Providence Place Grp. Ltd. P'ship v. State
| Citation | 266 A.3d 1231 |
| Decision Date | 25 January 2022 |
| Docket Number | A.A. 07-173,No. 2019-298-M.P.,2019-298-M.P. |
| Parties | PROVIDENCE PLACE GROUP LIMITED, PARTNERSHIP, et al. v. STATE of Rhode Island, acting BY AND THROUGH DIVISION OF TAXATION. |
| Court | Rhode Island Supreme Court |
Ryan M. Gainor, Esq., Gerald J. Petros, Esq., for Plaintiffs.
Matthew R. Cate, Esq., Bethany M. Whitmarsh, Esq., for Defendant.
Present: Goldberg, Robinson, Lynch Prata, and Long, JJ.
Justice Lynch Prata, for the Court.
This case came before the Supreme Court on November 3, 2021, pursuant to a writ of certiorari issued upon petition by the defendant, the State of Rhode Island Department of Revenue, acting by and through Division of Taxation (the state or defendant), seeking review of a District Court judgment granting summary judgment in favor of the plaintiffs, Providence Place Group Limited, Partnership (PPG) and Rouse Providence LLC (Rouse) (collectively plaintiffs). The defendant asserts that the District Court erred in granting summary judgment by (1) weighing conflicting evidence and deciding issues of fact; (2) failing to address the issue of assignability or transferability of tax exemptions; and (3) failing to construe and apply the tax-exemption provisions of the Rhode Island Commerce Corporation Act, G.L. 1956 chapter 64 of title 42 (the CCA), so as to not violate the nondelegation doctrine of the Rhode Island Constitution. For the reasons set forth herein, we affirm the judgment of the District Court.
Facts and Travel
In 1995 the General Assembly enacted G.L. 1956 chapter 63.5 of title 42 (the mall act), authorizing a public investment in the development of the Providence Place Mall and an associated parking garage (the mall). See P.L. 1995, ch. 400, § 1. The General Assembly found that the construction of the mall would "be a cornerstone in the continuing revitalization of a blighted portion of the urban core" of the City of Providence (the city) and would improve existing public investments made in the city. Section 42-63.5-2(16). The General Assembly further declared that the mall would "create significant job opportunities during construction and retail jobs thereafter[,]" thereby alleviating the "chronic unemployment and underemployment[,]" which the General Assembly found existed in the state and the city. Section 42-63.5-2(2).
Concomitant with these findings, the General Assembly recognized that the development of the mall involved "formidable challenges * * * and impose[d] * * * extraordinary construction expenses," § 42-63.5-2(19), such that "the developer [would] be required to expend substantial private funds[.]" Section 42-63.5-2(5). As such, the General Assembly found that "a public investment to help defray those extraordinary expenses [was] required in order to induce the substantial private investment and the myriad public benefits[.]" Section 42-63.5-2(19). In December 1995, the state, acting through the Rhode Island Economic Development Corporation (EDC),1 authorized PPG to develop and operate the mall.
In addition to creating the mall act, the General Assembly also amended certain provisions of the CCA, and extended EDC tax exemptions to the real or personal property of EDC projects where legal title to the property was held in the name of another entity. See § 42-64-20; see also P.L. 1995, ch. 400, § 4. Specifically, § 42-64-20(c) provides in part that:
(Emphasis added.)
Following the passage of these statutes, and pursuant to the mall act, PPG purchased a parcel of land in Providence for $11,100,000, and thereafter conveyed the land to the EDC for $1. On September 9, 1996, PPG and the EDC executed a ground lease for a term of ninety-nine years (the ground lease). The ground lease provided for four successive options to extend its terms for ninety-nine years each, for a possible total of 495 years. The ground lease also granted legal title to the mall to PPG until the ground lease was terminated or expired. PPG was prohibited from assigning any of its rights in the ground lease without the EDC's consent until either final completion of the mall was achieved or July 1, 2001, whichever occurred later. Thereafter, PPG could assign its rights in the ground lease, provided two conditions were met: (1) The assignee assumed PPG's obligations, and (2) the transfer was to a qualified mall owner or operator.
In March 2004, PPG transferred its interest in the mall to Rouse. The state asserts that, prior to the scheduled transfer, the city inquired of the state as to whether the transfer would be subject to the conveyance tax.2 In response, PPG, Rouse, defendant, and the city entered into a memorandum of agreement (MOA) whereby plaintiffs agreed to pay the conveyance tax to expediently transfer the mall, but reserved the right to resolve the tax issue after closing.
In June 2004 plaintiffs filed a request for refund and petition for declaratory ruling with defendant with respect to the conveyance tax paid pursuant to the MOA. Thereafter, the EDC obtained a written legal opinion confirming that the mall ceased being a "project" of the EDC upon final completion, as defined by the ground lease. According to defendant, because the mall was no longer an EDC project, the tax benefits afforded to it by § 42-64-20 had expired.3 On May 22, 2006, the request for refund was denied by the chief revenue agent for the state for the same reasons given in the EDC's legal opinion. Subsequently, plaintiffs requested an administrative review and, on November 1, 2007, the state tax administrator issued a final decision and order denying the refund. The plaintiffs filed a timely administrative appeal with the Sixth Division District Court pursuant to G.L. 1956 § 8-8-24.
The plaintiffs filed a motion for summary judgment in District Court almost ten years later, on November 6, 2017. The delay was apparently due to a bankruptcy filing by Rouse's parent company. On May 14, 2019, the District Court issued a written decision and order granting plaintiffs' motion for summary judgment. The District Court judge found—based on legislation passed by the General Assembly, resolutions passed by the board of directors of the EDC with respect to the mall (the EDC resolutions), and the ground lease—that "the transfer of interest in the lease entered into by the EDC and PPG in September 1996 is not subject to the conveyance tax under § 44-25-1(a) because of a tax exemption granted through action by the Board of Directors of the EDC." Final judgment entered on July 24, 2019, in favor of plaintiffs in the amount of $2,029,000 plus interest. Thereafter, defendant filed a petition for a writ of certiorari with this Court for review of the final judgment, which we granted on September 16, 2020.
Standard of Review
"This Court reviews the granting of summary judgment de novo and applies the same standards as the motion justice." Belmore v. Petterutti , 253 A.3d 864, 867 (R.I. 2021) (quoting Holley v. Argonaut Holdings, Inc. , 968 A.2d 271, 274 (R.I. 2009) ). "[W]e view the evidence in the light most favorable to the nonmoving party, and if we conclude that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law, we will affirm the judgment." Citizens Bank, N.A. v. Palermo , 247 A.3d 131, 133 (R.I. 2021) (quoting Boudreau v. Automatic Temperature Controls, Inc. , 212 A.3d 594, 598 (R.I. 2019) ). "Although summary judgment is recognized as an extreme remedy, to avoid summary judgment the burden is on the nonmoving party to produce competent evidence that proves the existence of a disputed issue of material fact." Lowney v. Canteen Realty, LLC , 252 A.3d 259, 261-62 (R.I. 2021) (quoting Ballard v. SVF Foundation , 181 A.3d 27, 34 (R.I. 2018) ).
Discussion
The defendant argues that the District Court judge erred by improperly weighing conflicting evidence; failing to address the issue of assignability or transferability of tax exemptions; and failing to construe and apply § 42-64-20(c) so as to not violate the nondelegation doctrine of the Rhode Island Constitution. We shall address these contentions seriatim.
Tax-Exempt Status of the Mall
The defendant contends that the trial judge erred when he weighed conflicting evidence and compared various provisions of the general laws, the ground lease, and the EDC resolutions. The defendant maintains that, based on the ground lease and the EDC resolutions, the EDC tax exemption expired when the mall ceased being an EDC project, which defendant argues occurred upon completion of construction and issuance of certificates of occupancy.
Despite the state's contentions, we conclude that, to determine the tax-exempt status of the mall, this Court need not look further than the plain and unambiguous language of the mall act. It is well-settled that in construing statutes "our ultimate goal is to give effect to the General Assembly's intent[.]" Mutual Development Corporation v. Ward Fisher & Company, LLP , 47 A.3d 319, 328 (R.I. 2012) (quoting DeMarco v. Travelers Insurance Co. , 26 A.3d 585, 616 (R.I. 2011) ). This Court has recognized that "[t]he best evidence of such intent can be found in the plain language used in the statute." Martone v. Johnston School Committee , 824 A.2d 426, 431 (R.I. 2003). Thus, if the language of a statute is clear and unambiguous, "this Court must interpret the statute literally and must give the words of the statute their plain and ordinary meanings." State v. Diamante , 83 A.3d 546, 548 (R.I. 2014) (quoting Accent Store Design, Inc. v. Marathon House, Inc. , 674 A.2d 1223, 1226 (R.I. 1996) ).
Here, the General Assembly's intent that the mall shall continue to exist as an EDC project post-construction...
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