Anderson/Maltbie Partnership v. Levin

[Cite as Anderson/Maltbie Partnership v. Levin, 127 Ohio St.3d 178, 2010-Ohio-4904.]

ANDERSON/MALTBIE PARTNERSHIP ET AL., APPELLEES, v. LEVIN,

TAX COMMR., APPELLANT.

[Cite as Anderson/Maltbie Partnership v. Levin,

127 Ohio St.3d 178, 2010-Ohio-4904.]

Real property tax — R.C. 5709.07 — Property cannot be exempted from taxation

as a public schoolhouse when the owner leases the property to the school

for profit.

(No. 2009-1671 — Submitted May 25, 2010 — Decided October 12, 2010.)

APPEAL from the Board of Tax Appeals, No. 2007-A-11.

__________________

SYLLABUS OF THE COURT

Property cannot be exempted from taxation as a public schoolhouse when the

owner leases the property to the school for profit. (R.C. 5709.07(A)(1),

construed.)

__________________

LANZINGER, J.

{¶ 1} This is an appeal from a decision of the Board of Tax Appeals

(“BTA”) concerning a real property tax exemption. Appellee Anderson/Maltbie

Partnership (“AMP”) is a for-profit entity that leases property to an Ohio

community school. Appellee LKH Victory Corporation is a nonprofit entity that

runs the school under the name Cincinnati College Preparatory Academy

(“CCPA”). AMP and CCPA sought to exempt the parcel under R.C.

5709.07(A)(1), the “public-schoolhouse exemption.” The Tax Commissioner

denied the exemption because of the for-profit nature of the lease, but the BTA

reversed. Applying its analysis from the earlier case Performing Arts of Metro.

Toledo, Inc. v. Wilkins (Dec. 20, 2002), BTA No. 2001-J-977, reversed on other

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grounds, 104 Ohio St.3d 284, 2004-Ohio-6389, 819 N.E.2d 649, the BTA held

that the property was entitled to a tax exemption based on the lessee’s nonprofit

use of the property as a public school.1

{¶ 2} The Tax Commissioner appealed, and we now reverse.

Facts

{¶ 3} On December 30, 2002, AMP and CCPA jointly filed their

exemption application, which sought to exempt the property for tax year 2002 and

to obtain remission of taxes for tax years 1999, 2000, and 2001. The application

cited R.C. 5709.07(A)(1) as the basis for exemption and explained its claim as

follows:

{¶ 4} “[CCPA] is a public community school established under the

authority of O.R.C. Chapter 3314, and was incorporated as an Ohio non-profit

corporation on December 14, 1998. [CCPA] was incorporated for educational

purposes and operates as a community school. As an entity organized for

educational purposes, [CCPA] has applied for and received Internal Revenue

Code §501(c)(3) tax-exempt status from the Internal Revenue Service as a public

charity. * * * In accordance with O.R.C. §3314.02, [CCPA] entered into a

charter contract with the State of Ohio Department of Education in 1999, which

formally established [CCPA] as a public community school under Ohio law.”

{¶ 5} At the BTA, the parties agreed to a set of stipulations based upon

the documents in the record. The stipulations included the following:

{¶ 6} ● Since its inception in 1998, CCPA has operated as a

community school for children in kindergarten through eighth grade.

1. The BTA granted the exemption in Performing Arts, but on appeal, this court reversed on other

grounds, holding that the exemption application had to be dismissed for lack of jurisdiction

because the lessee, but not the owner, had applied. Performing Arts, 104 Ohio St.3d 284, 2004-

Ohio-6389, 819 N.E.2d 649, ¶ 13, 15, 20. Consistent with the holding of Performing Arts, only

AMP as owner had standing to file the application in this case, and this opinion will usually refer

to the appellants collectively as “AMP.”

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January Term, 2010

{¶ 7} ● On July 28, 1999, CCPA entered into a triple-net lease with

AMP as lessor, and occupied the property under that lease and its amendments

from October 7, 1999 through October 6, 2004.

{¶ 8} ● AMP had purchased the property leased by CCPA in 1987

for $1,325,000.

{¶ 9} ● The monthly rental for the leased property was $22,958.04.

{¶ 10} ● CCPA is contractually obligated under the triple-net lease to

pay all real estate taxes and assessments during the lease term.

{¶ 11} ● AMP did not conduct any business at the property during the

lease term, other than leasing it to CCPA.

{¶ 12} For its part, AMP stipulated that it was an “entity of two or more

persons to carry on as co-owners a business for profit pursuant to O.R.C. §

1775.05(A),” i.e., a for-profit partnership.

Analysis

{¶ 13} This case presents a significant issue that arises in the context of

Ohio’s community schools. By statute, a community school “is a public school,

independent of any school district, and is part of the state’s program of

education.” R.C. 3314.01(B); see State ex rel. Ohio Congress of Parents &

Teachers v. State Bd. of Edn., 111 Ohio St.3d 568, 2006-Ohio-5512, 857 N.E.2d

1148, ¶ 7 (detailing aspects of community schools). Since 1852, Ohio law has

provided the exemption for “public schoolhouses” that is currently codified at

R.C. 5709.07(A)(1). 50 Ohio Laws 135, 137. The exemption has been applied to

public and private property: to public schools owned and operated by the public

school districts in Ohio, and to nonprofit private and parochial schools operated

for the public benefit.

{¶ 14} Typically, public school districts own their own school buildings;

but as a community school, CCPA is not owned and operated by any school

district. Community schools raise novel issues of exemption because, by statute,

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they qualify as public schools but often operate on privately owned property. And

in this case, the school occupies the property under a commercial, for-profit lease.

{¶ 15} The Tax Commissioner in his final determination held that

although community schools are public schools, the fact that the property is

privately owned and is leased to the school under a for-profit lease makes the

property ineligible for the exemption. Because we conclude that the

commissioner’s determination reflects a proper application of the standard for

exemption that we articulated in Gerke v. Purcell (1874), 25 Ohio St. 229,

paragraph eight of the syllabus, we reverse the decision of the BTA and reinstate

the commissioner’s denial of the exemption.

Property leased to a school under a for-profit lease is not exempt as a

“public schoolhouse,” because private property can qualify for

the exemption only if it is used “without any view to profit”

{¶ 16} When a property owner applies for an exemption, we consider an

overarching principle. Because laws that exempt property from tax are in

derogation of equal rights, they must be strictly construed. First Baptist Church

of Milford v. Wilkins, 110 Ohio St.3d 496, 2006-Ohio-4966, 854 N.E.2d 494, ¶

10; Campus Bus Serv. v. Zaino, 98 Ohio St.3d 463, 2003-Ohio-1915, 786 N.E.2d

889, ¶ 8. The principle of strict construction requires that the statute’s language

be construed against the exemption, meaning that the onus is on the taxpayer to

show that the language of the statute “clearly express[es] the exemption” in

relation to the facts of the claim. Ares, Inc. v. Limbach (1990), 51 Ohio St.3d

102, 104, 554 N.E.2d 1310; Lakefront Lines, Inc. v. Tracy (1996), 75 Ohio St.3d

627, 629, 665 N.E.2d 662; H.R. Options, Inc. v. Wilkins, 102 Ohio St.3d 1214,

2004-Ohio-2085, 807 N.E.2d 363, ¶ 2; In re Estate of Roberts (2002), 94 Ohio

St.3d 311, 314, 762 N.E.2d 1001. The fact that the burden is on the taxpayer

means that “ ‘[i]n all doubtful cases exemption is denied.’ ” A. Schulman, Inc. v.

Levin, 116 Ohio St.3d 105, 2007-Ohio-5585, 876 N.E.2d 928, ¶ 7, quoting

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January Term, 2010

Youngstown Metro. Hous. Auth. v. Evatt (1944), 143 Ohio St. 268, 273, 28 O.O.

163, 55 N.E.2d 122.

{¶ 17} The statute we must consider is currently codified at R.C.

5709.07(A)(1) and provides: “The following property shall be exempt from

taxation: (1) Public schoolhouses, the books and furniture in them, and the

ground attached to them necessary for the proper occupancy, use, and enjoyment

of the schoolhouses, and not leased or otherwise used with a view to profit.”

{¶ 18} The public-schoolhouse exemption was enacted along with other

exemptions in the wake of the adoption of the new constitution in 1851. 50 Ohio

Laws 135, 137. Before the adoption of the 1851 Constitution, “the whole matter

of taxation was committed to the discretion of the general assembly.” Zanesville

v. Richards (1855), 5 Ohio St. 589, 592. And the “right to make exceptions and

exemptions was unquestionable.” Id. But the 1851 Constitution circumscribed

that power through Article XII, Section 2, which required uniform taxation of

property and enumerated specific types of exemption the legislature could pass.

Id. The legislature’s power to pass exemptions was construed to be limited to

exemptions expressly authorized by the Constitution. Id. at 592-593; Denison

Univ. v. Bd. of Tax Appeals (1965), 2 Ohio St.2d 17, 24, 31 O.O.2d 10, 205

N.E.2d 896. 2

{¶ 19} This court in Gerke, 25 Ohio St. 229, considered the claimed tax

exemption of Catholic parochial schools in view of the specific constitutional

authorizations and the statutory language of the exemptions. We determined that

the Constitution’s authorization of a public-schoolhouse exemption was

applicable only to school buildings that “belong to the public,” buildings that “are

designed for the school established and conducted under the authority of the

2. In 1931, an amendment restored to the General Assembly the plenary power to enact

exemptions: the power is limited only by the provisions of Article I of the Constitution. See

Denison Univ., paragraph three of the syllabus; Dayton v. Cloud (1972), 30 Ohio St.2d 295, 59

O.O.2d 370, 285 N.E.2d 42, paragraph one of the syllabus.

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public.” Id. at 242. In contrast, we held that the statute’s reference to public

schoolhouses is “not used in the sense of ownership” but rather of the “uses to

which the property is devoted,” with the result that the exemption applies to

private property used to support instruction that is “for the benefit of the public.”

Id. at 246-247.

{¶ 20} The term “public” was construed differently in the statute to make

sense of the statute’s limitation that the schoolhouse grounds must not be “leased

or otherwise used with a view to profit.” Because political subdivisions such as

public school districts are inherently nonprofit, the condition did not seem

“appropriate if intended to apply only to institutions established by the public.”

Id. at 247. On the other hand, the prohibition against making a profit had

“marked significance when applied to private property,” and accordingly, the

statute was construed to reach private property. Id. The constitutional basis for

exempting private property when used as a school lay in the authorization of

exemptions for “institutions of purely public charity.” Id. at 243-244. As a result,

the “exclusion of all idea of private gain or profit” constitutes a basic condition

that private property must satisfy to qualify for this exemption. Id. at 247.

{¶ 21} One dispute between the parties is therefore immaterial: the

question whether R.C. 5709.07’s limiting clause “not leased or otherwise used

with a view to profit” applies to the schoolhouse itself as well as the “ground

attached to” the schoolhouse. Ultimately, the dispute is inconsequential because

the holding of Gerke clearly establishes that the schoolhouse itself cannot qualify

for exemption unless it is used “without any view to profit.” Gerke, 25 Ohio St.

229, paragraph eight of the syllabus.

{¶ 22} Gerke holds that the public-schoolhouse exemption does extend to

privately owned property, but only when that property is “appropriated to the

support of education for the benefit of the public without any view to profit,” an

essential element being the “exclusion of all idea of private gain or profit.” Gerke

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at 247. By seeking to exempt a commercial office building that is leased to the

school for profit, AMP seeks a broader exemption, an application that we reject.

{¶ 23} The Tax Commissioner’s final determination did not cite Gerke,

but he did deny AMP’s exemption because the property was subject to a for-profit

commercial lease. We hold this analysis to be correct under Gerke: property

cannot be exempted from taxation as a public schoolhouse when the owner leases

the property to the school for profit.3

Cleveland State Univ. v. Perk does not authorize the grant of a

public-schoolhouse exemption when land with permanent structures

is leased to a school for profit under a commercial lease

{¶ 24} Both the BTA decision and AMP’s brief heavily rely on Cleveland

State Univ. v. Perk (1971), 26 Ohio St.2d 1, 55 O.O.2d 1, 268 N.E.2d 577.

Cleveland State is inapposite for two reasons. First, Cleveland State involved

temporary modular structures installed on the university’s land. Both the

reasoning and the syllabus law of that case restrict Cleveland State’s holding to

that particular situation. Second, although the public-college exemption in R.C.

5709.07(A)(4) generally parallels the public-schoolhouse exemption at R.C.

5709.07(A)(1), the former expressly authorizes a broader exemption of

“buildings” so long as they are “connected with” the public college.

3. Although he did not properly raise the alternative argument, the Tax Commissioner cites cases

that allegedly overrule Gerke’s holding that a schoolhouse could be “public” even though

privately owned. We disagree. The later cases the Tax Commissioner cites in this regard do not

undermine Gerke. See Weir v. Day (1878), 35 Ohio St. 143 (granting injunction against private

school’s use of a public school building under a lease given the circumstances of the case; this

case does not address any issue of taxation or exemption); Gilmour v. Pelton (1877), 5 Ohio

Dec.Rep. 447 (although common pleas court exempted parochial schools based on a charitable

exemption rather than the public-schoolhouse exemption, according to the unofficial reporter’s

note on the history of the case in Ohio Decisions Reprint, the Supreme Court’s affirmance cited

and did not retreat from Gerke); Watterson v. Halliday (1907), 77 Ohio St. 150, 82 N.E. 962

(holding that parish houses used as residences by priests did not qualify for a charitable exemption

or an exemption for a house of worship; this case does not address the schoolhouse exemption).

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{¶ 25} In Cleveland State, the university (an instrumentality of the state of

Ohio) enjoyed the exemption of a parcel of land under R.C. 5709.08, which

exempts “public property used exclusively for a public purpose.” Not having the

wherewithal to construct permanent buildings on the site, Cleveland State

University rented temporary modular buildings that were installed at the site and

used for classrooms and faculty offices. The narrow question was whether the

modular buildings could qualify for exemption from real property taxation under

the public-college exemption.

{¶ 26} In answering affirmatively, we noted two significant predicates for

granting the exemption. First, this court had rejected the proposition that college

buildings were required to be used for “charitable purposes” to qualify for

exemption. Cleveland State, 26 Ohio St.2d at 6, 55 O.O.2d 1, 268 N.E.2d 577,

citing Denison Univ., 2 Ohio St.2d 17, 31 O.O.2d 10, 205 N.E.2d 896, paragraph

four of the syllabus. Second, given the structure of the public-college exemption,

the express limitation to property “not used with a view to profit” applied only to

the “lands connected with” public colleges, not to the separately mentioned

“buildings connected with” the institution. Cleveland State at 6-7, citing Kenyon

College v. Schnebly (Knox C.P.1909), 12 Ohio C.C.(N.S.) 1, affirmed, 81 Ohio

St. 514, 91 N.E. 1138. R.C. 5709.07(A)(4) exempts “[p]ublic colleges and

academies and all buildings connected with them, and all lands connected with

public institutions of learning, not used with a view to profit”; the phrase “not

used with a view to profit” modifies “lands,” but not “buildings.”

{¶ 27} Combining these principles, we concluded that the modular

buildings qualified as “buildings connected with” the university since they were “

‘with reasonable certainty used in furthering or carrying out the necessary objects

and purposes of the college.’ ” Cleveland State, 26 Ohio St.2d at 8, 55 O.O.2d 1,

268 N.E.2d 577, quoting Denison Univ., 2 Ohio St.2d at 21-22, 31 O.O. 2d 10,

205 N.E.2d 896. The syllabus states that an exemption could be allowed for

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“buildings located on the campus of a state university and used exclusively for

classrooms and faculty offices” even though the buildings were “leased for a term

of years, with provision for rental therefor, from a corporation for profit.”

Cleveland State, paragraph two of the syllabus. Cf. Athens Cty. Aud. v. Wilkins,

106 Ohio St.3d 293, 2005-Ohio-4986, 834 N.E.2d 804, ¶ 19-22 (public-college

exemption not available for off-campus private dormitories owned by a for-profit

company, when college did not lease the buildings and would not itself benefit

from the tax exemption).

{¶ 28} In contrast, the present case raises the distinct issue whether the

“schoolhouse” itself and the land beneath it may qualify for a public-schoolhouse

exemption, when both are leased from a for-profit landlord. Cleveland State does

not control the present case, and we cannot extend its holding to the present facts

in light of the restrictive character of the public-schoolhouse exemption.

Although leased property may sometimes qualify for exemption, property

subject to a commercial lease with a for-profit landlord does not qualify

{¶ 29} AMP also contends that a commercial lease is irrelevant to the

issue of exempt status so long as the lessee uses the property for exempt purposes.

AMP emphasizes certain decisions that allow the exemption of leased property.

{¶ 30} This argument raises two questions. The first is whether

ownership and use must coincide for a building to qualify as an exempt public

schoolhouse. Gerke answers this question by declaring that the “public” in

“public schoolhouse” “is not used in the sense of ownership, but as descriptive of

the uses to which the property is devoted.” Gerke, 25 Ohio St. at 246-247. Thus,

property “appropriated to the support of education for the benefit of the public

without any view to profit” qualifies for exemption, id. at 247, and that standard

contains no requirement that the owner be the entity that operates the school. It

follows that a community school that leases its building may still receive the

benefit of tax exemption as a public schoolhouse.

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{¶ 31} But property subject to a commercial, for-profit lease is a different

matter. Gerke specifically limits the exemption of privately owned property to

property that is used “without any view to profit.” The second question raised by

AMP’s argument is whose use should be considered — the lessee’s, or both the

lessor’s and the lessee’s?

{¶ 32} AMP relies on Bexley Village, Ltd. v. Limbach (1990), 68 Ohio

App.3d 306, 588 N.E.2d 246, to maintain that the commissioner and the BTA

must focus exclusively on the lessee’s use of the property. In Bexley Village, the

Tenth District Court of Appeals granted the public-college exemption for a

parking lot that was leased by a private developer to Capital University for a rent

of $1 per year. Instead of drawing the obvious conclusion that the nominal

character of the rent ensured that the lease was not for profit, the Tenth District

held that in deciding whether the property was “used with a view to profit,” one

entity must be considered, which in that case was the lessee, Capital University.

{¶ 33} Because Bexley Village addresses the public-college exemption,

we regard the case as inapposite. We hold that under the public-schoolhouse

exemption, the restriction that the property not be used with a view to profit

requires examination of the total use of the property by both lessor and lessee. If

the lease is intended to generate profit for the lessor, the property does not qualify

for exemption; similarly, the property does not qualify if the lessee’s use is

intended to generate profit.4

{¶ 34} It follows that because AMP leases the property to CCPA under a

for-profit lease, the public-schoolhouse exemption is not available in the present

case.

Case law interpreting the exemption for houses of

4. We note, however, that there may be situations in which an exemption could be allowed under

R.C. 5709.07 even though the property generated rental income for the owner. See R.C.

5709.07(B) (possibility of exemption for leased property when income goes to municipal

corporation or school district).

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public worship does not apply to this case

{¶ 35} AMP also relies on BTA decisions in which the BTA reversed the

Tax Commissioner’s denial of exemption under R.C. 5709.07(A)(2), the house-

of-public-worship exemption. See Gary Clair/Christ United Church v. Tracy

(Sept. 11, 1998), BTA No. 97-K-306; Northcoast Christian Ctr. v. Tracy (July 18,

1997), BTA No. 96-M-811; Jubilee Christian Fellowship, Inc. v. Tracy (May 17,

2002), BTA No. 99-R-239. AMP argues that denying the exemption in this case

necessarily contradicts the grant of exemption in those cases. We disagree.

Although each of the BTA cases that AMP cites involved a religious congregation

leasing a building for use as a place of worship under leases that were

commercial, or presumed to be commercial, these cases are not dispositive of the

issue before us.

{¶ 36} The issue of whether buildings devoted to public worship that are

subject to a commercial lease are tax exempt is not before us, and we do not

decide it. But the analysis differs in cases involving houses of public worship

because Gerke’s requirement that a privately owned schoolhouse be operated

“without any view to profit” does not apply to them. Unlike schoolhouses, houses

of worship, by their nature, are privately owned. Moreover, the 1851 Constitution

explicitly authorized an exemption for houses of worship, whereas it did not

authorize exemption of private schools unless they were “institutions of purely

public charity.”

{¶ 37} Furthermore, the exemption for houses of public worship as

currently codified does not expressly prohibit a for-profit use of the building

devoted to worship. Although for more than a century this exemption and the

public-schoolhouse exemption were closely linked, that link was broken in 1988

with the enactment of Am.S.B. No. 71. 142 Ohio Laws, Part I, 147 (“S.B. 71”).

S.B. 71 separately codified them at R.C. 5709.07(A)(1) (exemption for public

schoolhouse) and at R.C. 5709.07(A)(2) (exemption for house of public worship).

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The latter exemption now provides the exemption for “[h]ouses used exclusively

for public worship, the books and furniture in them, and the ground attached to

them that is not leased or otherwise used with a view to profit and that is

necessary for their proper occupancy, use, and enjoyment.” R.C. 5709.07(A)(2).

That wording unambiguously applies the not-for-profit limitation only to the

“ground attached” to the building, not to the building itself. It follows that any

limitations on the exemption for the building must relate to the requirement that it

be used exclusively for public worship.

The Tax Commissioner’s argument that Gerke

has been overruled is jurisdictionally barred

{¶ 38} Departing from the analysis he employed in his final

determination, the Tax Commissioner’s briefs in this court insist that our case law

holds that the public-schoolhouse exemption applies only when the property is

publicly owned, i.e., owned by the state or a political subdivision such as a school

district. As indicated in footnote three of this opinion, the cases cited by the Tax

Commissioner do not overrule Gerke. But we lack jurisdiction to address this

assertion as a ground for reversal, because the Tax Commissioner did not assign

any error in the notice of appeal in relation to this argument. See Fogg-Akron

Assoc., L.P. v. Summit Cty. Bd. of Revision, 124 Ohio St.3d 112, 2009-Ohio-6412,

919 N.E.2d 730, ¶ 12, citing Newman v. Levin, 120 Ohio St.3d 127, 2008-Ohio-

5202, 896 N.E.2d 995, ¶ 28.

Conclusion

{¶ 39} The BTA erred by granting a public-schoolhouse exemption for

property owned by a commercial landlord and leased to a community school

under a for-profit lease. We therefore reverse the decision of the BTA and

reinstate the Tax Commissioner’s denial of the exemption.

Decision reversed.

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January Term, 2010

BROWN, C.J., and PFEIFER, LUNDBERG STRATTON, O’CONNOR,

O’DONNELL, and CUPP, JJ., concur.

__________________

LUNDBERG STRATTON, J., concurring.

{¶ 40} Case law constrains me to concur in the majority’s holding, but I

write to express my concern that our holding places community schools in a

conundrum as to how to pay property taxes on leased property, because

community schools are funded by state funds but are prohibited by law from

using those funds to pay taxes.

{¶ 41} Cincinnati College Preparatory Academy (“CCPA”) is a

community school as defined in R.C. Chapter 3314. Pursuant to R.C. Chapter

3314, community schools are public schools and are part of the state’s program of

education. R.C. 3314.01(B). Thus, community schools receive state funding.

See R.C. 3314.08. However, community schools cannot use state funds to pay

any taxes that they owe. R.C. 3314.082.

{¶ 42} CCPA leased property to use for its schoolhouse pursuant to a

triple-net lease, which is standard practice for commercial properties and requires

the lessee to assume certain obligations pertaining to the leased property,

including utilities, maintenance, insurance, and taxes. See, e.g., AEI Net Lease

Income & Growth Fund v. Erie Cty. Bd. of Revision, 119 Ohio St.3d 563, 2008-

Ohio-5203, 895 N.E.2d 830, ¶ 6. Thus, CCPA was obligated by the lease to pay

any taxes due on the property.

{¶ 43} Generally, R.C. 5709.07 exempts property from taxation that is

used for certain charitable activities, and in particular, subsection (A)(1) exempts

from taxation “public schoolhouses” and “the ground attached to them” as long as

the property is “not leased or otherwise used with a view to profit.” In my

opinion, it is the lessee’s use of the property that should determine whether the

property qualifies for a tax exemption under R.C. 5709.07(A)(1). For example, if

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the lessee uses property for a public schoolhouse and has no view to profit in

doing so, the property should be exempt from taxation. However, as the majority

opinion makes clear, case law does not support my view and instead supports our

holding that a public schoolhouse is not exempt from taxation if the owner of the

property leases it with a view to profit.

{¶ 44} My concern is that our holding creates a predicament for

community schools that lease the property and buildings that they use to operate

the schools. Under our holding, lessors who lease property for use as a

schoolhouse will fail to qualify for an exemption under R.C. 5709.07(A)(1) when

the lessor leases the property with a view to profit. The property-tax obligation is

passed on to the community school pursuant to the triple-net lease. However,

community schools are prohibited by law from using state funds to pay these

taxes. In my opinion, disqualifying property from the schoolhouse exemption

when it is used for a public schoolhouse merely because the property’s lessor has

a view to profit seems to run contrary to the general intent within R.C. 5709.07,

and causes community schools that lease property to face a conundrum as to how

they will pay the real estate taxes.

{¶ 45} Accordingly, although I concur in the holding in this case, I invite

the General Assembly to amend R.C. 5709.07(A)(1) if its members share my

concerns. The General Assembly created an exemption for buildings that are

“connected with” colleges, irrespective of whether the lessor leases buildings with

a view to profit. See Cleveland State Univ. v. Perk, (1971), 26 Ohio St.2d 1, 55

O.O.2d 1, 268 N.E.2d 577. The General Assembly could amend R.C.

5709.07(A)(1) to achieve a similar result.

{¶ 46} Accordingly, I concur.

__________________

Eastman & Smith, Ltd., Graham A. Bluhm, M. Charles Collins, and Amy

J. Borman, for appellees.

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January Term, 2010

Richard Cordray, Attorney General, and Lawrence D. Pratt, Barton A.

Hubbard, and Sophia Hussain, Assistant Attorneys General, for appellant.

______________________

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