Case Title: Case W. Res. Univ. v. Wilkins

Citation: 2005-Ohio-1649

Docket Number: 20030779

State: ohio

Court: Ohio Supreme Court

Date: 2005-04-20T00:00:00Z

Document:
[Cite as Case W. Res. Univ. v. Wilkins, 105 Ohio St.3d 276, 2005-Ohio-1649.] 
 
 
CASE WESTERN RESERVE UNIVERSITY, APPELLANT, 
 v. WILKINS, TAX COMMR., APPELLEE. 
[Cite as Case W. Res. Univ. v. Wilkins,  
105 Ohio St.3d 276, 2005-Ohio-1649.] 
Taxation — Real Property — R.C. 5709.07, 5709.12, and 5709.121 — Building 
owned by university and leased to private fraternal organization for 
exclusive use of its members as student housing is not exempt from real-
property taxation. 
(No. 2003-0779 — Submitted February 16, 2005 — Decided April 20, 2005.) 
APPEAL from the Board of Tax Appeals, No. 1999-L-417. 
__________________ 
 
PER CURIAM. 
{¶ 1} Appellant, Case Western Reserve University (“CWRU”), has filed 
an application requesting a real-property tax exemption for a residential facility it 
owns known as Magnolia House (“House”).  In 1997, CWRU entered into a 
memorandum of agreement (“Agreement”) with the Zeta Pi Chapter of Alpha Phi 
Fraternity House Corporation (“House Corporation”) for use of the House by the 
House Corporation for a term of ten years, with a renewal option.  The preamble 
to the Agreement contained the following clauses: 
{¶ 2} “Whereas the university currently provides exclusive use of the 
house * * * to [House Corporation] for purposes of housing members of its Zeta 
Pi Chapter [Alpha Phi sorority]* * *; and  
{¶ 3} “Whereas the parties wish to define the terms and conditions 
governing [House Corporation’s] ongoing use of the House to house members of 
the Chapter [Alpha Phi sorority].” 
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{¶ 4} The Agreement then states, “During the Term (as hereinafter 
defined), the House shall be made available to [House Corporation] solely for 
purposes of providing housing to Chapter [Alpha Phi sorority] members (and 
other individuals specified herein) * * *.”  Alpha Phi sorority members using the 
House are required to be students at CWRU and are required to sign a standard 
student-housing contract with CWRU.  Alpha Phi is to provide a minimum of 30 
individuals to live in the House during the fall and spring semesters and ten 
during the summer. 
{¶ 5} During the fall and spring semesters, occupancy of the House is 
limited to members of the Zeta Pi chapter of Alpha Phi.  However, during the 
summer term, pledges and national members of Alpha Phi can also use the House.  
The House Corporation is to be “solely responsible for the selection of occupants 
and for the assignment of rooms in the House.”  CWRU is to provide one room in 
the House to the House Corporation without charge for an advisor to the Alpha 
Phi sorority. 
{¶ 6} In addition, the House Corporation is to provide comprehensive 
general liability insurance, including coverage for property damage.  Under the 
Agreement, CWRU is released from liability for damage or injury to any person 
or property, including the property of Alpha Phi, its members, guests, or invitees 
occasioned by its use of the House.  The House Corporation also agrees to 
indemnify CWRU and hold it harmless against claims resulting from the 
corporation’s use of the House. 
{¶ 7} CWRU is to provide housekeeping and maintenance services, 
capital improvements, and replacement of furnishings for the House in 
accordance with CWRU’s practices and policies. 
{¶ 8} As a condition of membership in the sorority, the student is 
expected to sign a housing contract with CWRU to live in the House and not sign 
January Term, 2005 
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any other housing contract unless and until every available space in the House is 
filled and the student is released from the housing obligation. 
{¶ 9} CWRU filed its application for real-property tax exemption on the 
House under R.C. 5709.07, 5709.12, and 5709.121.  The Tax Commissioner 
denied the application, finding that use of the House was not open to the general 
student population.  Instead, use of the House was restricted to a certain sorority.  
As a result, use of the House primarily benefited the sorority, and, therefore, the 
House was not eligible for exemption under R.C. 5709.07, 5709.12, or 5709.121. 
{¶ 10} CWRU appealed the Tax Commissioner’s decision to the Board of 
Tax Appeals (“BTA”).  After a hearing, the BTA affirmed the Tax 
Commissioner’s decision, finding that CWRU was not itself using the House, but 
had leased it to Alpha Phi, a private not-for-profit social organization, which was 
not an educational institution. 
{¶ 11} This matter is before this court as an appeal as of right. 
{¶ 12} The question to be determined by this court is whether the decision 
of the BTA denying exemption for the House is reasonable and lawful.  When 
considering a request for exemption, we are mindful that we are to strictly 
construe statutes granting exemptions, and the burden rests on the one claiming an 
exemption to demonstrate that the property qualifies.  OCLC Online Computer 
Library Ctr., Inc. v. Kinney (1984), 11 Ohio St.3d 198, 201, 11 OBR 509, 464 
N.E.2d 572.  The rationale for granting tax exemptions is that the recipient’s 
operation is a present benefit to the general public that justifies the loss of tax 
revenue.  White Cross Hosp. Assn. v. Bd. of Tax Appeals (1974), 38 Ohio St.2d 
199, 201, 67 O.O.2d 224, 311 N.E.2d 862. 
{¶ 13} CWRU first contends that the House is entitled to exemption under 
R.C. 5709.12 and 5709.121(A) because the House belongs to an educational 
institution and is used by it for educational purposes.  The specific provision of 
R.C. 5709.12 relied upon by CWRU is R.C. 5709.12(B), which provides: “Real * 
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* * property belonging to institutions that is used exclusively for charitable 
purposes shall be exempt from taxation * * *.”  Thus, to be exempt, the real 
property must (1) belong to an institution and (2) be used exclusively for 
charitable purposes. 
{¶ 14} There is no dispute concerning the fact that the House belongs to 
CWRU.  However, we must determine whether the House belongs to an 
“institution.”  To determine whether CWRU is an “institution” for the purposes of 
R.C. 5709.12, we turn to our decision in Highland Park Owners Inc. v. Tracy 
(1994), 71 Ohio St.3d 405, 407, 644 N.E.2d 284, where we quoted Black’s Law 
Dictionary (6th Ed.1990) 800, for the following definition of “institution”: 
{¶ 15} “ ‘An establishment, especially one of eleemosynary or public 
character or one affecting a community.  An established or organized society or 
corporation.  It may be private in its character, designed for profit to those 
composing the organization, or public and charitable in its purposes, or 
educational (e.g. college or university).’ ” 
{¶ 16} CWRU is an Ohio not-for-profit corporation formed for the 
purpose of operating a university exclusively for charitable, scientific, and 
educational purposes.  Applying the definition of “institution” to the facts, we 
hold that the evidence supports the BTA’s finding that CWRU qualifies as an 
educational “institution” for the purposes of R.C. 5709.12(B) and that the House 
belongs to an institution. 
{¶ 17} The next step in establishing entitlement to an exemption under 
R.C. 5709.12(B) is to determine whether the House belonging to the institution is 
being “used exclusively for charitable purposes.”  R.C. 5709.121 sets forth a 
definition of the phrase “used exclusively for charitable purposes.”  However, that 
definition is applicable only in certain circumstances.  In Episcopal Parish of 
Christ Church, Glendale v. Kinney (1979), 58 Ohio St.2d 199, 200-201, 12 
O.O.3d 197, 389 N.E.2d 847, the court cited with approval Justice Stern’s 
January Term, 2005 
5 
concurring opinion in White Cross Hosp. Assn. v. Bd. of Tax Appeals, 38 Ohio 
St.2d at 203, 67 O.O.2d 224, 311 N.E.2d 862, which explained the relationship 
between R.C. 5709.12 and R.C. 5709.121 as follows: 
{¶ 18} “Initially, it is important to observe that, although R.C. 5709.121 
purports to define the words used exclusively for ‘charitable’ or ‘public’ purposes, 
as those words are used in R.C. 5709.12, the definition is not all-encompassing.  
R.C. 5709.12 states: ‘* * * Real and tangible personal property belonging to 
institutions that is used exclusively for charitable purposes shall be exempt from 
taxation.’ Thus, any institution, irrespective of its charitable or noncharitable 
character, may take advantage of a tax exemption if it is making exclusive 
charitable use of its property.  See Wehrle Foundation v. Evatt (1943), 141 Ohio 
St. 467 [26 O.O. 29], 49 N.E.2d 52.  The legislative definition of exclusive 
charitable use found in R.C. 5709.121, however, applies only to property 
‘belonging to’ i.e., owned by, a charitable or educational institution, or the state or 
a political subdivision.  The net effect of this is that R.C. 5709.121 has no 
application to noncharitable institutions seeking tax exemption under R.C. 
5709.12.  Hence, the first inquiry must be directed to the nature of the institution 
applying for an exemption.” (Emphasis sic.) 
{¶ 19} Since the House is owned by CWRU, an educational institution, 
the definition of “used exclusively for charitable purposes” in R.C. 5709.121 is 
applicable. 
{¶ 20} CWRU claims exemption for the House under two different 
provisions, R.C. 5709.121(A)(2) and 5709.121(B). 
{¶ 21} R.C. 5709.121(A)(2) provides: 
{¶ 22} “Real property * * * belonging to a[n] * * * educational institution 
* * * shall be considered as used exclusively for charitable * * * purposes by such 
institution * * * if it meets one of the following requirements: 
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{¶ 23} “(A) It is used by such institution * * * or by one or more other 
such institutions * * *under a lease, sublease, or other contractual arrangement: 
{¶ 24} “* * * 
{¶ 25} “(2) For other charitable, educational, or public purposes.” 
{¶ 26} CWRU contends that the House is exempt under R.C. 
5709.121(A)(2) because it is being used for educational purposes.  In his 
concurring opinion in White Cross Hosp. Assn., Justice Stern set forth the 
following statement concerning R.C. 5709.121(A)(2): 
{¶ 27} “If a qualified institution * * * owns property, that property is 
exempt from taxation if (1) the institution * * * itself uses the property as 
specified in R.C. 5709.121(A)(1) or (A)(2); [or] (2) the institution * * * 
contractually allows another qualified institution * * * to use the property as 
specified in R.C. 5709.121(A)(1) or (A)(2) * * *.”  Id., 38 Ohio St.2d at 203, 67 
O.O.2d 224, 311 N.E.2d 862. 
{¶ 28} R.C. 5709.121(A)(2) is not applicable to the facts of this case.  
First, CWRU is not using the House itself.  The House is being used exclusively 
by the House Corporation to house the members of the Alpha Phi sorority under a 
contractual arrangement with CWRU.  No claim is made that the House 
Corporation with which CWRU contracted is a qualified institution, i.e., a 
charitable or educational institution and, indeed, it is neither.  The BTA found that 
Alpha Phi sorority, which is using the House, “is a private not-for-profit social 
organization, and not an educational institution.”  Because the House 
Corporation’s exclusive use of the House is not an educational use, the House is 
not exempt under R.C. 5709.121(A)(2). 
{¶ 29} CWRU’s second contention is that the House is exempt under R.C. 
5709.121(B) because it is “under the direction or control” of CWRU and is being 
made available “for use in furtherance of or incidental to [CWRU’s] * * * 
educational * * * purposes and not with the view to profit.”  In Cincinnati Nature 
January Term, 2005 
7 
Ctr. Assn. v. Bd. of Tax Appeals (1976), 48 Ohio St.2d 122, 125, 2 O.O.3d 275, 
357 N.E.2d 381, the court set forth a three-pronged test to determine whether real 
property belonging to a charitable or educational institution falls within the terms 
of R.C. 5709.121(B).  In order to meet the test, the property must “(1) be under 
the direction or control of [such an] institution or state or political subdivision, (2) 
be otherwise made available ‘for use in furtherance of or incidental to’ the 
institution’s ‘charitable [educational] or public purposes,’ and (3) not be made 
available with a view to profit.” 
{¶ 30} The first prong of the three-pronged Cincinnati Nature test 
requires in this case that the property be under the direction or control of an 
educational institution.  The actual wording of the statute requires that the 
property be “made available” under the direction or control of an educational 
institution.  There apparently is no disagreement that the House is made available 
under the direction or control of CWRU, as evidenced by the Agreement between 
CWRU and the House Corporation. 
{¶ 31} The second prong of the Cincinnati Nature test is that the property 
be made available “for use in furtherance of or incidental to” the institution’s 
educational purposes.  Id., 48 Ohio St.2d at 125, 2 O.O.3d 275, 357 N.E.2d 381.  
The BTA was not persuaded that providing housing for the “exclusive use of a 
social sorority and its members is in furtherance of CWRU’s educational 
purpose.”  Unlike the other residence halls at CWRU, occupancy of the House is 
not open to just any student enrolled at CWRU.  Instead, use of the House is 
limited to students who are members of a private sorority.  CWRU is providing 
housing for the exclusive use of a private fraternal organization.  We do not 
believe that it is a function of a college or university to furnish a dwelling to a 
private social organization to use at its discretion.  In providing the House, 
CWRU benefits the House Corporation and the local chapter of the Alpha Phi 
sorority, thereby relieving them of the obligation to provide a dwelling to the 
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sorority members.  However, providing housing for the exclusive use of a private 
fraternal organization is not in furtherance of or incidental to CWRU’s 
educational purpose.  The House is not exempt under R.C. 5709.12 and 
5709.121(B).  Because we have determined that the use of the House does not 
meet the second prong of the three-pronged Cincinnati Nature test, we need not 
consider the third prong. 
{¶ 32} This court has previously considered facts similar to those in this 
case in Denison Univ. v. Bd. of Tax Appeals (1962), 173 Ohio St. 429, 20 O.O.2d 
63, 183 N.E.2d 773 (“Denison I”).  Admittedly, Denison I was decided before the 
enactment of R.C. 5709.121 in 1969.  133 Ohio Laws, Part III, 2646.  We believe, 
however, that the result in Denison I is consistent with the result that would be 
reached under R.C. 5709.121.  In Denison I, Denison University sought 
exemption for nine fraternity houses that had been built on land owned by the 
university and leased to the fraternities.  Eight of the fraternities leased the land 
for 99 years, renewable forever, with a termination clause that could be exercised 
by the university.  The remaining fraternity house had a renewable one-year lease 
with the university.  All but one of the houses were constructed and paid for by 
the fraternities. 
{¶ 33} This court held in the syllabus of Denison I that the fraternity 
houses constructed and paid for by the fraternities on land owned in fee simple by 
a university and leased to the fraternities were not exempt because they were “ not 
‘used exclusively for charitable purposes’ within the purview of Section 5702.12, 
Revised Code,  and Section 2, Article XII of the [Ohio] Constitution.”  (Emphasis 
sic.) 
{¶ 34} CWRU’s final contention is that the House is exempt under R.C. 
5709.07(A)(4) because it is a building connected with a public institution of 
learning and is not used with a view to profit.  R.C. 5709.07(A)(4) exempts from 
taxation “[p]ublic colleges * * * and all buildings connected with them, and all 
January Term, 2005 
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lands connected with public institutions of learning, not used with a view to 
profit.” 
{¶ 35} In Denison Univ. v. Bd. of Tax Appeals (1965), 2 Ohio St.2d 17, 31 
O.O.2d 10, 205 N.E.2d 896 (“Denison II”), we held that Denison University was 
a public college within the meaning of R.C. 5709.07, stating at paragraph one of 
the syllabus: 
{¶ 36} “The words ‘public colleges * * * academies * * * and public 
institutions of learning’ in Section 5709.07, Revised Code, include a private 
institution of learning conducted in a lawful manner without any view to profit 
and open to all members of the public without regard to race, creed or nationality.  
(Paragraph eight of the syllabus of Gerke, Treas., v. Purcell, 25 Ohio St. 229, 
approved and followed.)”  (Ellipses sic.) 
{¶ 37} Thus, just as Denison University was a public college for the 
purposes of R.C. 5709.07, so also is CWRU a “public college” for the purposes of 
R.C. 5709.07. 
{¶ 38} In Denison II, the university sought exemption for buildings owned 
by it and used for a carpentry shop, a lumber storage shed for lumber used in the 
carpentry shop, a Quonset hut used by university painting crews to paint college 
equipment and for storage of maintenance equipment, a dwelling lived in by a 
caretaker of the facilities and his family, and a pole shelter used to store hay for 
the horses used in a physical education course.  In addition, the university also 
sought exemption for the on-campus president’s house and an off-campus guest 
house used to provide lodging for official guests of the university.  A caretaker 
lived in part of the guest house.  The university sought exemption for its 
properties under both R.C. 5709.07 and 5709.12, but the court considered only 
R.C. 5709.07. 
{¶ 39} After finding that Denison was a public college and a public 
institution of learning within the meaning of R.C. 5907.07, the court stated: 
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{¶ 40} “Every other question involved in the instant case was considered 
and decided by this court in 1909 when it affirmed without opinion ([Schnebly v. 
Kenyon College (1909),] 81 Ohio St. 514, 91 N.E. 1138) the decision of the 
Circuit Court of Knox County in Kenyon College v. Schnebly, Treas. (1909), 12 
C.C. (N.S.) 1, which held that, by reason of what is now Section 5709.07, Revised 
Code, ‘residences occupied by the president and professors and janitor are exempt 
[from taxation], as is also vacant land from which no revenue is derived * * *.’ 
{¶ 41} “We agree with the statements of the Circuit Court in that case that 
‘the plain language of the statute is “all public colleges, public academies, all 
buildings connected with the same, are exempt” and we think it was the purpose 
to exempt all buildings that were with reasonable certainty used in furthering or 
carrying out the necessary objects and purposes of the college,’ and that the 
‘statute is clear, that all lands connected with public institutions of learning, “not 
used with a view to profit” are exempt.’ ”  (Emphasis sic.)  Id. at 21, 31 O.O.2d 
10, 205 N.E.2d 896. 
{¶ 42} In paragraph two of the syllabus in Denison II the court approved 
and followed Kenyon College v. Schnebly as authority for its holding: 
{¶ 43} “All buildings connected with such a public college or academy 
and used with reasonable certainty in furthering or carrying out the necessary 
objects and purposes of such academy or college, including the president’s 
residence, and all lands connected with such a public institution of learning and 
not used with a view to profit are exempted from taxation by Section 5709.07, 
Revised Code.” 
{¶ 44} The BTA found that the Alpha Phi “sorority’s right to the 
exclusive use of the subject property is not an educational use by CWRU under 
R.C. 5709.07.”  We agree. 
{¶ 45} As the court held in paragraph two of the syllabus of Denison II, 
the exemption in R.C. 5709.07 is for buildings connected with the college and 
January Term, 2005 
11 
used with reasonable certainty in furthering and carrying out the necessary objects 
and purposes of the college.  While providing residences for its students may 
further and carry out the necessary objects and purposes of a college, we do not 
believe that the furnishing of a college building to a private fraternal organization 
to exclusively house its members is a necessary object or purpose for a college or 
university.  The House is not being used by CWRU to house its students.  Instead, 
the House is being used by the House Corporation to house members of the Alpha 
Phi sorority. 
{¶ 46} Although it may not be necessary to the denial of the exemption in 
this case, we feel we would be remiss if we did not discuss R.C. 5709.07(B), 
which provides: “This section shall not extend to leasehold estates or real property 
held under the authority of a college or university of learning in this state * * *.” 
{¶ 47} While exemption of the fraternity houses in Denison I was denied 
under R.C. 5709.12, exemption under R.C. 5709.07 apparently was raised as an 
issue in the university’s brief even though it was not raised in the university’s 
notice of appeal.  Id., 173 Ohio St. at 429, 20 O.O.2d 63, 183 N.E.2d 773.  In 
commenting on the sentence that is now contained in R.C. 5709.07(B), the court 
in Denison I stated, “[I]t will be noted that, according to the express provisions of 
the last sentence above quoted, the entire section is expressly made inapplicable 
‘to leasehold estates or real property held under the authority of a college or 
university of learning in this state.’ ”  Id. at 437, 20 O.O.2d 63, 183 N.E.2d 773.  
While there are exceptions to that clause in R.C. 5709.07(B), none of those 
exceptions are applicable here.  Instead, R.C. 5709.07(B) precludes an exemption 
in this case because the House Corporation is holding real property “under the 
authority of a college or university of learning in this state.” 
{¶ 48} Colleges and academies have been granted an extremely broad 
exemption by R.C. 5709.07.  However, the General Assembly placed limits on 
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that exemption by providing that it does not extend to leasehold estates or real 
property held under authority of a college or university. 
{¶ 49} For all of the reasons set forth above, we find that the decision of 
the BTA was reasonable and lawful and affirm it. 
Decision affirmed. 
 
MOYER, C.J., RESNICK, PFEIFER, O’CONNOR, O’DONNELL and LANZINGER, 
JJ., concur. 
 
LUNDBERG STRATTON, J., dissents. 
__________________ 
 
LUNDBERG STRATTON, J., dissenting. 
{¶ 50} I believe that Magnolia House should be exempt from taxation 
because the House “is made available under the direction” of CWRU and used “in 
furtherance of or incidental to” CWRU’s educational purposes under R.C. 
5709.121.  Therefore, I respectfully dissent. 
{¶ 51} Pursuant to R.C. 5709.121 and 5709.121(B), property that is “used 
exclusively for charitable or public purposes” by an educational institution 
includes property that “is made available under the direction or control of such 
institution * * * for use in furtherance of or incidental to its * * * educational * * 
* purposes and not with the view to profit.”  (Emphasis added.) 
{¶ 52} Thus, in order to be tax exempt under this provision, the property 
(1) must be “made available under the direction or control” of a charitable or 
educational institution, (2) must be made available “for use in furtherance of or 
incidental to” the institution’s charitable, educational, or public purposes, and (3) 
must be made available without an intent to profit.  Cincinnati Nature Ctr. Assn. 
v. Bd. of Tax Appeals (1976), 48 Ohio St.2d 122, 125, 2 O.O.3d 75, 357 N.E.2d 
381. 
{¶ 53} The majority’s holding turns primarily on its determination that the 
House was not used exclusively for CWRU’s educational purposes.  The majority 
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states that “CWRU is providing housing for the exclusive use of a private 
fraternal organization.  We do not believe that it is a function of a college or 
university to furnish a dwelling to a private social organization to use at its 
discretion.”  In support the majority cites Denison Univ. v. Bd. of Tax Appeals 
(1962), 173 Ohio St. 429, 20 O.O.2d 63, 183 N.E.2d 773. 
{¶ 54} The majority also supports its holding by pointing out that the 
House is available only to members of Alpha Phi as opposed to the general 
student population.  The majority cites White Cross Hosp. Assn. v. Bd. of Tax 
Appeals (1974), 38 Ohio St.2d 199, 201, 67 O.O.2d 224, 311 N.E.2d 862, for the 
proposition that the rationale for granting tax exemptions is that the recipient’s 
operation is a present benefit to the general public that justifies the loss of tax 
revenue. 
A. Under R.C. 5709.121(B), Use Need Not Be Exclusive 
{¶ 55} In Denison, Denison University sought tax exemptions under R.C. 
5709.12 for nine buildings that were leased to nine fraternities.  The BTA 
determined that the buildings were “ ‘operated under lease by fraternities for 
fraternity purposes, and but one of the many uses, for which the fraternities use 
these buildings, is that of providing lodging for fraternity members only.’ ”  
(Emphasis sic.)  Id., 173 Ohio St. at 434, 20 O.O.2d 63, 183 N.E.2d 773.  The 
board also found that “ ‘these buildings were not used exclusively for charitable 
purposes within the meaning of those words as used in the Ohio Constitution and 
in Revised Code Section 5709.12.’ ”  (Emphasis sic.)  Id. at 439, 20 O.O.2d 63, 
183 N.E.2d 773.  This court affirmed the BTA’s decision. 
{¶ 56} Denison relied on R.C. 5709.12.  However, seven years after the 
court decided Denison, the General Assembly enacted R.C. 5709.121.  133 Ohio 
Laws, Part III, 2646.  R.C. 5709.12(B) still provides that in order to be tax 
exempt, property belonging to any institution must be used exclusively for 
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charitable purposes.1  However, R.C. 5709.121(B) provides that property 
belonging to a charitable or educational institution or the state or a political 
subdivision is “used exclusively for charitable or public purposes” if “[i]t is made 
available under the direction or control of such institution * * * for use in 
furtherance of or incidental to” the institution’s educational purpose.  As Justice 
Herbert stated, “By the enactment of R.C. 5709.121, the General Assembly has 
announced its desire that certain types of tax exemptions for the institutions 
mentioned in that statute should not be restrictively considered.”  White Cross 
Hosp. Assn., 38 Ohio St.2d at 205, 67 O.O.2d 224, 311 N.E.2d 862 (Herbert, J., 
dissenting).  Thus, under the broadened definition of the phrase “used exclusively 
for charitable or public purposes” in R.C. 5709.121, property belonging to a 
charitable or educational institution or the state or political subdivision may be 
exempt from taxation even if its use is not “exclusively” charitable.  Galvin v. 
Toledo Trust (1973), 34 Ohio St.2d 157, 159-160, 63 O.O.2d 242, 296 N.E.2d 
542. 
{¶ 57} Therefore, cases that rely on the exclusive-use test under R.C. 
5709.12, such as Denison, are not persuasive in determining whether property is 
exempt from taxation under R.C. 5709.121(B).  See Galvin, paragraph one of the 
syllabus.  Accordingly, I believe that the majority’s reliance on Denison is 
misplaced. 
{¶ 58} Admittedly, Alpha Phi uses the House for some activities that may 
not be in furtherance of or incidental to CWRU’s educational purpose, such as 
social gatherings.  However, similar social activities occur at other nonfraternal 
residence halls, and those activities do not disqualify those properties from being 
exempt from taxation. 
                                          
 
1. As the majority notes, R.C. 5709.12 applies to use of property belonging to any institution, 
including noncharitable institutions, but R.C. 5709.121 is limited to use of property belonging to a 
charitable or educational institution or the state or a political subdivision.    
January Term, 2005 
15 
{¶ 59} Moreover, pursuant to the agreement through which CWRU 
permits Alpha Phi use of the House, all the residents must be CWRU students. 
The fact that these students are also members of the Alpha Phi sorority does not 
diminish their status as CWRU students.  Thus, irrespective of other uses, the 
House is used to house CWRU students, which is a use in furtherance of CWRU’s 
educational purpose. 
{¶ 60} Finally, I also believe that Alpha Phi uses the House in other ways 
that are in furtherance of or incidental to CWRU’s educational purposes.  Part of 
CWRU’s educational mission is encouraging students to become involved in the 
community.  Greek organizations provide a formal approach to promoting 
community service.  CWRU encourages Greek organizations, including Alpha 
Phi, to participate in charitable activities through the Panhellenic Council and 
Intrafraternal Conference in a program called “365 Days of Service” through 
which each Greek organization develops a quota of hours for community service.  
Thus, Alpha Phi certainly uses the House for activities that promote CWRU’s 
educational purposes. 
B. Under R.C. 5709.121, the Property Need  
Not Be Made Available to the Public 
{¶ 61} The majority seems to suggest that because the property is being 
used by members of a private entity to the exclusion of the general student 
population, a tax exemption should not apply, because “[t]he rationale for 
granting tax exemptions is that the recipient’s operation is a present benefit to the 
general public that justifies the loss of tax revenue,” citing White Cross Hosp., 38 
Ohio St.2d at 201, 67 O.O.2d 224, 311 N.E.2d 862. 
{¶ 62} In Cincinnati Nature Ctr., 48 Ohio St.2d 122, 2 O.O.3d 275, 357 
N.E.2d 381, the Cincinnati Nature Center Association (“Nature Center”), a 
nonprofit entity, sought a tax exemption under R.C. 5709.121 for a parcel of 
property containing two houses owned by the Nature Center and used as 
SUPREME COURT OF OHIO 
16 
residences by its employees.  The BTA granted the exemption as to the acreage 
but denied the exemption as to the houses.  The court of appeals reversed the BTA 
on the grounds that “ ‘the use of the two houses by employees of the Nature 
Center was in furtherance of and incidental to its charitable purpose and was not 
with a view to “profit” under R.C. 5709.121.’ ” Id. at 123, 2 O.O.3d 275, 357 
N.E.2d 381. 
{¶ 63} On appeal, the BTA argued that under R.C. 5709.121, the property 
must be made available for use by the public.  However, after examining the 
language of R.C. 5709.121, the court found that “the board’s contentions that 
exempt property must be made available to another charitable institution or to the 
public are without merit.” Id. at 125-126, 2 O.O.3d 275, 357 N.E.2d 381. 
{¶ 64} Therefore, the fact that residency in the House is limited to Alpha 
Phi members and is not open to the general student population does not preclude a 
finding that the house is exempt from taxation under R.C. 5709.121. 
C.  The House Was Not Used with View to Profit 
{¶ 65} The majority did not address this issue because it found that the 
second prong of the Cincinnati Nature test was dispositive.  However, because I 
believe that the House satisfies the first two prongs of the Cincinnati Nature test, I 
will address the third prong, which requires that the property must be made 
available without an intent to profit.  Cincinnati Nature Ctr., 48 Ohio St.2d at 
125, 2 O.O.3d 75, 357 N.E.2d 381. 
{¶ 66} The record indicates that the House is not used with an intent to 
make a profit.  The students who live at the House pay CWRU for the housing 
pursuant to a standard student housing contract.  CWRU merely seeks to generate 
a revenue stream that covers the cost of operating the House.  Any surplus 
revenue would be reinvested in the facilities. 
D. Conclusion 
January Term, 2005 
17 
{¶ 67} Accordingly, I would hold that Alpha Phi’s use of the House is in 
furtherance of or incidental to CWRU’s educational purposes and not with a view 
to profit under R.C. 5709.121(B).  Therefore, the House should be exempt from 
taxation pursuant to R.C. 5709.12.  Thus, I respectfully dissent. 
__________________ 
 
Taft, Stettinius & Hollister, L.L.P., Joel A. Makee, Bruce L. Waterhouse 
Jr., and Colleen G. Treml, for appellant. 
 
Jim Petro, Attorney General, and Janyce C. Katz, Assistant Attorney 
General, for appellee. 
______________________