Ford Motor Co. v. County of Ramsey
| Decision Date | 03 July 2013 |
| Docket Number | 62-CV-11-4129,62-CV-09-6357,62-CV-08-3719,C5-07-4696,62-CV-10-4801 |
| Parties | FORD MOTOR COMPANY, Petitioner, v. COUNTY OF RAMSEY, Respondent. |
| Court | Tax Court of Minnesota |
This matter came before the Honorable Bradford S. Delapena, Chief Judge of the Minnesota Tax Court, on Ramsey County’s motion to dismiss for failure to comply with Minnesota Statutes section 278.05, subdivision 6.
Attorneys and Law Firms
Thomas R. Wilhelmy and Christopher A. Stafford, Attorneys at Law represented petitioner Ford Motor Company.
Marc J Manderscheid, Andrew M. Carlson, and Benjamin E. Gurstelle Attorneys at Law, represented respondent County of Ramsey.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER DENYING COUNTY'S MOTION TO DISMISS
The Court, upon all the files, records, and proceedings herein, now makes the following:
FINDINGS OF FACT
1. During the period in question (2006 through 2011), Ford produced Ranger trucks at its Twin Cities Assembly Plant (TCAP), the Subject Property. Ford allowed five third-party service providers access to the property: DuPont, Allied Barton, Waste Management, Allied Automotive Group, and L-Z Trucking.
2. DuPont provided on-site expert assistance in formulating and mixing the paints applied to Ranger trucks.
3. Allied Barton provided security services.
4. Waste Management provided waste and scrap removal services.
5. Allied Automotive Group provided automotive transportation and related logistics services.
6. L-Z Trucking provided “upfitting” (customization) services to Ford fleet customers through contracts directly with those Ford customers.
7. Ford granted each of these five third-party service providers access to the TCAP solely to facilitate the provider's furnishing of services directly related to Ford's manufacturing enterprise on the Subject Property.
8. Access by three of the providers (DuPont, Allied Barton and Waste Management) was not granted by any written agreement. None of these providers paid any amount to Ford for access to, or use of, the TCAP.
9. Allied Automotive Group was granted access to the TCAP through a 2004 license agreement that required Allied to pay Ford a one-time $100 license fee.
10. The $100 license fee Allied paid Ford in 2004 did not create income to the Subject Property in that or any other year.
11. L-Z Trucking's access to the TCAP was not granted by a written agreement.
12. In August 2009, L-Z and TCAP personnel negotiated an oral agreement under which L-Z agreed to pay Ford a late fee of $0.50 per day for each Ranger truck ready to be upfitted for a Ford fleet customer, but which L-Z had not yet retrieved for customization.
13. Late charges for a given vehicle began to accrue when a Ford employee parked the Ford-owned vehicle in a specified parking lot on the TCAP near the paint building. Late charges terminated when L-Z retrieved the vehicle for upfitting.
14. Ford invoiced L-Z for $44, 697.50 in late fees (or “Ford plant parking charges”) incurred during 2009, and for $75, 791.00 incurred during 2010.
15. L-Z's late-fee payments to Ford constituted income to Ford's manufacturing enterprise conducted on the Subject Property rather than income to the Subject Property itself.
16. A robotics Training Center was located on the TCAP during the period in question.
17. In 1996, the Legislature appropriated $5 million from the general fund to design and build the Training Center. The Legislature made the $5 million appropriation contingent upon $1.6 million of non-state funding for robotics equipment, and provided that the completed Training Center would be run by a Board with representatives from four parties: the State, the Minnesota State Colleges and Universities (MnSCU), United Auto Workers (UAW) Local 879, and Ford.
18. The State and Ford entered into a 25-year Ground Lease related to the future Training Center dated February 13, 1997.
19. Under the Lease, Ford leased specified land on the TCAP to the State and furnished the $1.6 million in non-state funding necessary to purchase robotics equipment. The State undertook to design and build the Training Center at a cost of up to $5 million.
20. With respect to rent, the Lease provided:
21. The State paid Ford no rent under the lease.
22. The Lease provided Ford with an option to terminate that Ford could exercise at any time. If Ford exercised this option, it was required to pay the State a prorated share of the State's cost of building the Training Center.
23. A separate Use and Management Agreement also dated February 13, 1997, verified the parties' intention that “the Premises shall be used and managed to promote the best interests of all parties in providing high quality training and educational programs in the use of robotics methods in manufacturing....”
1. The presence of DuPont, Allied Barton and Waste Management on the TCAP did not render the Subject Property “income-producing” for purposes of Minnesota Statute section 278.05, subdivision 6 (2006, 2008 & 2012).
2. Neither Allied Automotive Group's presence on the TCAP nor the 2004 license agreement between Ford and Allied rendered the Subject Property income-producing for purposes of Minnesota Statute section 278.05, subdivision 6 (2006, 2008 & 2012).
3. Neither L-Z Trucking's presence on the TCAP nor the late-fee payments L-Z made to Ford during 2009 and 2010 rendered the Subject Property income-producing for purposes of Minnesota Statute section 278.05, subdivision 6 (2008 & 2012)
4. To the extent the County's motion to dismiss is based on the existence or terms of the Training Center Ground Lease, it is barred by the motion-filing deadline contained in the court's February 14, 2012 scheduling order.
5. The County's opening memorandum in support of its motion to dismiss affirmatively surrendered the opportunity to argue that the Ground Lease rendered the TCAP income-producing.
6. The Ground Lease did not render the Subject Property income-producing for purposes of Minnesota Statute section 278.05, subdivision 6 (2006, 2008 & 2012).
7. The early termination payment required by the Ground Lease was intended to compensate the State for loss of the possession and use of the Training Center facility. It does not represent, measure, or bear upon foregone “rent” for the State's use of the land beneath the Training Center.
8. Taken together, the Ground Lease and the parties' separate Use and Management Agreement created a joint venture between the State and Ford to construct and operate the Training Center.
9. The Ground Lease did not render the Subject Property income-producing because its true purpose was to serve as a means of contributing real property to a joint educational venture rather than to earn income for the use of Ford's real property.
The County's motion to dismiss is denied.
IT IS SO ORDERED.
This case involves the value of Ford's Twin Cities Assembly Plant (TCAP). Ford's property tax petitions for the January 2, 2006 through January 2, 2010 assessment dates have been consolidated.[1] The County brings a motion to dismiss alleging that Ford failed to comply with Minnesota Statutes section 278.05, subdivision 6 (2006, 2008 & 2012), the various applicable versions of which all require the disclosure of enumerated information concerning “income-producing” properties. Failure to make the specified disclosures requires dismissal. Id. Because we find that the Subject Property was not income-producing on any of the assessment dates, we conclude that section 278.05, subdivision 6, does not apply to any of Ford's petitions, and we deny the County's motion to dismiss.
During the period in question (2006 through 2011), Ford produced Ranger trucks at the TCAP. Ford also allowed certain third parties access to the property. The County alleges that the presence of third parties rendered the TCAP “income-producing” within the meaning of Minnesota Statutes section 278.05, subdivision 6
Ford painted Ranger trucks with paint purchased from DuPont.[2] To support its paint sales, DuPont provided on-site expert assistance at the TCAP in formulating and mixing the paints.[3] There was no written agreement giving DuPont access to the TCAP to provide this assistance, and Ford never received any payment from DuPont for any use of, or access to, the TCAP.[4]
Allied Barton provided security services at the TCAP. Ford permitted Barton access to an enclosed security monitoring station on the TCAP that also served as a sign-in desk.[5] Ford paid Barton a monthly fee for its services. There was no written agreement giving Barton access to the TCAP to perform security services, and Ford never received any payment from Barton for any use of, or access to, the TCAP.[6]
Waste Management provided waste and scrap removal services for the TCAP. Ford permitted Waste Management to park a small office trailer on the TCAP to manage the removal services.[7] Ford paid Waste Management a monthly fee for removal.[8] There was no written agreement giving Waste Management access to the TCAP, and Ford never received any payment from Waste Management for any use of, or access to, the TCAP.[9]
Allied Automotive Group provides automotive transportation services and related logistics services to automobile manufacturers.[10] In 2004, Allied and Ford entered...
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