Prior Aviation Service, Inc. v. Board of Assessors of Town of Cheektowaga

• Decision Date: 12 December 1974
• Citation: 362 N.Y.S.2d 623,46 A.D.2d 219
• Parties: Petition of PRIOR AVIATION SERVICE, INC., Respondent, v. The BOARD OF ASSESSORS OF the TOWN OF CHEEKTOWAGA et al., Appellants, and Cheektowaga-Maryvale Union Free School District, Intervenor-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 623

362 N.Y.S.2d 623

46 A.D.2d 219

Petition of PRIOR AVIATION SERVICE, INC., Respondent, v. The BOARD OF ASSESSORS OF the TOWN OF CHEEKTOWAGA et al Appellants, and Cheektowaga-Maryvale Union Free School District, Intervenor-Appellant.

Supreme Court, Appellate Division, Fourth Department.

Dec. 12, 1974.

John V. Rogowski, Buffalo (Stephen H. Kelly, Buffalo, of counsel), for appellants.

Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo (Stephen H. Kelly, Buffalo, of counsel), for intervenor-appellant.

Robert J. Stein, Buffalo, for respondent.

Before WITMER, J.P., and MOULE, CARDAMONE, MAHONEY and DEL VECCHIO, JJ.

OPINION

WITMER, Justice Presiding:

The Town of Cheektowaga (Town), through its Board of Assessors and Board of Assessment Review, and the Cheektowaga-Maryvale Union Free School District (School) appeal from the judgment of the Supreme Court, Special Term, in Erie County determining that certain buildings of petitioner corporation are exempt from taxation and directing that appellants' assessment rolls be so marked for future years.

The buildings in question were erected on airport land which was formerly owned by the City of Buffalo. While so owned, the City entered into an agreement on June 6, 1952 with the Town and School whereby the real estate was exempted from taxation for 20 years, until June 30, 1972 for the School and until June 30, 1972 for the School and until December 31, 1972 for the Town. The agreement specified that 'improvements made to or erected on said aviation field during the existence of this agreement or any facilities installed or erected during the existence of this agreement to meet the needs of scheduled and non-scheduled air transportation * * * will be exempted * * *'. The agreement further provided that if any building were erected 'for the occupation and use by a private person, firm * * * or corporations and from which building or addition * * * the City will derive revenue * * * (it) shall not be exempted * * *.' It was also provided as a limitation of the latter clause that, 'it being the intent of the parties hereto that the construction of any new Administration Building by the party of the first part will nevertheless be exempted from the payment of taxes * * * during the existence of this agreement without regard as to whether or not the City will derive revenue from leasing portions of said Administration Building'. In part consideration for the agreement the City agreed to pay in lieu of taxes the sum of $15,000 to the Town annually on February 15 through February 15, 1972, and to pay $35,000 to the School annually on October 15 through October 15, 1971. It was provided that if the City conveyed away the land, it would be released from the obligations to pay, but the agreement would otherwise continue in effect and the grantee would assume the obligations to make the payments in lieu of taxes.

In 1957 and in 1969 the City of Buffalo conveyed the airport to Niagara Frontier Port (and Transportation) Authority (Niagara) subject to the above agreement. Subdivision 1 of section 1299--c of the Public Authorities Law provides that, '(t)here is hereby created the 'Niagara Frontier transportation authority'. The authority shall be a body corporate and politic constituting a public benefit corporation.' Section 1299--o of that law provides that the real property of Niagara shall be tax exempt. In November, 1969 Niagara leased part of this airport land to petitioner for a period of 20 years, which then built buildings and facilities thereon which it uses in connection with the airport operation. These are not part of the Administration Building referred to in the agreement. Petitioner owns these buildings apart from the leased land. Petitioner's business consists of providing fuel service, caterer service and other types of service to all airlines which use the airport and wish petitioner's services; and it also performs mail service.

For the tax year of 1972--1973 the Town placed an assessment on these buildings in the sum of $60,000. Petitioner brought this proceeding to vacate the tax levied upon the assessment, claiming that under the agreement the buildings are exempt from taxation (presumably so long as the annual payments of $15,000 and $35,000 are made by Niagara). Alternatively, petitioner sought a downward adjustment of the assessment on the ground that it was unequal compared with assessments upon its competitors similarly situated.

The Town and School, appellants, contend that (1) the agreement only exempts buildings owned by Niagara and (2) in no event can the court declare the property exempt from taxes for future years. It is acknowledged that the tax assessment date each year was June 1. Appellants further assert that even if the agreement were held to entitle petitioners to an exemption during the 20 years of the lease of June 6, 1952, that would only give petitioner an exemption with respect to the taxes for 1972 and none thereafter.

We start with the proposition that the fact that the land upon which petitioner erected these buildings is tax exempt does not relieve it in any way from liability to pay taxes on the buildings which it owns and which appellants have assessed (Matter of National Cold Stor. Co. v. Boyland, 16 A.D.2d 267, 227 N.Y.S.2d 147, affd., 12 N.Y.2d 808, 236 N.Y.S.2d 62, 187 N.E.2d 129). It is also fundamental tax law that, '(a)ll real property within the state shall be subject to real property taxation * * * unless exempt therefrom by law' (Real Property Tax Law, § 300; Matter of City of Lackawanna v. State Bd. of Equalization & Assessment of State of N.Y., 16 N.Y.2d 222, 230, 264 N.Y.S.2d 528, 534, 212 N.E.2d 42, 46; 16 McQuillin, Municipal Corporations, §§ 44.42 and 44.63; 44.66; 44.67; 44.71).

Petitioner contends that these buildings are exempt from taxation by reason of the contract of June...