Highland Park Women's Club v. Department of Revenue

• Decision Date: 06 December 1990
• Docket Number: 2-89-1243 and 2-89-1253,2-89-1230,Nos. 2-89-0935,2-89-0972,s. 2-89-0935
• Parties: , 151 Ill.Dec. 435 HIGHLAND PARK WOMEN'S CLUB, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, et al., Defendants-Appellants. RAVINIA FESTIVAL ASSOCIATION, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, et al., Defendants-Appellants. Paul E. HAMER, Plaintiff-Appellant, v. The DEPARTMENT OF REVENUE, et al., Defendants (Ravinia Festival Association, Defendant-Appellee).
• Court: United States Appellate Court of Illinois

Page 890

564 N.E.2d 890

206 Ill.App.3d 447, 151 Ill.Dec. 435

HIGHLAND PARK WOMEN'S CLUB, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, et al., Defendants-Appellants.

RAVINIA FESTIVAL ASSOCIATION, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, et al., Defendants-Appellants.

Paul E. HAMER, Plaintiff-Appellant, v. The DEPARTMENT OF REVENUE, et al., Defendants (Ravinia

Festival Association, Defendant-Appellee).

Nos. 2-89-0935, 2-89-0972, 2-89-1230, 2-89-1243 and 2-89-1253.

Appellate Court of Illinois Second District.

Dec. 6, 1990.

Rehearing Denied Jan. 24, 1991.

Paul E. Hamer, Northbrook, pro se.

Ernest Y. Ling, State's Atty. of Lake County, Waukegan, for Paul E. Hamer.

Neil F. Hartigan, Atty. Gen., Charles B. Hughes, William H. London, Tanya Solov (argued), Asst. Attys. Gen., Robert J. Ruiz, Sol. Gen., Chicago, for Illinois Dept. of Revenue.

Michael J. Waller, Ernest Y. Ling, State's Attys. of Lake County, Helen S. Rozenberg (argued), Chief, Civ. Div., Waukegan, for Lake County Bd. of Review.

Robert U. Dini, Ann L. Dwyer (argued), Law Offices of Robert U. Dini, Winnetka, for Highland Park Women's Club.

Todd M. Kossow, Terry Marcus, Michael Sennett (argued), Bell, Boyd & Lloyd, Chicago, for Ravinia Festival Ass'n.

Justice DUNN delivered the opinion of the court:

These consolidated appeals involve challenges by Lake County taxpayer Paul Hamer to exemptions from property taxation that had been granted to the Highland Park Women's Club (Women's Club or Club) and the Ravinia Festival Association (Ravinia). After hearings, the Department of Revenue (Department) decided that the Women's Club was no longer entitled to its exemption and Ravinia was not entitled to the exemption for a portion of its property but was for the remainder. In separate actions filed pursuant to the Administrative Review Law (Ill.Rev.Stat.1989, ch. 110, par. 3-101 et seq.), the circuit court of Lake County determined that Hamer lacked standing to challenge the exemptions. In the Ravinia case, the circuit court further determined that Ravinia was entitled to the exemption for all of the land in question. The issues common to these appeals are whether Hamer, who paid property taxes on his Lake County land, had standing to initiate complaints concerning property tax exemptions granted to other land owners and whether the Board and Department had jurisdiction even if Hamer lacked standing. In the Ravinia case, the parties contest whether Ravinia's property was entitled to an exemption from property taxation pursuant to section 19.7 of the Revenue Act of 1939 (Act) (Ill.Rev.Stat.1985, ch. 120, par. 500.7) on the basis that Ravinia is a charitable institution and the property is used for charitable purposes.

Paul Hamer filed complaints with the Lake County Board of Review (Board) challenging exemptions from property taxes that had been granted to the Women's Club and Ravinia for 1985. The Women's Club case involved a parcel of land which contained a one-story building that was used for club meetings. The Ravinia case involved a parcel containing Ravinia's administrative headquarters and a 36-acre parcel upon which concerts and other artistic events were presented. In both cases, the Board of Review recommended continuation of the exemptions but certified the matters to the Department for final decision pursuant to section 108(6) of the Act (Ill.Rev.Stat.1985, ch. 120, par. 589(6)). The initial ruling of the Department in both matters was to reverse the Board and deny the exemptions. The Women's Club and Ravinia requested and received full hearings from the Department pursuant to section 137 of the Act (Ill.Rev.Stat.1985, ch. 120, par. 618) following the initial rulings.

The testimony from the Women's Club hearing will not be set forth herein because it is not necessary to our resolution of that case. The administrative law judge (ALJ) who conducted the hearing ruled that Hamer had standing under sections 107 and 108(4) of the Act (Ill.Rev.Stat.1985, ch. 120, pars. 588, 589(4)) to bring a complaint about the Women's Club exemption. After hearing evidence concerning the nature of the organization and the use of the property, the ALJ ruled that the exemption should be denied.

The Women's Club then filed a complaint with the circuit court of Lake County pursuant to the Administrative Review Law (Ill.Rev.Stat.1989, ch. 110, par. 3-101 et seq.). The circuit court reversed the Department's decision on the basis that Hamer did not have standing to complain about the Club's exemption. The court ordered that the Women's Club parcel be restored to tax-exempt status. Hamer, the Department, and the Board now appeal from that order.

In the Ravinia case, the following facts were brought out before the ALJ at the Department's hearing. Ravinia is a not-for-profit corporation that was incorporated in 1936. According to its corporate charter, Ravinia was formed for the "promotion of musical and theatrical art and education for the benefit of the general public." Ravinia issues no stock, has no shareholders, and pays no dividends.

Until 1944, Ravinia leased a large parcel of land in Highland Park from Jewish Charities in Chicago in order to put on musical and theatrical presentations. In 1944, Jewish Charities conveyed the parcel to Ravinia with several conditions, including continued use of the land for presentation of concerts by outstanding symphony orchestras and other musicians of high artistic purpose, and for presentation of dramatic art. As of 1985, the 36-acre parcel, known as Ravinia Park, contained a pavilion area with a stage and seating for about 3,500 people, an indoor theater with seating for about 900 people, a lawn area with a capacity of about 20,000 people, some food concession buildings, a gift shop, and some parking lots.

Because most of Ravinia's artistic presentations are held outdoors on the stage in the pavilion area, the season during which these events are presented generally lasts about 11 or 12 weeks during the summer months. With the exception of graduation ceremonies from local high schools, from which Ravinia does not profit, Ravinia Park is not in use during the remainder of the year. In 1985, the Ravinia season lasted from June 28 until September 29. A variety of events were scheduled and held at Ravinia Park during that season including symphony orchestra concerts, other classical music presentations, pop and folk music concerts, jazz concerts, dance presentations, and plays. Featured performers included the Chicago Symphony Orchestra, Pinchas Zukerman, the San Francisco Ballet, and Peter, Paul, and Mary.

About 430,000 people attended events at Ravinia Park during the 1985 season. Admission to the lawn area was generally $4 or $5 for the performances. Sixty-two percent of Ravinia spectators had lawn admission in 1985. While performances could not be seen from this area, music from the concerts was piped into the lawn area from loudspeakers. Pavilion seating prices ranged from $10 to $30 depending upon the event and the location of the seat. Before the 1985 festival season began, Ravinia mailed out between 110,000 and 150,000 schedules of 1985 events to individuals on a mailing list and circulated numerous other schedules through the Chicago Tribune. Ravinia also advertised its schedule through other Chicago area newspapers.

Free lawn admissions to certain Ravinia events were offered to numerous groups through the Ravinia Opportunity Program. Each year, the chairman of the program contacts the United Way of Metropolitan Chicago to ask which of its member agencies might be interested in bringing groups to Ravinia performances free of charge. The specific agency is then contacted, and an event is selected. The chairman then sends the agency a letter authorizing the requested number of free lawn admissions to the event in question. In 1985, the Ravinia Opportunity Program provided 9,691 free admissions which were distributed among 162 agencies. The agencies in question brought disadvantaged youths, inner-city groups, senior citizens, and disabled persons to various Ravinia performances. Ravinia did not mention the possibility of obtaining free admission through the Opportunity Program in any of its advertising.

Additionally, if pavilion seating was not sold out for a particular performance, the seats would sometimes be distributed to senior citizens' groups free of charge. Uniformed armed service personnel were only charged $1 for lawn admission to all Ravinia events. Ravinia also presented special children's programs several times each season with a $1 admission charge to children and adults. Masters classes were offered at Ravinia in 1985 for advanced music students free of charge. These classes were taught by vocalists, violinists, or pianists, who had performed at Ravinia events.

In 1985, Ravinia had receipts of approximately $4,157,000, including some $3,800,000 from ticket sales. 1985 operating expenses for Ravinia totalled $6,536,562. The deficit was offset by approximately $2,265,000 in contributions and grants received in 1985 and a transfer of about $120,000 from an endowment fund.

The restaurants and food concession stands on the Ravinia Park grounds were operated by the Levy Brothers organization pursuant to a license agreement with Ravinia. While Ravinia received money from Levy Brothers pursuant to the agreement, it did not realize any profit because it was obliged to pay insurance and maintenance costs for these areas. Ravinia broke even as a result of the food concession stands and restaurants, which were only open during Ravinia performances.

The Women's Board of Ravinia ran a gift shop at Ravinia Park. The shop sold shirts and other souvenirs bearing the name "Ravinia." Profits were realized from the gift shop and were turned over to Ravinia. Ravinia also claimed an exemption for the parcel containing its administrative office building. This parcel is located in Highland Park...