Lasell Village v. Bd. of Assessors of Newton

• Decision Date: 21 September 2006
• Docket Number: No. 05-P-528.,05-P-528.
• Citation: Lasell Village v. Bd. of Assessors of Newton, 854 N.E.2d 119, 67 Mass. App. Ct. 414 (Mass. App. 2006)
• Parties: LASELL VILLAGE, INC. v. BOARD OF ASSESSORS OF NEWTON.
• Court: Appeals Court of Massachusetts

854 N.E.2d 119

67 Mass. App. Ct. 414

LASELL VILLAGE, INC. v.BOARD OF ASSESSORS OF NEWTON.

No. 05-P-528.

Appeals Court of Massachusetts, Suffolk.

Argued February 6, 2006.

Decided September 21, 2006.

COPYRIGHT MATERIAL OMITTED

James J. Marcellino, Boston, for the taxpayer.

John M. Lynch, Boston (Stephen W. Decourcey with him) for the Board of Assessors of Newton.

Present: PERRETTA, KAFKER, & GREEN, JJ.

PERRETTA, J.

Lasell Village, Inc.(Lasell), owns and operates a continuing care retirement community (the Village) situated on land leased to it by Lasell College (the college).Village residents were, as of 2001, required to participate annually in various educational activities offered by the college and Lasell.When, for fiscal year 2002, the board of assessors of Newton (assessors) assessed a tax on the real estate being used and occupied by the Village, Lasell applied for an abatement from the Appellate Tax Board(the board).On appeal from the board's denial of the application, Lasell argues that the Village is a charitable institution devoted to educational purposes and was, therefore, exempt from taxation under G.L. c. 59, § 5, Third, for the fiscal year in issue.We affirm the decision of the board.

1.The relevant facts.¹Lasell presented its case to the board through numerous exhibits and the testimony of five witnesses: (1)Thomas DeWitt, the president of the college; (2)Dr. Paula Panchuk, the academic dean of the college; (3)Dr. Phyllis Moen, whose testimony was proffered as that of an expert for purposes of establishing the beneficial impact of the educational programs offered Village residents; (4) a Village resident; and (5) a former student at the college.There was also evidence to show that Lasell is a Massachusetts nonprofit corporation organized under G.L. c. 180.Its restated articles of organization declare that it was formed "[t]o develop and provide . . . residential and non-residential educational programs for elderly persons . . . instruction for students at Lasell College in the gerontological aspects of certain areas of study . . . [and][to] sponsor and encourage . . . research into the cognitive, emotional and physical needs and capabilities of the elderly [incorporating] the results of such research into [Lasell's] educational programs for the elderly and for the students at Lasell College."

The Village is located on a thirteen-acre parcel of land that Lasell leases from the college.It is a fourteen-building complex containing a total of 162 independent living units (ILUs) as well as a forty-four bed nursing facility called Lasell House.Each ILU is fully functional as a private residence.In addition to living quarters, Lasell provides Village residents with meals and various housekeeping services, e.g., repair and maintenance, trash removal, and local transportation, as well as some health services.

Because Lasell's residential service model contemplated that persons entering its retirement community would be lifetime residents, it provided residents with a variety of benefits, some of which required additional fees, and a continuum of care arrangements up to and including longterm care in Lasell House.In order to become a resident of the Village, an applicant was required to be a high school graduate of at least sixty-five years of age and in sufficiently good health as to be able to perform, without assistance, the activities of daily living.Residents paid a one-time entrance fee as well as a monthly service fee which was calculated on the basis of the size of the ILU and the various benefits afforded a resident of any particular ILU.

As of July 1, 2001, entrance fees ranged from $197,000 to $790,000, and basic monthly service fees totaled between $1,733 to $4,751.Prospective residents were required to demonstrate ownership of assets valued at twice the amount of the entrance fee associated with the selection of any particular ILU and receipt of stable income in an amount equal to twice the amount of the monthly fees.Residents were also required to maintain, at their own expense, Medicare health insurance and at least one other supplemental health insurance policy approved in writing by Lasell.

Lasell styled and marketed the Village as a living and learning retirement community.As a condition of residency, residents agreed to participate annually in 450 hours of approved educational activities; that is, approximately one hour and fifteen minutes each day.Under Lasell's residency and care agreement, an intentional failure to fulfil this educational requirement for one calendar year was a ground for removal of the resident from the Village.However, residents could be temporarily or permanently exempted from the educational requirement upon a physician's certification of a physical or mental inability to participate.Although residents of Lasell House and other residents were excused from participation, the rest of the residents were expected to maintain a record of the time spent in educational activities.Lasell conducts a biannual "countdown," a process during which residents collect their records and report to Lasell the total number of hours spent in meeting the educational requirement.²

Educational services were to be provided to residents of the Village by the college pursuant to an educational services agreement between Lasell and the college.According to the terms of that agreement, Village residents are allowed to enroll in the college's undergraduate courses and to use various facilities of the college, e.g., the library, the computer laboratory, and athletic equipment, as well as various other amenities made available by the college to its students.³Lasell also offers Village residents an on-site program of noncredit courses, discussion groups, lectures, and physical fitness classes.⁴These classes and discussion groups are conducted once a week for a period of about one to two hours and are led by college faculty members or students as well as some residents and cover a broad range of topics, such as writing, literature, drama, music, mythology, current events, and contemporary social issues.⁵Neither examinations nor grades are involved in the on-site educational program.

All on-site lectures as well as some of the other courses were offered under the auspices of the "Lasell Institute for Learning in Retirement"(the Institute).Membership in the Institute was one of the basic educational services afforded to all Village residents as well as to the residents of Newton who choose to become members of the Institute.A one-year membership in the Institute cost $100, but waivers of that fee were available.The Institute annually serves about twenty members of the community.

Village residents could fulfil their education requirement through participation in any of Lasell's formal education programs offered by the college.They could also receive credit by undertaking activities outside those formal programs.⁶As broadly defined by Lasell, education includes independent, self-directed endeavors, cultural activities, physical exercise, paid work, and community service.As implemented, Lasell's educational program gives credits to residents for visiting museums, attending concerts, viewing nature exhibits, traveling, gardening, sculpting, stretching, walking, swimming, playing tennis, and assisting other residents in preparing their tax returns.

There was also evidence to show that Lasell has served as a host site for the college's undergraduate interns and honor students who interacted with the residents in accordance with "periodically" devised assignments of their professors.In October of 2001, Lasell hosted a conference entitled "Redefining Retirement Communities."

Lasell also put before the board evidence of historic facts that it claims are relevant to its appeal.In 1991, the college and the city of Newton(the city) entered into an agreement for judgment (the agreement) in settlement of a zoning dispute concerning the property in issue.In the agreement, the city stipulated that Lasell's proposed project, Lasell Village, was, as described in the agreement, a "non-profit educational community" and a protected educational use for purposes of G.L. c. 40A, § 3.The agreement also expressly provided that it "is intended to deal solely with the application of [Newton's zoning] Ordinance to Lasell Village," and that nothing therein "relieve[s] Lasell College or Lasell Village from complying with any other [applicable] . . . state or local laws, statutes, regulations, or ordinances."Pursuant to a provision of the agreement, the college and the city also executed an agreement for payments in lieu of taxes, a so-called "PILOT" agreement.

Further, in an unpublished memorandum and order, Lasell College v. Newton,36 Mass.App.Ct. 1122, 635 N.E.2d 277(1994), we affirmed a determination of the Land Court that Lasell was a nonprofit educational corporation and that its proposed project, Lasell Village, constituted a protected educational use for purposes of G.L. c. 40A, § 3.

2.The applicable law.General Laws c. 59, § 5, Third, exempts from local taxation "real estate owned by . . . a charitable organization and occupied by it or its officers for the purposes for which it is organized."⁷SeeHarvard Community Health Plan, Inc. v. Assessors of Cambridge,384 Mass. 536, 541, 427 N.E.2d 1159(1981).As explained in Massachusetts Med. Soc. v. Assessors of Boston,340 Mass. 327, 332, 164 N.E.2d 325(1960):

"An institution will be classed as charitable if the dominant purpose of its work is for the public good and the work done for its members is but the means adopted for this purpose.But if the dominant purpose of its work is to benefit its members or a limited class of persons it will not be so classed, even though the public will derive incidental benefit from such work."

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