Du Page County Airport v. Dept. of Revenue, 2-04-0769.

• Decision Date: 14 June 2005
• Docket Number: No. 2-04-0770.,No. 2-04-0769.,2-04-0769.,2-04-0770.
• Citation: 831 N.E.2d 30
• Parties: DU PAGE COUNTY AIRPORT AUTHORITY, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, Brian A. Hamer, in His Official Capacity as Director of the Department of Revenue, Du Page County Board of Review, West Chicago Elementary School District No. 33, the City of West Chicago, West Chicago High School District No. 94, the West Chicago Park District, the West Chicago Fire Protection District, and the West Chicago Library District, Defendants-Appellants. Du Page County Airport Authority, Plaintiff-Appellee, v. The Department of Revenue and Brian A. Hamer, in His Official Capacity as Director of the Department of Revenue, Defendants-Appellants (Du Page County Board of Review, West Chicago Elementary School District No. 33, the City of West Chicago, West Chicago High School District No. 94, the West Chicago Park District, the West Chicago Fire Protection District, and the West Chicago Library District, Defendants).
• Court: Illinois Supreme Court

831 N.E.2d 30

DU PAGE COUNTY AIRPORT AUTHORITY, Plaintiff-Appellee, v.The DEPARTMENT OF REVENUE, Brian A. Hamer, in His Official Capacity as Director of the Department of Revenue, Du Page County Board of Review, West Chicago Elementary School District No. 33, the City of

West Chicago, West Chicago High School District No. 94, the West Chicago Park District, the West Chicago Fire Protection District, and the West Chicago Library District, Defendants-AppellantsDu Page County Airport Authority, Plaintiff-Appellee, v.The Department of Revenue and Brian A. Hamer, in His Official Capacity as Director of the Department of Revenue, Defendants-Appellants (Du Page County Board of Review, West Chicago Elementary School District No. 33, the City of West Chicago, West Chicago High School District No. 94, the West Chicago Park District, the West Chicago Fire Protection District, and the West Chicago Library District, Defendants).

No. 2-04-0769.

No. 2-04-0770.

Appellate Court of Illinois, Second District.

June 14, 2005.

Rehearing Denied July 20, 2005.

COPYRIGHT MATERIAL OMITTED

Joseph E. Birkett, Du Page County State's Attorney, Lisa A. Hoffman and Robert G. Rybica, Assistant State's Attorneys, Wheaton, for Du Page County of Review.

Kenneth M. Florey, Joanne H. Petty, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Chicago, for the City of West Chicago, The West Chicago Park District, West Chicago Elementary School DistrictNo. 33, West Chicago Fire Protection District, West Chicago High School DistrictNo. 94, West Chicago Library District.

Lisa Madigan, Attorney General, Gary S. Feinerman, Solicitor General, Diane M. Potts, Assistant Attorney General, Chicago, for Illinois Department of Revenue in No. 2-04-0769.

Phillip A. Luetkehans, Brian J. Armstrong, Schirott & Luetkehans, P.C., Itasca, for Du Page County Airport Authority in No. 2-04-0769.

Lisa Madigan, Attorney General, Diane M. Potts, Assistant Attorney General, Chicago, for Brian A. Hamer, Director, Illinois Department of Revenue in No. 2-04-0770.

Phillip A. Luetkehans, Schirott & Luetkehans, P.C., Itasca, for Du Page Airport Authority in No. 2-04-0770.

Presiding Justice O'MALLEYdelivered the opinion of the court:

Defendants the Department of Revenue(Department), Brian A. Hamer(in his official capacity as director of the Department), Du Page County Board of Review, West Chicago Elementary School DistrictNo. 33, City of West Chicago, West Chicago High School DistrictNo. 94, West Chicago Park District, West Chicago Fire Protection District, and West Chicago Library District appeal the decision of the circuit court of Du Page County reversing the decision of the Department and ruling that certain property belonging to plaintiff, the Du Page County Airport Authority, fulfills an airport authority purpose and is thus tax exempt.For the reasons that follow, we reverse the decision of the circuit court of Du Page County and affirm the ruling of the Department.

I.FACTS

The parties stipulated to the relevant facts, which we briefly recite here.Plaintiff is an airport authority created pursuant to the Airport Authorities Act (Act)(70 ILCS 5/1 et seq.(West 2000)).By virtue of the authority granted it under the Act, plaintiff owns, operates, and maintains the Du Page Airport (Airport), a general aviation airport, and owns property leased to various tenants, including private, for-profit, commercial entities, all on approximately 2,800 acres of land in West Chicago, Illinois.As a general aviation airport, the Airport accommodates a mix of air traffic ranging from single-engine, propeller-driven aircraft and helicopters to large, high-performance jets.There are no commercial carriers using any of the Airport's facilities.In real estate tax year 2000, plaintiff's maximum real estate tax rate by statute was 0.0306, and the actual tax rate for plaintiff's real estate tax levy was 0.0291.

This appeal involves 65 tax parcels, which plaintiff claims are exempt under section 15-160 of the Property Tax Code(Code)(35 ILCS 200/15-160(West 2000)) as fulfilling an "Airport Authority purpose."The parties have grouped the 65 parcels generally into six groups.

The first group of contested parcels comprises the land for the Prairie Landing Golf Club (Golf Course Property).The Golf Course Property contains a 21-hole public golf course and appurtenant facilities, such as an 18,600-square-foot clubhouse, a maintenance building, and a pump house.The clubhouse consists of a golf shop; restaurant; bar; locker rooms; and banquet facilities for private parties, weddings, and business meetings.In the year 2000, the golf course charged $90 per round of golf (including use of a golf cart).

Plaintiff owns the golf course and appurtenant facilities.For tax year 2000, the golf course was maintained and operated by a private, for-profit management company, Meadowbrook Golf Group, Inc.(Meadowbrook), pursuant to a management agreement.The annual management fee was $85,000 plus bonus payments based on the revenue generated by the golf course.Meadowbrook also maintained and operated the clubhouse, pro shop, restaurant, and banquet hall.Except for parcels containing portions of a runway, a heliport, landing guidance lights, and a clear zone for the runway, there are no aviation or aeronautic activities occurring on the Golf Course Property.Though plaintiff did not itself maintain or operate the golf course or its facilities, but instead did so through its agent, Meadowbrook, the Golf Course Property serves as a revenue source for plaintiff.

The second category of property is the Flight Center Property.The Flight Center Property measures approximately 86.93 acres and contains the Flight Center building as well as a tie-down area for aircraft.The Flight Center building is a three-story office building containing approximately 58,280 square feet of space and having a footprint of 17,000 square feet.For tax years 2000 and 2001, all of the Flight Center Property, except for 18,966 square feet of the building, was exempt.The nonexempt 18,966 square feet was leased in 2000 to Raytheon, which used the space as office space for aircraft management and aircraft charters; Kitty Hawk Café, which used the space for a restaurant and catering; Prime Meridian, which used the space as office space for an insurance agency; and Computer Dynamics, which used the space as office space for computer services.A portion of the Flight Center building was occupied in 1999 by Alumax Extrusion Company, but that tenancy expired in July 1999 and the space is now used by plaintiff for its office and incidental uses.All of the lessees occupying the nonexempt space in the Flight Center building (other than plaintiff) are private, for-profit commercial entities.Except according to the terms of the leases, plaintiff did not operate or maintain any of the nonexempt space in the Flight Center building other than the space it occupied.

The third category of disputed parcels is known as the Frank's Auto Repair Property.This property contains three buildings, all of which are leased to a private, for-profit auto repair and sales company.The lessee has the exclusive right to use the property and uses it to operate a used car dealership and auto repair business.The lessee's use of the Frank's Auto Repair Property as an auto repair business and car dealership is not related to aviation and aeronautic operations, and, except as provided for in the lease, plaintiff did not maintain or operate the Frank's Auto Repair Property.In 2000, the property served as a revenue source for plaintiff.

The fourth category consists of a parcel known as the Antenna Property.The Antenna Property consists of 1.98 acres.All but 250 square feet of the property is vacant and has been designated by plaintiff for future development.For a lease term including tax year 2000, the 250-square-foot piece that is not vacant is leased to a private, for-profit entity that maintains a commercial cellular tower on the land.Due to the lease provisions negotiated by the former owner of the Antenna Property, all rent was paid in a single lump sum at the time the lease was signed.The operation of the commercial cellular tower is not related to aviation and aeronautical operations, and no such operations take place on the property.In 2000, plaintiff maintained all of the Antenna Property except the 250-square-foot leased area.

The fifth category of disputed parcels is referred to as the Wiesbrock Farm Property.It consists of 429.4 acres and is leased to Wiesbrock Turf Farm, Inc., a private, for-profit commercial entity that uses the property for sod farming and maintains related buildings and storage sheds thereon.The lessee of the Wiesbrock Farm Property has the exclusive right to use the property and uses it for commercial farming.No aviation or aeronautic activities occur on the Wiesbrock Farm Property, and, except as provided in the lease, plaintiff did not maintain or operate the property in 2000.In 2000, the property served as a revenue source for plaintiff.

The sixth, and final, category of disputed parcels comprises the Bork Farm Property.This property consists of 227.06 total acres.In 2000, the property was subject to a lease for use by a private, for-profit commercial entity for grain farming.The lessee of the Bork Farm Property has the exclusive right to use the property and uses it for commercial farming.Except as provided in the lease, plaintiff did not maintain or operate the Bork Farm Property, and no aviation or aeronautic activities occur on the property.In 2000, the Bork Farm Property served as a revenue source for plaintiff.

In 2000, all of the parcels within the Wiesbrock Farm Property and the Bork Farm Property were intended for inclusion in the yet-to-be-constructed Du Page County Research and Technology Park.

Plaintiff applied for a tax exemption under section 15-160 of the Code (35 ILCS...