Bd. of Assessors of Bridgewater v. Bridgewater State Univ. Found..1

79 Mass.App.Ct. 637

948 N.E.2d 903

267 Ed. Law Rep. 866

BOARD OF ASSESSORS OF BRIDGEWATER

v.BRIDGEWATER STATE UNIVERSITY FOUNDATION.1

No. 10–P–593.

Appeals Court of Massachusetts, Suffolk.

Argued March 15, 2011.Decided June 7, 2011.Review Granted July 28, 2011.

Mary C. Butler for board of assessors of Bridgewater.Michael R. Coppock, Boston, for the taxpayer.Present: LENK, GREEN, & KATZMANN, JJ.

GREEN, J.

At issue in the present case is the applicability of the charitable exemption from real estate taxation provided by G.L. c. 59, § 5, Third, to properties owned by the appellee Bridgewater State University Foundation (foundation) but used in whole or in part by Bridgewater State University (university).² The Appellate Tax Board (board) concluded that the properties are tax exempt because the foundation “occupied” the properties, including the portions used by the university, reasoning that use of the properties by the university in furtherance of the foundation's charitable purposes constitutes occupancy of the property by the foundation, within the meaning of the statute. We reverse.

Background. We summarize the relevant facts as stipulated by the parties, supplemented by additional facts found by the board in its written decision and not disputed by the parties on appeal.³ The town of Bridgewater (town) is a municipality in the Commonwealth. The foundation is a charitable foundation that was established in 1984. The university is a State university. ⁴ Its campus is situated on 235 acres in the center of the town. The foundation owns real property at the following locations in the town: (i) 180 Summer Street; (ii) 25 Park Terrace; (iii) three unimproved parcels of land on Plymouth Street (containing .74, 16.22 and 5.79 acres, respectively); and (iv) 29 Park Terrace. The foundation previously leased the buildings at 25 Park Terrace and 180 Summer Street to the university for one dollar per year per building (or part thereof used by the university). The lease of 25 Park Terrace was written, while the lease of 180 Summer Street was oral; by the time of the present appeal to the board, however, both leases had expired, though the university continued to use both properties without any payment. There has never been a lease from the foundation to the university of the property at 29 Park Terrace or the land on Plymouth Street; the university's use of those properties has been permissive, without payment of any amount to the foundation.

The foundation is organized and operated pursuant to G.L. c. 15A, § 37, exclusively for the benefit of the university (which is an institution of public higher education within the meaning of that chapter).⁵ The foundation's operating agreement with the university provides that the foundation shall hold, manage and invest its money and other assets “solely for the benefit of the College ⁶ and not otherwise.” The board found that the Plymouth Street parcels, though unimproved, were occupied by students of the university and student groups for recreational purposes, that this use promoted the “physical training, and the social, moral and aesthetic development” of the students of the university, and that such use is consistent with the charitable purpose of the foundation. The board also found that 25 Park Terrace was occupied in part by the foundation for its own offices and in part by the university's alumni office, while 180 Summer Street housed the university's political science department. The property at 29 Park Terrace was used by both the university and the foundation for fundraising events and receptions. Because the use of each of the properties was consistent with the foundation's charitable purpose, the board concluded that the foundation “occupied” the properties within the meaning of G.L. c. 59, § 5, Third.

Discussion. “We review decisions of the board for errors of law.... Findings of fact by the board must be supported by substantial evidence.” Middlesex Retirement Sys., LLC v. Assessors of Billerica, 453 Mass. 495, 498–499, 903 N.E.2d 210 (2009) (internal citations omitted). Where, as here, the case was submitted to the board on a statement of agreed facts, together with other documentary submissions, it constitutes a “case stated”; accordingly, “ ‘[t]he inferences drawn by the [board] from the facts stated are not binding upon us, and questions of fact as well as questions of law are open for review’ on appeal.” Id. at 499, 903 N.E.2d 210, quoting from Caissie v. Cambridge, 317 Mass. 346, 347, 58 N.E.2d 169 (1944). “In reviewing mixed questions of fact and law, the board's expertise in tax matters must be recognized, and its decisions are due ‘some deference.’ ” Koch v. Commissioner of Rev., 416 Mass. 540, 555, 624 N.E.2d 91 (1993), quoting from McCarthy v. Commissioner of Rev., 391 Mass. 630, 632, 462 N.E.2d 1357 (1984).

General Laws c. 59, § 5, Third, provides an exemption from taxation for property described in pertinent part as follows:

“Personal property of a charitable organization, which term, as used in this clause, shall mean (1) a literary, benevolent, charitable or scientific institution or temperance society incorporated in the commonwealth, and (2) a trust for literary, benevolent, charitable, scientific or temperance purposes if it is established by a declaration of trust executed in the commonwealth or all its trustees are appointed by a court or courts in the commonwealth and if its principal literary, benevolent, charitable, scientific or temperance purposes are solely carried out within the commonwealth or its literary, benevolent, charitable, scientific or temperance purposes are principally and usually carried out within the commonwealth; and real estate owned by or held in trust for a charitable organization and occupied by it or its officers for the purposes for which it is organized or by another charitable organization or organizations or its or their officers for the purposes of such other charitable organization or organizations; and real estate purchased by a charitable organization with the purpose of removal thereto, until such removal, but not for more than two years after such purchase....” ⁷ (Emphasis added).

There is no dispute that the foundation is a charitable organization within the meaning of the statute, and that the university is not.⁸ Accordingly, strictly under the terms of the statute the properties at issue are exempt from...