Anderson Street Associates v. City of Boston

• Decision Date: 17 November 2004
• Citation: 817 NE 2d 759,442 Mass. 812
• Parties: ANDERSON STREET ASSOCIATES v. CITY OF BOSTON & another (and a companion case).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

442 Mass. 812

817 NE 2d 759

ANDERSON STREET ASSOCIATES v. CITY OF BOSTON & another¹ (and a companion case²).

Supreme Court of Massachusetts, Suffolk.

October 5, 2004.

November 17, 2004.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

Janet Steckel Lundberg (Richard M. Bluestein & Edward A. Broderick with her) for Anderson Street Associates.

Saul A. Schapiro (Nina F. Lempert with him) for Boston Redevelopment Authority.

Gregory B. Franks, for city of Boston, was present but did not argue.

Deborah L. Thaxter & Jonathan Sablone, for Massachusetts Affordable Housing Alliance, amicus curiae, submitted a brief.

IRELAND, J.

This case raises an issue of first impression: whether G. L. c. 121A contains an implicit cap on the amount developers must pay a city or town in lieu of taxes pursuant to their urban redevelopment contracts. We granted the plaintiffs' application for direct appellate review to consider whether a Superior Court judge erred in granting summary judgment to the defendants, holding that the plaintiffs are bound by their contracts created under G. L. c. 121A, § 6A, even though they are paying more than they would if they were not exempted from property taxes assessed pursuant to G. L. c. 59.³ Because we conclude that G. L. c. 121A does not contain language to the effect that the financial burden created under §§ 6A and 10 must always be less than or equal to taxation amounts otherwise required under G. L. c. 59, we affirm the judgment.

Facts and Procedural Background.

We begin by briefly discussing the general statutory scheme of G. L. c. 121A. Designed to eliminate conditions that cannot be alleviated by the ordinary operation of the real estate market, G. L. c. 121A encourages private developers to foster urban redevelopment projects. G. L. c. 121A, § 2. A developer initiates and designs the project before applying for approval from the appropriate government agencies. G. L. c. 121A, §§ 5, 6. Under G. L. c. 121A, § 10, a developer is exempt from ordinary real estate and property taxes under G. L. c. 59, but instead pays a statutory excise. Pursuant to G. L. c. 121A, § 6A, the developer of a redevelopment project must enter into a written contract with the city or town, agreeing to be bound by the provisions of the statute. Additionally, § 6A allows for a developer to pay an amount additional to the statutory excise. The developer suggests this amount in the initial application, as an incentive to be chosen for the project, and it then becomes part of the contract.

There are no material facts in dispute. We take our facts from the judge's memorandum of decision, supplemented by undisputed facts in the record. The plaintiffs, Anderson Street Associates (Anderson) and Marcus Garvey Apartments (Garvey), are owners of low-to-moderate income housing developments governed by G. L. c. 121A. The defendants are the city of Boston (city) and the Boston Redevelopment Authority (authority), a public body originally organized under G. L. c. 121, § 26QQ, a precursor statute to G. L. c. 121B, § 4, and an "urban renewal agency" pursuant to G. L. c. 121B, § 46.

In March, 1978, pursuant to G. L. c. 121A, § 6A, Anderson entered into a written contract with the city, agreeing to be bound by the provisions of G. L. c. 121A. Garvey entered into a similar written contract in July, 1979. The contracts, which by the plaintiffs' choice have forty-year terms, obligate the plaintiffs to carry out the projects in accordance with the statute, the terms required by the city, and the regulatory agreements into which they entered under G. L. c. 121A, § 18C. The contracts require the plaintiffs to pay the Commonwealth an "urban redevelopment excise tax" mandated by a formula in G. L. c. 121A, § 10.⁴ Each contract also sets forth an additional forty-year § 6A payment based on varying percentages of the project's gross rental collections.⁵ The additional contractual payments must be made only if they exceed the excise required under § 10. Because of their statutory exemption from State and local taxation under G. L. c. 121A, § 10, the plaintiffs received preferential tax treatment on entering into these § 6A agreements, as the amounts owed under § 10 and the terms of the § 6A agreements were less than the amount of taxes that would otherwise have been owed.

However, at some point following the enactment of Proposition 2½ in 1980 (G. L. c. 59, § 21C, inserted by St. 1980, c. 580, § 1), which limited property tax increases to two and one-half per cent of the previous year's tax revenue based on full and fair cash value, the plaintiffs' G. L. c. 121A payments exceeded the payments required under G. L. c. 59.⁶ The plaintiffs made their annual payments to the city in accordance with the terms of their contracts until at least 1996. Beginning in 1996, the plaintiffs attempted to persuade city officials to address the significant gap between their payments and the payments they would be making if they were subject to G. L. c. 59 instead of G. L. c. 121A. In addition, the plaintiffs sought abatements of their G. L. c. 121A payments for tax years 1996, 1997, and 1998, arguing that their payments were disproportionate, unreasonable, and unconstitutional. The Department of Revenue (department) denied these requests on the ground that the plaintiffs' claims related to an underlying constitutional question on which the department lacks authority to render a decision. The plaintiffs appealed to the Appellate Tax Board, which has not taken any action in part due to this litigation.

In April, 1999, Anderson and Garvey filed virtually identical complaints against the city and the authority, asserting claims based on common-law principles, public policy and constitutional violations, and requesting declarations that the G. L. c. 121A contracts were unenforceable both prospectively and retroactively. The defendants moved for summary judgment on all counts, which the judge granted.

Discussion.⁷

1. Standard of review. "The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991), citing Mass. R. Civ. P. 56 (c), 365 Mass. 824 (1974). "An order granting or denying summary judgment will be upheld if the trial judge ruled on undisputed material facts and his ruling was correct as a matter of law." Commonwealth v. One 1987 Mercury Cougar Auto., 413 Mass. 534, 536 (1992), citing Community Nat'l Bank v. Dawes, 369 Mass. 550, 556 (1976). Because we conclude that the motion judge's rulings on undisputed material facts were correct as a matter of law, we affirm the judgments of the Superior Court.

2. Interpretation of G. L. c. 121A. "The primary source of the insight into the intent of the Legislature is the language of the statute." International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 853 (1983). "Where the language of a statute is plain, it must be interpreted in accordance with the usual and natural meaning of the words." Gurley v. Commonwealth, 363 Mass. 595, 598 (1973). Accord ROPT Ltd. Partnership v. Katin, 431 Mass. 601, 603 (2000); Weitzel v. Travelers Ins. Cos., 417 Mass. 149, 153 (1994); Commonwealth v. One 1987 Mercury Cougar Auto., supra at 537. Absent a clear indication to the contrary, statutory language is to be given its "ordinary lexical meaning." Surrey v. Lumbermens Mut. Cas. Co., 384 Mass. 171, 176 (1981). "While a court must normally follow the plain language of a statute, it need not adhere strictly to the statutory words if to do so would lead to an absurd result or contravene the clear intent of the Legislature." Commonwealth v. Rahim, 441 Mass. 273, 278 (2004). Contrary to the plaintiffs' argument, the result in this case is far from "absurd."

General Laws c. 121A, § 10, provides in relevant part that urban redevelopment corporations "shall be exempt from taxation and from betterments and special assessments." However, G. L. c. 121A, § 6A, provides that "nothing in § 10 shall prevent such contract from further providing for such corporation to pay to the city or town . . . such specific or ascertainable amount in addition to the excise prescribed by § 10 as may have been stated in the application." Section 6A also provides that such payments in addition to the excise prescribed in § 10 "shall be in lieu of taxes." Contrary to the plaintiffs' arguments, G. L. c. 121A does not provide tax concessions to the developers so that the total tax burden under §§ 6A and 10 will be less than or equal to taxation amounts otherwise required under G. L. c. 59.

To interpret G. L. c. 121A to include a cap on the amount developers must pay would require this court to read words into the statute that are not there.⁸ The fact that tax breaks may have been envisioned as part of the incentive for developers to engage in urban redevelopment projects does not equal a guaranty that the statutory payments would always be less than or equal to local property taxes. Had the Legislature intended G. L. c. 121A to guarantee tax concessions to be permanent, it could have included statutory language to that effect. It has done so elsewhere. For example, G. L. c. 121C, § 9, dealing with economic development, exempts corporations from taxes, betterments, and special assessments, requiring instead that the corporations pay, in lieu of taxes, a sum determined by the municipality; however, such sum may not exceed "the amount that would be levied at the then current tax rate." Id.⁹

Similarly, in G. L. c. 121A, § 15, the Legislature required additional payments to be made to a municipality if the gross receipts exceeded the funds needed to maintain the project, up to an amount that the developer would have paid if it was not exempt from ordinary taxes.¹⁰ Thus, § 15 includes a...