Summary
affirming denial of charitable-use exemption for baseball stadium owned by charitable institution and leased to professional baseball club because the property was not used exclusively, or even primarily, for charitable purposes
Summary of this case from Christian Voice of Cent. Ohio v. TestaOpinion
No. 36808
Decided April 19, 1961.
Taxation — Exemption — Property of institutions used exclusively for charitable purpose — Section 5709.12, Revised Code — Use of property and not of proceeds thereof, determinative.
APPEAL from the Board of Tax Appeals.
This is an appeal from a decision of the Board of Tax Appeals denying an application for exemption of real property from taxation for the year 1960 and for remission of taxes and penalties for the tax years 1956 to 1959, inclusive. The property involved is the Jet Stadium, home field of the Columbus Jets baseball team.
Two nonprofit corporations and a charitable trust are involved in the acquisition, ownership and disbursal of proceeds of the stadium.
First, the Columbus Baseball Club, a nonprofit corporation, was organized and the members thereof each contributed a sum of money, part of which was used to purchase the franchise of the city of Ottawa in the International League and $50,000 of which was loaned to the Columbus Youth League, a nonprofit corporation organized "to promote exclusively the education, social and general welfare of the youth of the city of Columbus and environs by providing facilities for educational and recreational activities and by sponsoring programs designed to promote the education, health, social and physical welfare of youth, all without discrimination as to race, color or creed."
The Columbus Youth League used the $50,000 as a down payment on the purchase of the stadium from the St. Louis Cardinal Baseball Club and executed a note and mortgage to the St. Louis organization for the balance of the purchase price of $450,000. This mortgage, payable at the rate of $50,000 annually with interest, has been paid down to $125,000 at the present time.
The Columbus Youth League then entered into a lease with the Columbus Baseball Club for the use of the stadium by the latter corporation at a fixed rental of $25,000 per year plus an additional rental based on annual attendance at baseball games. All rents received under this lease have, to date, been applied to the mortgage held by the St. Louis organization.
The terms of the lease reserve to the Columbus Youth League the right to use the leased premises, when not in use by the lessee, for high school and other youth baseball games and for and in connection with other youth activities supported and sponsored by the Columbus Youth League in furtherance of its social welfare program. The stipulation of facts indicates that the stadium has been used by several junior high schools for baseball games, by the Central District High School Baseball Tournament, by the Babe Ruth Leagues, by the Ohio High School All-Star Games and for other youth activities. All such uses have been without charge to the participants or to the organizations to which they belonged.
The record reveals that, as soon as the stadium is completely paid for, it will be transferred to the Columbus Youth Foundation, a charitable trust set up by the Columbus Youth League, to "be operated exclusively to benefit and help the underprivileged, sick and handicapped youth of the city of Columbus and its environs by contributing directly to the needs of such youth and by making contributions to recognized charities, hospitals and other institutions devoted to the education, care and welfare of such youth."
Mr. Robert L. Barton, for appellant.
Mr. Earl W. Allison, prosecuting attorney, and Mr. Ralph H. Heller, for appellee.
The Board of Tax Appeals found from the record before it, in which finding we concur, that the Columbus Youth League and the Columbus Youth Foundation were and are charitable institutions within the purview of Section 5709.12, Revised Code. The sole remaining question is whether the Jet Stadium property owned by the Columbus Youth League was "used exclusively for charitable purposes" so as to be exempt from taxation under that section.
The efforts of those who have labored long to keep professional baseball in Columbus and at the same time to provide a needed service to the youth of Columbus are, indeed, laudable ones. And, if the warmth of sentiment which attaches to attempts to promote the welfare of our youth were permitted to control rather than the cold application of statutes and cases, the subject property could easily be held exempt.
The rule is well established, however, that it is the use of the property and not the use of the proceeds derived therefrom which is determinative of the question of tax exemption. Benjamin Rose Institute v. Myers, Treas., 92 Ohio St. 252, 110 N.E. 924, L.R.A. 1916D, 1170; Incorporated Trustees of Gospel Worker Society v. Evatt, Tax Commr., 140 Ohio St. 185, 42 N.E.2d 900; Burns v. Glander, Tax Commr., 146 Ohio St. 198, 64 N.E.2d 678; Battelle Memorial Institute v. Dunn, Aud., 148 Ohio St. 53, 73 N.E.2d 88; New Orphans' Asylum of Colored Children of Cincinnati v. Board of Tax Appeals, 150 Ohio St. 219, 80 N.E.2d 761; Cleveland Osteopathic Hospital v. Zangerle, Aud., 153 Ohio St. 222, 91 N.E.2d 261.
The following pertinent and, in our view, controlling statement is from the entry of the Board of Tax Appeals:
"Although under the terms of this lease the Columbus Youth League, as lessor, reserved the right to use the leased premises, when not in use by lessee as provided for therein, for high school and other youth ball games and for and in connection with other youth activities supported and sponsored by the lessor in the furtherance of its social welfare purposes, the principal purpose of the lease, in our view, was to make this property available to the Columbus Baseball Club for the exhibition of ball games to be scheduled and played by the Columbus team with other teams in the International League; and for the use of the property by the lessee in operating the concessions, in providing for automobile parking and for doing other things necessary and incidental to the use of the property as a baseball plant.
"In line with the purpose for which the Columbus Baseball Club obtained the possession of this property under said lease, 77 baseball games were scheduled each playing season during the years following the execution of the lease, which games were played by the Columbus baseball team with the several other baseball teams in the International League. In connection with the exhibition of these baseball games the Columbus Baseball Club, as above indicated, engaged in other revenue producing activities; which activities, together with those incident to the playing of the baseball games, required at times the services of something more than 200 employees including the players and others connected with the Columbus baseball team. In this situation as to the facts of the case we are unable to find that this property was used exclusively, or even primarily, for charitable purposes; and for this reason we are of the view that this application for the exemption of this property from taxation for the tax year 1960 and the application for the remission of taxes and penalties on the property for prior tax years should be denied."
From a review of the record here, we cannot say that the decision of the Board of Tax Appeals is either unlawful or unreasonable, and it is, therefore, affirmed.
Decision affirmed.
WEYGANDT, C.J., ZIMMERMAN, TAFT, MATTHIAS, BELL and O'NEILL, JJ., concur.
HERBERT, J., not participating.