ATLANTIC UNION COLLEGE v. BOARD OF ASSESSORS OF LANCASTER (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The board of assessors of Lancaster (assessors) appeals from a decision of the Appellate Tax Board (board), which granted charitable tax exemptions on twelve different parcels owned by Atlantic Union College (Atlantic Union) for fiscal years 2014-2016.² The issue on appeal is whether the board was required to consider each of the twelve parcels separately from Atlantic Union's campus as a whole. We remand for further consideration consistent with this memorandum and order.

Background. The board found the following facts, which are supported by substantial evidence. See Bridgewater State Univ. Found. v. Assessors of Bridgewater, 463 Mass. 154, 156 (2012). Atlantic Union was incorporated in 1883 and had a lengthy history as a private liberal arts college affiliated with the Seventh-Day Adventists. In 2011, however, Atlantic Union lost its accreditation due to financial hardship and suspended its bachelor of arts degree program. While the bachelor of arts degree program was suspended, Atlantic Union actively worked towards regaining accreditation and was able to accomplish that in 2015. In the meantime, Atlantic Union offered a teach out program for its nursing students so they could finish their studies at a neighboring college,³ and other nondegree programs were offered on Atlantic Union's campus during the 2011-2015 suspension period.⁴ In addition, Atlantic Union kept its academic offices open so it could assist former students, allowed some employees and former students to reside in campus housing, and continued to maintain the entire campus.

Atlantic Union's campus comprises about thirty parcels. For most of Atlantic Union's history as a private liberal arts college, the assessors exempted the entire campus from taxation pursuant to G. L. c. 59, § 5, Third, the charitable tax exemption. That changed, however, after Atlantic Union lost its accreditation. While the assessors continued to exempt certain parcels that contained academic buildings for fiscal years 2014-2016, the assessors declined to exempt twelve parcels that were either parking lots or that contained the campus housing in which some employees and former students resided during the fiscal years at issue.

Discussion. The charitable tax exemption under G. L. c. 59, § 5, Third, is available to a charitable organization that owns the property in question and occupies it for the organization's charitable purposes, or allows another charitable organization to occupy it for its charitable purposes. Bridgewater State Univ. Found., 463 Mass. at 157. In the context of the exemption, “occupancy means something more than that which results from simple ownership and possession. It signifies an active appropriation to the immediate uses of the charitable cause for which the owner was organized.” Assessors of Boston v. Vincent Club, 351 Mass. 10, 14 (1966), quoting Babcock v. Leopold Morse Home for Infirm Hebrews & Orphanage, 225 Mass. 418, 421 (1917). The burden lies with the charitable organization seeking the exemption to demonstrate that the express terms of the statute, which are strictly construed, apply. See Animal Rescue League of Boston v. Assessors of Bourne, 310 Mass. 330, 332 (1941).

The assessors argue that the board erred in failing to make specific findings with respect to each of the twelve parcels for each fiscal year from 2014-2016, treating Atlantic Union's campus instead as a single property. The assessors further argue that, when analyzing each of the twelve parcels separately, the evidence does not support the conclusion that they were being occupied by Atlantic Union for its charitable purposes for each fiscal year from 2014-2016.⁵ The assessors contend, for example, that the evidence as to some employees and former students residing in campus housing was extremely limited and that, regardless, such use did not further Atlantic Union's charitable purposes.

The difficulty we encounter is that the board did not “state adequate reasons in support of its decision so as to permit meaningful appellate review.” Blakely v. Assessors of Boston, 391 Mass. 473, 476 (1984). Primarily, we cannot discern whether the board reviewed each of the twelve parcels separately or whether the board instead reviewed the campus as a whole. The touchstone, as noted above, is the need to discern whether the “property” at issue was occupied for charitable purposes during the tax year in question -- whether there was an “active appropriation to the immediate uses of the charitable cause.” Vincent Club, 351 Mass. at 14.

While the board typically reviews exemptions on a parcel by parcel basis, the methodology of treating the property as a whole may be appropriate in this circumstance if the board explains its reasons for doing so.⁶ We recognize that college campuses may be unique in that they are cohesive properties that happen to comprise smaller contiguous parcels. Assuming that it would be appropriate to consider the entire campus as a cohesive property, Atlantic Union's longstanding use of the entire campus and the fact that Atlantic Union continued to maintain and use, at least to some degree, the entire campus while it actively worked towards regaining accreditation, may support the exemptions for these limited number years. See Assessors of Hamilton v. Iron Rail Fund of Girls Clubs of Am., Inc., 367 Mass. 301, 307 (1975) (“even somewhat equivocal expressions of an intention to occupy property for a charitable purpose are entitled to more weight in the case of an organization which has so occupied the property annually for many years”). However, it is unclear which methodology the board applied, and its reasons for doing so.

If, however, the board instead reviewed each of the twelve parcels separately, we cannot discern on what basis the board concluded that each parcel was being occupied by Atlantic Union for its charitable purposes for each fiscal year from 2014-2016. While it appears undisputed that some employees and former students resided in campus housing, if each property were assessed separately, the board did not make specific findings as to which parcels and for which fiscal years.⁷ Nor did the board make findings as to how this use, or any other use of a specific parcel, furthered Atlantic Union's charitable purposes.⁸

Because we have inadequate findings to review, we vacate the board's decision and remand to the board for further consideration consistent with this memorandum and order. See, e.g., Boston Gas Co. v. Assessors of Boston, 458 Mass. 715, 734 (2011).

So ordered.

Vacated and remanded

FOOTNOTES

2.   The assessors do not dispute that additional parcels owned by Atlantic Union are eligible for the charitable tax exemption.

3.   The assessors contend that the teach out program ended in 2012, before the fiscal years relevant to this appeal.

4.   One such program, the Northeast Evangelism Training School, was designed to teach students the techniques and strategies of conducting Bible studies and evangelism. The assessors contend that this program was offered by the Atlantic Union Conference, an administrative body of the Seventh-Day Adventists, and not by Atlantic Union.

5.   The assessors concede that one parcel located at 366 South Main Street was eligible for the charitable tax exemption in fiscal year 2016 when current Atlantic Union students again began to reside there.

6.   The Supreme Judicial Court has on occasion ruled that the exemption can apply to some buildings used by an organization and not others, Shrine of Our Lady of La Salette, Inc. v. Board of Assessor, 476 Mass. 690, 700 (2017), and in cases involving one building, the board may, in certain circumstances, divide the building into sections, some of which are entitled to the exemption and others that are not. See, e.g., Milton Hosp. & Convalescent Home v. Assessors of Milton, 360 Mass. 63, 68-70 (1971); Assessors of Worcester v. Knights of Columbus Religious Educ. Charitable & Benevolent Ass'n of Worcester, 329 Mass. 532, 533-535 (1952). Especially considering this history, if the board reviewed the campus as a whole, some explanation is warranted.

7.   As required by G. L. c. 59, § 5, the determination date for each fiscal year is July 1, and Atlantic Union does not argue otherwise.

8.   For example, to the extent that the board relied on participants of the teach out program residing in campus housing, the board did not make a finding as to when that program ended. See note 2, supra. Alternatively, to the extent that the board relied on participants of the Northeast Evangelism Training School residing in campus housing, the board did not make any findings as to whether a third party offered this program and why such use made Atlantic Union eligible for the charitable tax exemption. See note 3, supra. While use by a third party does sometimes make an organization eligible for the charitable tax exemption, see Bridgewater State Univ. Found., 463 Mass. at 157-161, the board did not make any findings in support of the conclusion.