Carney v. City of Cleveland
| Decision Date | 24 January 1962 |
| Docket Number | Nos. 36978,36980,s. 36978 |
| Citation | 18 O.O.2d 256,173 Ohio St. 56,180 N.E.2d 14 |
| Parties | , 18 O.O.2d 256 CARNEY, Aud., Appellant, v. CITY OF CLEVELAND et al., Appellees. Application for Exemption of Real Property from Taxation. CITY OF CLEVELAND, Appellant, v. CARNEY, Aud., Appellee. |
| Court | Ohio Supreme Court |
Syllabus by the Court
1. For property to be exempt from taxation under Section 5709.08, Revised Code, the following three conditions are essential, (1) the property must be public property, (2) the use thereof must be for a public purpose, and (3) the property must be used exclusively for a public purpose.
2. Where property of a municipally owned airport is leased for long periods by the municipality to private persons to serve their own purposes, an element of ownership passes to the lessees, and such property thereby loses its identity as public property used exclusively for a public purpose and is not exempt from taxation.
These two appeals are pursuant to Section 5717.04, Revised Code. One is by the Auditor of Cuyahoga County (case No. 36978) and the other by the city of Cleveland (case No. 36980), hereinafter called the city, and are from a decision of the Board of Tax Appeals determining the taxable status for the year 1959 of certain real property in the Cleveland and Brookpark taxing districts of Cuyahoga County.
On December 31, 1959, the city filed its application with the board to have exempted from taxation eight aircraft hangars at the Cleveland Hopkins Airport, now located in the city, which were constructed pursuant to separate lease agreements between the city and eight entities, namely, Executive Hangars, Incorporated, Cleveland Hangars, Incorporated, The Standard Oil Company of Ohio, Republic Steel Corporation, Thompson Ramo Wooldridge, Incorporated, The M. A. Hanna Company, United Airlines, Incorporated, and American Airlines, Incorporated.
The leases stipulate that, for relatively small annual rental fees for the land, the named business enterprises will build, at their own expense, on land owned by the city, aircraft hangars for the use of the lessees, such leases to extend over periods of from 25 to 40 years.
As to the six entities first named above, each lease provides that title to all hangar improvements constructed or installed on the hangar-base premises and becoming a part of the real estate shall pass to the city as the same are affixed to the land, whereas, with respect to the last two entities named, each lease provides, as interpreted by the board in connection with a related instrument, that alterations or additions which become a part of the real estate shall become the property of the city only upon the expiration of the leasehold estate.
As to the six entities first named, it was determined by the board that title to the hangars constructed by them was vested in the city on January 1, 1959, and that such hangars should be placed upon the Cuyahoga County tax exempt list for the tax year 1959, and that, as to the two entities last named, title to the hangars constructed by them was not vested in the city on January 1, 1959, and that such hangars were not entitled to exemption from taxation; and the board rendered its decision accordingly. In reaching its conclusions the board noted Section 5709.08, Revised Code, and applied the principles it conceived to have been enunciated in the case of City of Toledo v. Jenkins et al., Board of Tax Appeals, 143 Ohio St. 141, 54 N.E.2d 656, to the effect that hangars erected on a municipally owned airport, even though privately used, are embraced within the general public purpose for which the airport was established, and found that the property it accorded an exempt status for the tax year 1959 was publicly owned and was devoted to a public purpose during the tax year 1959.
John T. Corrigan, Prosecuting Atty., George W. Leddon and Joseph A. Zingales, Cleveland, for John J. Carney, Auditor of Cuyahoga County.
Ralph S. Locher, Director of Law, Joseph H. Crowley and Anthony V. Leanza, Cleveland, for City of Cleveland.
Were the board's determinations unreasonable or unlawful?
Section 5709.08, Revised Code, enacted pursuant to the authorization contained in Section 2, Article XII of the Constitution of Ohio, recites in part:
'* * * public property used exclusively for a public purpose, shall be exempt from taxation.'
Such section was interpreted in the case of Board of Park Commissioners...
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