Tax issue could ground Pungo’s vintage warbirds

Posted at 6:27 PM, Jun 23, 2014
and last updated 2014-06-23 18:27:46-04

A request for a tax exemption for a private collection of rare airplanes has stirred controversy in Virginia Beach City Hall and in the quiet Pungo neighborhoods where the collection is displayed.

City Council will revisit the issue next week. The Council delayed a vote after hearing from several Pungo neighbors who did not support the request from businessman Gerald Yagen and his Military Aviation Museum.

At issue is an odd arrangement where Yagen's privately owned collection of historic airplanes is displayed in his non-profit aviation museum. He said because he leases his collection to the museum, he did not think the airplanes were taxable.

"I have never received a bill," he said.

Virginia Beach Commissioner of Revenue Phil Kellam said that was an oversight. He is consulting with experts to assess the aircraft, including some rare and historic fighters. Even if the City Council exempts the collection, Kellam said he could still seek back taxes for the years prior.

And at the Council meeting when this was first proposed, several Pungo neighbors opposed Yagen's request. Some said the millionaire businessman who also owns for-profit colleges and trade schools was financing an expensive hobby on the backs of taxpayers. Others said the vintage airplanes buzz too close to their homes, and they worry a tax exemption would allow more flights.

Yagen says he's kept the non-profit museum afloat with millions of his own money. He says if he doesn't get the tax exemption, and is also hit with back taxes, that will be hard to absorb.

"I’ll have to come up with the money somehow to pay for it," he said.  "Eventually, if it gets too difficult, I’ll have to think of other things. But I hope not. I hope this museum stays in our community for a long, long time."