Summary
In Supanick, the county commissioners had purchased a parcel for the express purpose of establishing a hospital on the site.
Summary of this case from Episcopal School Cincinnati v. LevinOpinion
No. 72-262
Decided November 22, 1972.
Taxation — Exemptions — Property acquired for public use — Exempt although use for exempt purposes not begun — Where not devoted to nonexempt use — Hospitals.
Where a board of county commissioners acquires real property with the ultimate purpose of devoting it to a specified use which would exempt it from taxation, such property is entitled to be exempted from taxation until such time as the ultimate purpose has been abandoned, or efforts to realize the ultimate purpose have ceased, or the property has been put to a nonpublic use, even though actual physical use of the property for the intended exempt purpose has not yet begun.
APPEAL from the Board of Tax Appeals.
In 1970, the Board of County Commissioners of Lake County acquired five parcels (41.06 acres) of real property for the construction of a county hospital. There were and are no structures or buildings on the premises, and the property has not been put to any actual use since its purchase.
Two bond issues for hospital construction have been defeated by the electorate; however, the land continues to be held for hospital purposes. Feasibility studies of other forms of financing, such as revenue bonds, have been undertaken.
The Board of Tax Appeals denied applications for exemption of the property, holding that "* * * mere ownership of this land by the commissioners is not sufficient to bring it under the provisions of Revised Code Section 5709.08 * * *." The cause is now before this court upon an appeal from that decision.
Appellee, County Auditor, in his brief filed herein, states that the exemption request should have been granted. Nothing was filed on behalf of the Board of Tax Appeals, and oral argument was waived by both parties.
Mr. Fred V. Skok, prosecuting attorney, and Mr. Theodore R. Klammer, for appellant.
Mr. Fred V. Skok, prosecuting attorney, and Mr. John Shoop, for appellee.
The question herein is whether the subject property has properly been denied an exemption under R.C. 5709.08 as "public property used exclusively for a public purpose" because the actual physical use has not yet commenced. To so hold would be to deny a proper entity relief from a tax burden on property purchased with the sole intention of developing it for a purpose which would allow its tax exemption under R.C. 5709.08.
There is nothing in the record to indicate that the subject property is intended, or is being used, for other than public purposes, and the legislative purpose of R.C. 5709.08 would be equally well served by permitting the exemption at times during which the property is being held and prepared for uses cognizable under R.C. 5709.08.
For a discussion of the purpose of R.C. 5709.08, see Carney v. Cleveland City School Dist. Library (1959), 169 Ohio St. 65, 66.
In paragraph one of the syllabus of Carney v. Cleveland City School Dist. Library (1959), 169 Ohio St. 65, this court held that the fact that actual physical use of the property for the exempt purpose had not yet commenced was not enough to deprive the property of its entitlement to be exempted from taxation, so long as the property was not then devoted to nonexempt or commercial use. The court stated "in instances where a structure must be built before an actual physical use can begin, in addition to the preparation of plans, the letting of bids and the actual construction, quite frequently it is necessary to procure funds, * * *. All these matters necessarily consume time during which there can be no actual physical use." (Emphasis added.)
In this case, two efforts to procure funds have been defeated by the electorate. However, the land continues to be held for public purposes and feasibility studies of other forms of financing have been taken.
We hold, therefore, that where a board of county commissioners acquires real property with the ultimate purpose of devoting it to a specified use which would exempt it from taxation, such property is entitled to be exempted from taxation until such time as the ultimate purpose has been abandoned, or efforts to realize the ultimate purpose have ceased, or the property has been put to a use which would not qualify it for an exemption, even though actual physical use of the property for the intended exempt purpose has not yet begun.
The decision of the Board of Tax Appeals is unreasonable and unlawful, and it is therefore reversed.
Decision reversed.
O'NEILL, C.J., SCHNEIDER, HERBERT, CORRIGAN, LEACH and BROWN, JJ., concur.