The opinion
[This opinion has been published in Ohio Official Reports at 74 Ohio St.3d 651.]
MELLON BANK, NA, TRUSTEE, APPELLANT, v. FRANKLIN COUNTY BOARD OF
REVISION ET AL., APPELLEES.
[Cite as Mellon Bank, N.A. v. Franklin Cty. Bd. of Revision, 1996-Ohio-229.]
Taxation—Real property valuation—Board of revision’s dismissal of complaint
seeking reduction in taxable value of property reasonable and lawful when
complaint violates R.C. 5715.19(A)(2).
(No. 95-80—Submitted October 26, 1995—Decided March 1, 1996.)
APPEAL from the Board of Tax Appeals, No. 93-B-1157.
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{¶ 1} On March 31, 1992, appellant, Mellon Bank, NA, Trustee (“Mellon
Bank”), filed a complaint for tax year 1991 with the Franklin County Board of
Revision (“BOR”) seeking a reduction in the taxable value of two parcels of
property (Nos. 610-199537 and 610-201408) located in the Columbus-Worthington
City School District. The property, known as Three Crosswoods Center, is a low-
rise office building consisting of approximately 115,238 leasable square feet of
office space, situated on 6.028 acres of land.
{¶ 2} Mellon Bank previously had filed complaints with the BOR regarding
the same property for tax years 1989 and 1990. For tax year 1989, the BOR adopted
a stipulated fair market value for the property of $11,100,000. For tax year 1990,
the BOR adopted the same value for the property as it had for 1989. No appeal was
taken from the 1990 BOR decision.
{¶ 3} Mellon Bank’s complaint for tax year 1991 alleged that the fair
market value of the property was $9,200,000. The Worthington City School
District Board of Education (“Worthington”) filed a countercomplaint alleging that
the fair market value of the property should remain at the assessed value of
$11,100,000.
SUPREME COURT OF OHIO
{¶ 4} For Franklin County, tax year 1990 was the first year of the triennial
interim period. At the BOR, Worthington contended that the complaint filed by
Mellon Bank for tax year 1991 violated R.C. 5715.19(A)(2), because it was the
second complaint filed in the interim period, and consequently, should be
dismissed. The BOR dismissed Mellon’s complaint, finding that it violated R.C.
5715.19 (A)(2).
{¶ 5} The BOR found that, during all the relevant time periods, the property
in question was fully occupied by Nationwide Mutual Insurance Company
(“Nationwide”). On or about July 31, 1991, Nationwide and Mellon Bank entered
into an amendment of their lease which extended the term for forty-six months,
thereby changing the lease expiration date from September 30, 1992 to July
31,1996. In addition the base rental under the lease was reduced from $12.75 per
square foot to $6.75 per square foot for the period August 1, 1991 to July 31, 1992;
then increased to $8.75 per square foot for the period August 1, 1991 to July 31,
1995; and finally, increased to $10.75 per square foot for the period August 1, 1995
to July 31, 1996.
{¶ 6} The Board of Tax Appeals (“BTA”) affirmed the BOR’s dismissal of
Mellon Bank’s complaint.
{¶ 7} This cause is now before the court upon an appeal as of right.
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Wayne E. Petkovic, for appellant.
Michael Miller, Franklin County Prosecuting Attorney, and James R.
Gorry, Assistant County Prosecuting Attorney, for appellees Franklin County
Auditor and Franklin County Board of Revision.
Baker & Hostetler and George H. Boerger, for appellee Worthington City
School District Board of Education.
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January Term, 1996
Per Curiam.
{¶ 8} R.C. 5715.19(A)(2), provides:
“As used in division (A)(2) of this section, ‘interim period’ means, for each
county, the tax year to which section 5715.24 of the Revised Code applies and each
subsequent tax year until the tax year in which that section applies again.
“No person, board, or officer shall file a complaint against the valuation or
assessment of any parcel that appears on the tax list if it filed a complaint against
the valuation or assessment of that parcel for any prior tax year in the same interim
period, unless the person, board, or officer alleges that the valuation or assessment
should be changed due to one or more of the following circumstances that occurred
after the tax lien date for the tax year for which the prior complaint was filed and
that the circumstances were not taken into consideration with respect to the prior
complaint:
“(a) The property was sold in an arm’s length transaction, as described in
section 5713.03 of the Revised Code;
“(b) The property lost value due to some casualty;
“(c) Substantial improvement was added to the property;
“(d) An increase or decrease of at least fifteen percent in the property’s
occupancy has had a substantial economic impact on the property.” (Emphasis
added.)
{¶ 9} It is undisputed that, by filing for both tax years 1990 and 1991,
Mellon Bank filed two complaints in the same interim period. Mellon Bank
contends that R.C. 5715.19(A)(2)(d) applies to this case because the lease
amendment that it entered into with Nationwide created a new “occupancy,” and
the lease rental received under the amended lease will result in a reduction in rental
income of more than fifteen percent. We disagree.
{¶ 10} The sole occupant of the entire property, both before and after the
amendment, was Nationwide. The only changes that occurred as a result of the
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SUPREME COURT OF OHIO
amendment were an extension of the term of the lease and a reduction in the rental
payments made to Mellon. Nevertheless, Mellon Bank contends that “the execution
of a new lease must necessarily involve the creation of a new tenancy and,
concomitantly, a new occupancy.”
{¶ 11} A reading of R.C. 5715.19(A)(2)(d) shows that there are two
elements which must be satisfied for it to be applicable. First, there must have been
“an increase or decrease of at least fifteen percent in the property’s occupancy,”
and second, that increase or decrease in the property’s occupancy must have “had
a substantial economic impact on the property.” (Emphasis added.) Although the
term “occupancy” is used numerous times throughout the Revised Code, it is only
defined in R.C. 5722.01(F) which states:
“‘Occupancy’” means the actual, continuous, and exclusive use and
possession of a parcel by a person having a lawful right to such use and possession.”
{¶ 12} The statutory definition of “occupancy” set forth in R. C. 5722.01(F)
comports with that found in Black’s Law Dictionary (6 Ed. 1990) 1078, which
states that “occupancy” is:
“Taking possession of property and use of the same; said e.g. of a tenant’s
use of leased premises. Period during which person owns, rents, and otherwise
occupies real property or premises. ***”
{¶ 13} The relevant criteria used in the above definitions of “occupancy”
are “use” and “possession.” For leased property, an increase or decrease in
occupancy is measured by how much of the property is used and possessed by the
tenants. For example, if one tenant possesses the entire property and later the entire
property is occupied by five tenants, the occupancy of the property has not
increased or decreased, only the number of occupants has changed. Furthermore,
the rent received for a property does not measure the amount of use and possession
of the property.
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January Term, 1996
{¶ 14} In this case the amendment of the lease did not increase or decrease
the amount of square footage occupied by Nationwide. Therefore, there was no
change in the property’s occupancy and R.C. 5715.19(A)(2)(d) was not applicable
to Mellon Bank’s second complaint filed in the same interim period.
{¶ 15} We affirm the decision of the BTA, dismissing the complaint, as
being reasonable and lawful.
Decision affirmed.
MOYER, C.J., DOUGLAS, WRIGHT, RESNICK, F.E. SWEENEY, PFEIFER and
COOK, JJ., concur.
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