Bay Path College v. Board of Assessors of the Town of Longmeadow (July 11, 2001)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

BAY PATH COLLEGE  		   v.  	BOARD OF ASSESSORS OF  
							THE TOWN OF LONGMEADOW
Docket No. F257375			     Promulgated:
						     July 11, 2001

This is an appeal under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate taxes on certain real estate in the Town of Longmeadow owned by and assessed to the appellant for fiscal year 2000.
Commissioner Egan heard the appeal and was joined in the decision for the appellant by Chairman Burns and Commissioners Scharaffa, Gorton and Rose.
	These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.


James F. Martin, Esq. and Bruce E. Devlin, Esq., for the appellant.

David J. Martell, Esq., for the appellee.


FINDINGS OF FACT AND REPORT
	The issue in this appeal is whether the Assessors of the Town of Longmeadow (the "Assessors") properly assessed real estate taxes for fiscal year 2000 on certain property known as "South Campus" owned by Bay Path College and separated from what is referred to as "Main Campus" by a third of a mile of residential property.  On the basis of a stipulation of facts and testimony and exhibits introduced at the hearing of this appeal, and reasonable inferences drawn therefrom, the Appellate Tax Board ("Board") made the following findings of fact.
	A portion of the South Campus, located at 33 Farmlea Road, consists of a residence occupied by the Bay Path College athletic director.  This residence is contiguous to and overlooks approximately twelve acres of land, which is owned by the appellant and used for its athletic fields.  For fiscal year 2000, the Assessors valued the 33 Farmlea Road parcel at $301,700.00 and assessed to the appellant a tax thereon, at the rate of $19.08 per thousand, in the amount of $5,756.44.  The Assessors conceded that the remainder of the South Campus property is exempt from real estate taxation.  The appellant timely paid the tax assessment in full without incurring any interest.  On February 11, 2000, on or before the last day for payment of the actual tax bill, the appellant timely applied in writing for an abatement of the tax due on the subject parcel.  The Assessors denied this application on April 10, 2000.  Thereafter, the appellant seasonably filed an appeal with the Board.  On this basis, the Board found that it had jurisdiction over this appeal.   
Bay Path College (the "College") is a four-year women's educational institution, founded in 1897, with its Main Campus located on Longmeadow Street in Longmeadow.  The College qualifies as a tax-exempt corporation pursuant to Internal Revenue Code Section 501(c)(3) and is a non-profit entity organized under chapter 180 of the Massachusetts General Laws.  The Main Campus is a single parcel of land, with the exception of the College's library, which is located on the opposite side of Longmeadow Street.  The Main Campus, which contains the classrooms and dormitories, is exempt from real estate taxation as property owned and occupied by a charitable institution.      
On May 15, 1997, the College purchased a second parcel of land in Longmeadow, located at 33 and 45 Farmlea Road, including the athletic fields which abut those addresses.  This parcel of land, referred to as South Campus, is approximately twelve acres in size and is separated from Main Campus by about a third of a mile of residential property.   At the hearing of this appeal, the College Vice
President of Finance, Rachel St. Onge-Doisseau, testified that South Campus is accessible from the Main Campus by an easy walk down residential and scenic Longmeadow Street.  
South Campus is used exclusively for athletic activities run by the College.  Prior to its purchase of South Campus, the College had to use fields outside of its campus to provide intramural and other athletic facilities for its students.  Ms. St. Onge-Doisseau testified that the purchase of South Campus was essential to the College's admission to the National College Athletic Association ("NCAA") Division III.  Admission to the NCAA, she explained, was essential to the College's mission of educating young women, especially since other women's colleges offered competitive athletic programs.
The athletic fields of South Campus are used by the students for intercollegiate and intramural athletic events, and the house at 45 Farmlea Road is used by the College as a club house for meetings for its athletic teams and for the storage of athletic equipment.  The second house, at 33 Farmlea Road, is used as a residence for the College's athletic director.  The Assessors exempt from real property taxation all of the South Campus with the exception of 33 Farmlea Road, which serves as the athletic director's residence.
The College hired a full-time athletic director when it acquired South Campus and applied for NCAA Division III status.  According to his job description, as testified to by Ms. St. Onge-Doisseau and as outlined in an employment letter submitted as evidence, the athletic director is required to live at 33 Farmlea Road as a condition of his employment.  The athletic director paid a reduced rent for the house, $1,200 per month, which rate was reduced even further to $1,000 per month when he assumed the duties of caretaker of the athletic fields in addition to his duties as the athletic director.  At the time of the hearing on this appeal, the rental rate for the residence was set at $1,050.  
The athletic director's job description as caretaker, as outlined in an employment letter, included the following duties: watering plants at both houses and a "perennial bed" near the garage; blowing leaves in the fall for both houses; removing litter or debris from all properties; shoveling steps and sidewalks; marking and striping fields for games; and ensuring proper usage of the fields by authorized parties and reporting unauthorized usage to Campus Public Safety or Longmeadow Police.  The College provided the equipment to perform these duties.  The athletic director was also required to monitor and patrol the property on a regular basis to create a presence on the all-women's campus, as well as to insure against hazards that could be caused by damaged or misplaced equipment.  There was also evidence presented at the hearing that the athletic director was trained in first aid.  
Ms. St. Onge-Doisseau testified, and the Board found, that the rent paid by the athletic director was well below the market rate for comparable property, and that the College derived no income from this rent.  Since it had acquired the house, the College had replaced the boiler and the roof, and at the time of the hearing, the College was in the process of installing insulation and siding on the house.  The Board found that, as testified to by Ms. St. Onge-Doisseau, the College was not covering its cost of operating the house, nor was it the College's intent to do so: "[t]he purpose of having the athletic director live there far outweighs the additional costs we are incurring." 
Ms. St. Onge-Doisseau  also testified, and the Board found, that the athletic program at the College was "key to [its] ability to compete with other women's colleges."  Moreover, being able to host its own athletic events was essential to the College acquiring NCAA Division III status.  The Board found that NCAA Division III status enhances the College's mission of educating women, especially given the competition the College faces from other women's colleges.  The Board also found that having the residence for the full-time athletic director on South Campus is essential to the College's efficient operation of its athletic program.  The residency by an individual trained in first aid insures a quick response to any health issue that may arise on the athletic fields while students are practicing or exercising for recreation.  The Board also found that the athletic director's constant presence and monitoring furthers the charitable purposes of the women's College by insuring the maintenance of equipment and playing fields, as well as the safety of the campus against intruders.  Moreover, the constant presence of a faculty member also enables the College to maintain good relations with its residential neighbors by insuring that the South Campus remains peaceful.
Therefore, for the foregoing reasons, as well as those stated in the Opinion which follows, the Board found and ruled that, at all relevant times, the athletic director's residence at 33 Farmlea Road was contiguous to and within easy walking distance to the Main Campus, and was an essential part of the College's charitable endeavors.  Accordingly, the Board determined that the athletic director's residence was not properly subject to real estate tax under G.L. c. 59, § 2B, because the residence was "part of or contiguous to" real estate which is the principal location of the College.  Accordingly, the Board issued a decision for the appellant in this appeal and granted an abatement of tax in the full amount of $5,756.44.
OPINION
A property owned by an educational institution, and occupied as a residence by a faculty member for the purpose of carrying into effect the purposes of that institution, is exempt from local real estate taxation if the property is within the "principal location" of the educational institution, or is contiguous thereto.  G.L. c. 59, § 5, Third (e) provides in pertinent part: 
Real and personal property of an educational institution coming within the foregoing description of a charitable organization  which is occupied or used wholly or principally as residences for officers of such institutions and which is not part of or contiguous to real estate which is the principal location of such institution shall not be exempt. 

(Emphasis added.)  The principal issue in this appeal is whether the property at 33 Farmlea Road is "part of or contiguous to" the real estate which serves as the "principal location" of Bay Path College such that this parcel would also be exempt from real estate taxation pursuant to G.L. c. 59, § 5, Third (e).  
What comprises the "principal location" of a college or university, within the meaning of G.L. c. 59, § 5, Third (e), is a question of fact, and not one which can be resolved scientifically.  "The term 'principal location' is undefined in G.L. c. 59, § 5, Third (e), 'undoubtedly because of the practical difficulties inherent in fashioning a definition which could be uniformly applied to the Commonwealth's numerous educational institutions.'"  Trustees of Milton Academy v. Bd. of Assessors of Milton, 391 Mass. 1017, 1018 (1984), quoting Trustees of Boston University v. Bd. of Assessors of Brookline, 11 Mass. App. Ct. 325, 327 (1981).  The Board thus has "a measure of discretion" in resolving this issue.  Trustees of Milton Academy, 391 Mass. at 1018.   
The Board has previously found, and Massachusetts courts have affirmed, that the "principal location" of an educational institution, under G.L. c. 59, § 5, Third (e), need not consist of one integral tract of land, but instead may consist of several disjointed parcels.  See, e.g., Trustees of Milton Academy v. Bd. of Assessors of the Town of Milton 3 Mass. App. Tax Bd. Rep. 38 (Docket Nos. 114845-114857 and 126996-127007, June 23, 1983), aff'd, 391 Mass. 1017 (1984); Trustees of Boston University v. Bd. of Assessors of Brookline, 11 Mass. App. Ct. 325, 327 (1981)(Affirming the Board's finding that Boston University's Charles River campus "is comprised of approximately 121 parcels of property spread throughout Boston and Brookline" which "do not abut other University property and the entire campus is intersected by public ways.").  Some principles to consider in determining if separate parcels of real estate owned by a university or college are part of the same principal location of the campus are whether: (1) the parcels are "within easy walking distance of the main academic buildings [and] the dormitories," Trustees of Milton Academy, 3 Mass. App. Tax Bd. Rep. at 40; and (2) the occupation of the parcels is "essential to the orderly and efficient management of the school."  Board of Assessors of New Braintree v. Pioneer Valley Academy, Inc., 355 Mass. 610, 615 (1969).  
First, the Board found and ruled that, while South Campus is separated from Main Campus, it is within easy walking distance to the academic buildings and dormitories located on Main Campus.  See Trustees of Milton Academy, 3 Mass. App. Tax Bd. Rep. at 40.  The Board found and ruled that the one-third of a mile of residential property along the well-maintained neighborhood on Longmeadow Street constitutes an easy and pleasant walk for college students in search of athletic endeavors.  Because the athletic director's residence at 33 Farmlea Road is located within the South Campus, the Board further found and ruled that the athletic director's residence is also within easy walking distance from Main Campus.  
The Board further found that the occupation of the property as an athletic director's residence was essential to the efficient management of the College, thereby satisfying the second prong of the charitable exemption analysis.  The Board's decision in this appeal is based on the premise that "[e]ducation is a broad and comprehensive term."  Mount Hermon Boys' School v. Inhabitants of Gill, 145 Mass. 139, 146 (1887).  See also Ogden Entertainment Services v. Bd. of Assessors of the Town of Hadley, 2000 ATB Adv. Sh. 978 (Docket Nos. F238188, F242126, December 12, 2000), citing, inter alia, Cummington School of the Arts, Inc. v. Bd. of Assessors of Cummington, 373 Mass. 597, 603 (1977) and Emerson v. Trustees of Milton Academy, 185 Mass. 414, 415 (1904).  Courts have recognized that extracurricular activities such as athletics can be an integral and important facet of the academic mission of an institution; therefore, property set aside for such activities is properly within the charitable exemption.  See Emerson v. Trustees of Milton Academy, 185 Mass. at 418 (Supreme Judicial Court allows exemption for baseball and football fields, as well as other recreational areas, finding that an academic institution "properly may avail itself of opportunities to provide liberally for the physical training, and the social, moral, and aesthetic advancement of the pupils.").   In this appeal, the Assessors agreed that the South Campus, which is dedicated to the athletic endeavors of the College students, is properly exempt from real estate taxation as part of the campus of the College.  Their only contention was the exemption for the single parcel at 33 Farmlea Road, which served as the residence for the athletic director.
Whether occupation of the property by an employee of a college is essential to the efficient operation of a college depends upon (1) whether the employee is required to live in the residence as a condition of employment, and (2) whether the rent charged by the college is nominal and merely pays for expenditures associated with the residence and does not amount to revenue for the college.  See Wheaton  College v. Town of Norton, 232 Mass. 141, 148 (1919), South Lancaster Academy v. Inhabitants of Town of Lancaster, 242 Mass. 553, 559 (1922).  
As to the first factor, the Board heard testimony from the College's Vice President of Finance, and received documentary evidence in the form of an employment letter, that the athletic director was required to live in the residence at 33 Farmlea Road as a condition of his employment.  The Board found this uncontroverted evidence to be credible, and it accordingly found and ruled that the athletic director was required to live at the residence. 
The Board also heard testimony from this same witness that the rent charged by the College was below market rate for a comparable residence, and that the rent did not produce revenue for the College but merely reimbursed it for some of the costs associated with maintaining the residence.  In fact,  as  explained in the Findings, this witness testified, and the Board found, that the residence director's rent could not fully cover the cost of maintenance expenses such as for the boiler, roof, and insulation and siding for the house.  Accordingly, the Board found and ruled that the rent was not a source of revenue for the College.  
Moreover, as explained in the Findings, the Board also found that the acquisition of South Campus, and the ability of the College to bolster its athletic program by gaining NCAA Division III status, was integral to its mission of educating college-aged women.  Having made this determination, the Board then found and ruled that the athletic director's residence at 33 Farmlea Road was essential to the College achieving this mission.  All the functions performed by the athletic director were essential to maintaining the safety and proper decorum of South Campus.  Functions such as snow removal and monitoring the athletic fields for intruders or misplaced equipment were essential for insuring the safety of the College's students.  Further, the constant presence of an adult, especially one trained in first aid, insured the well-being of students in this area of the all-women's campus.  The constant presence also insured that South Campus remained orderly and peaceful, thereby maintaining the College's good relations with its neighbors.  Because the residence of the athletic director was essential to the College's maintenance of its athletic program, the Board accordingly found and ruled that the residence at 33 Farmlea Road was essential to the College's mission of educating young women.
Finally, the Board found and ruled that the residence at 33 Farmlea Road was at least "contiguous to," if not "part of," the College's principal location.  The Assessors did not dispute that South Campus was part of the College's principal location and, therefore, exempt from real estate taxation.  It was also undisputed that the single parcel at 33 Farmlea Road is encompassed by South Campus.  Applying "[t]he usual and ordinary  meaning of the words," as it did in Trustees of Boston University, the Board defined "contiguous" as "import(ing) 'actual contact, something that adjoins' . . . or 'touching along boundaries.'"  11 Mass. App. Ct. at 328.  "In its popular sense, . . . the word means in actual or close contact; touching; adjacent; or near."  Ballentine Law Dictionary (3rd ed. 259).  Accordingly, the Board found and ruled that, because the 33 Farmlea Road property was encompassed by the surrounding property of South Campus, the athletic director's residence was by definition "contiguous" to the principal location of the College, thereby securing its exemption from real property taxes.



Based on the foregoing, the Board ruled that, at all relevant times, the residence at 33 Farmlea Road, owned by the College and used as a residence for the College's athletic director, was exempt from real estate taxation pursuant to G.L. c. 59, § 5, Third (e).  Accordingly, the Board issued a decision for the appellant in this appeal.


					      APPELLATE TAX BOARD	
							
By:____________________________
					    Abigail A. Burns, Chairman




A true copy:



Attest: _____________________
	    Clerk of the Board

  The College also owns some other properties which are not tax-exempt.
   However, in September of 1999, the athletic director decided to "give up some of [his] responsibilities pertaining to lawn care of the property," and as a result, the College maintained his rent at $1,000 but reduced his salary by $1,000 a year.  
   While it was not disclosed at the hearing which responsibilities the athletic director gave up, the duties listed herein are those which the athletic director did retain under his job description effective during all times relevant to this appeal.

ATB 2001 - 567