at this time that FSTC gave the parks to the City, alleviating the burden of paying the taxes on the parks and maintaining them. The parks are a great asset to the City of Fairhope. The City of Fairhope has done a great job in maintaining them.
As Paul Gaston wrote, "Since 1908, when the municipality was created, there have been two Fairhopes...the 'colony' people living on single-tax colony land and supposedly taking part in the Goergist principles, and the non-colony people, living on privately owed land" who basically have no connection with FSTC. The City of Fairhope (and state and county and school board, etc) levy taxes on all the people living in Fairhope, including those on Colony land. The rent the Colony lessees pay therefore became an "extra tax" instead of a single tax. Many resent that they must pay more than their next door neighbor. A lessee farmer on 181 pays FSTC close to $3000 more than his next door neighbor who is not a lessee. That cost is added to his production cost. Henry George did not believe in taxing production.
Today we have two Fairhopes. The 20% who live on Colony land and pay an "extra tax" and the other 80% who do not.
For a map of how the Colony and the City of Fairhope and the Fairhope Community fit together, here is a map from TheFairhopeCourier.com as provided by Jesse Patterson.
Yellow: Fairhope City Limits
Green: Colony (FSTC) within city limits
Blue: Colony (FSTC) lands outside the city limits
White: Fairhope Community and it extends over a broader area than is shown on this map.
Since 1908 there has been a City of Fairhope and the Fairhope Single Tax Corporation. Since Colony land is spread out from downtown to out on Highway 181, many lessees fell within the City limits of Fairhope, and many others did not. So some were paying city taxes in addition to rent, and others were not.
The existence of the FSTC and the City of Fairhope and their connection is confusing to many people. The two entities, while sometimes cooperating with each other, are entirely separate. FSTC is not a government, but a land rental company whose lease agreement states that all value from the land goes into a trust for the benefit of the lessees. The City has taxation powers to pay for the needs of the City. A City does not have to pay property taxes on its property; the FSTC does.
The FSTC had reserved much of the bay front land for the enjoyment of all. (The stretch from Pier Street all the way to the VFW is not one the FSTC reserved, but was created because of City efforts.)
During the depression FSTC owned a lot of land that was not yet leased and they had to pay the taxes on that. They had to pay taxes on the parks they had created. Many of their lessees were struggling to pay their rent. It was at this time that FSTC gave the parks to the City, alleviating the burden of paying the taxes on the parks and maintaining them. The parks are a great asset to the City of Fairhope. The City of Fairhope has done a great job in maintaining them.
As Paul Gaston wrote, "Since 1908, when the municipality was created, there have been two Fairhopes...the 'colony' people living on single-tax colony land and supposedly taking part in the Goergist principles, and the non-colony people, living on privately owed land" who basically have no connection with FSTC. The City of Fairhope (and state and county and school board, etc) levy taxes on all the people living in Fairhope, including those on Colony land. The rent the Colony lessees pay therefore became an "extra tax" instead of a single tax. Many resent that they must pay more than their next door neighbor. A lessee farmer on 181 pays FSTC close to $3000 more than his next door neighbor who is not a lessee. That cost is added to his production cost. Henry George did not believe in taxing production.
Today we have two Fairhopes. The 20% who live on Colony land and pay an "extra tax" and the other 80% who do not.
For a map of how the Colony and the City of Fairhope and the Fairhope Community fit together, here is a map from TheFairhopeCourier.com as provided by Jesse Patterson.
Yellow: Fairhope City Limits
Green: Colony (FSTC) within city limits
Blue: Colony (FSTC) lands outside the city limits
White: Fairhope Community and it extends over a broader area than is shown on this map.
posted by Pauline @ 11:43 AM
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