Columbus City School District Board of Education v. Zaino

Per Curiam.

In 1986, the city of Columbus passed Ordinance 1891-86 authorizing the mayor to enter into an agreement with appellant, 1-670 Corridor Development Corporation (“1-670”), designating 1-670 “an agency and instrumentality for economic development including land use planning and marketing strategy,” for a designated area. 1-670 is a private, not-for-profit corporation under R.C. Chapter 1702, and a 501(c)(3) corporation under the Internal Revenue Code.

*497 1-670 and the city entered into a loan agreement in 1990 whereby the city loaned 1-670 money to purchase property for a mixed-use business park. Using this money, 1-670 purchased 14.92 acres of land near Joyce Avenue and Bliss Street in Columbus from the Consolidated Railway Corporation in 1992. 1-670 took title to the property in its own name. After constructing streets and sewers, 1-670 sold this property in 1996%

In 1995,1-670 filed an application with the appellee Tax Commissioner, seeking real property tax exemption for this property for tax year 1995 and remission of taxes for 1993 and 1994.

The Tax Commissioner granted the exemption and remission under R.C. 5709.08. However, the Columbus Board of Education (“BOE”), appellant, appealed the Tax Commissioner’s decision to the Board of Tax Appeals (“BTA”).

The BTA found that “the property in question was acquired by 1-670 Corporation in its capacity as an agent and instrumentality of the city of Columbus, per Columbus City Ordinance No. 1891-86.” The BTA found that the “property in question constitutes public property.” The BTA also found the property to be used exclusively for a public purpose and therefore affirmed the Tax Commissioner’s decision.

The cause is now before this court upon an appeal as of right.

The BTA exempted this property under R.C. 5709.08, which provides: “Real or personal property belonging to the state or United States used exclusively for a public purpose, and public property used exclusively for a public purpose, shall be exempt from taxation.”

For property to be exempt under R.C. 5709.08, (1) it must be public property, (2) it must be used for a public purpose, and (3) the use must be exclusively for a public purpose. Carney v. Cleveland (1962), 173 Ohio St. 56, 18 O.O.2d 256, 180 N.E.2d 14, paragraph one of the syllabus.

The BOE contends that the property owned by 1-670 is not public property. We agree.

In reviewing decisions of the BTA, we determine whether the BTA’s decision is reasonable and lawful. Summit United Methodist Church v. Kinney (1983), 7 Ohio St.3d 13, 15, 7 OBR 406, 407, 455 N.E.2d 669, 670. We stated our role in Strongsville Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (1997), 77 Ohio St.3d 402, 405, 674 N.E.2d 696, 699:

“[W]e affirm the BTA’s basic factual findings if sufficient, probative evidence of record supports these findings. We also affirm the BTA’s rulings on credibility of witnesses and weight attributed to evidence if the BTA has exercised sound discretion in rendering these rulings. Finally, we affirm the BTA’s findings on ultimate facts, i.e., factual conclusions derived from given basic facts, Ace Steel *498 Baling, Inc. v. Porterfield (1969), 19 Ohio St.2d 137, 142, 48 O.O.2d 169, 171-172, 249 N.E.2d 892, 895-896, if the evidence the BTA relies on meets these above conditions, and our analysis of the evidence and reading of the statutes and case law confirm its conclusion.”

Ordinance- 1891-86, appointing 1-670 an agent of the city, sets forth the agreement of the parties. Paragraph two of the agreement states that 1-670 “will constitute and act as an agent of the City for overall economic development including land use planning and marketing strategy within its territorial jurisdiction.” Paragraph three states that the purpose of having designated 1-670 an agent is “(A) to create jobs and employment opportunities and to improve the economic welfare of the people of the City and the State of Ohio; (B) to encourage and cause the maintenance, location, relocation, construction, expansion, modernization and equipment of sites, buildings, structures and appurtenant facilities for industrial, commercial distribution and research activities * * *; and (C) to maintain and increase the tax valuation of property located therein in order that tax revenues may be available to provide services * *

Paragraphs four through sixteen set forth agreements dealing with 1-670’s powers and duties. 1-670 was to make recommendations for actions to be taken in aid of development, including: “the location, relocation, construction, extension, modernization, modification or improvement of public utility or municipal facilities or services.” In addition, 1-670 was authorized to advertise; solicit businesses to relocate to the area; serve as a clearinghouse for information; “initiate, review, and recommend criteria and programs for the preservation, development and enhancement” of the area; recommend priorities for government services in the 1-670 area; and meet with applicants for permits.

While the ordinance appoints 1-670 an agent for the city for certain express purposes, it does not appoint 1-670 an agent for all purposes. In particular, the ordinance does not authorize 1-670 to act as an agent for the purchase of real property. In Master Consol. Corp. v. BancOhio Natl. Bank (1991), 61 Ohio St.3d 570, 574, 575 N.E.2d 817, 820, we quoted the following passage from Stevens v. Frost (1943), 140 Me. 1, 7, 32 A.2d 164, 168: “ ‘Express authority is that authority which is directly granted to or conferred upon the agent or employee in express terms by the principal, and it extends only to such powers as the principal gives the agent in direct terms; and the express provisions are controlling where the agency is expressly conferred.’ ”

The question of whether 1-670 acted as an agent for the city in the purchase of the property is a question of ultimate fact. In SFZ Transp., Inc. v. Limbach (1993), 66 Ohio St.3d 602, 604-606, 613 N.E.2d 1037, 1039-1040, we reversed a BTA finding on an ultimate fact because the given basic facts did not support the finding on this ultimate fact. Likewise in this case, the BTA’s inference of *499 ultimate fact that 1-670 acted as the city’s agent when it purchased the property is not supported by the basic facts. There is no evidence that the city authorized 1-670 to act as its agent for the purchase and sale of the property in question.

For property to be considered public property under R.C. 5709.08 requires that there be ownership “by the state or some political subdivision thereof, and title to which is vested directly in the state or one of its political subdivisions, or some person holding exclusively for the benefit of the state.” Dayton Metro. Hous. Auth. v. Evatt (1944), 143 Ohio St. 10, 27 O.O. 557, 53 N.E.2d 896, paragraph one of the syllabus. The requirement that the property be public property has not been met here. Title to the property in question was not vested directly in state or one of its subdivisions or by some person holding exclusively for the benefit of the state.

Accordingly, we hold that the decision of the BTA is unreasonable and unlawful, and it is hereby reversed.

Decision reversed.

Moyer, C.J., Douglas, Resnick and F.E. Sweeney, JJ., concur. Cook, J., concurs in judgment only. Pfeifer and Lundberg Stratton, JJ., dissent.