Case Title: Baltimore v. Boitnott

Citation: 356 Md. 605

Docket Number: 17/99

State: maryland

Court: Maryland Supreme Court

Date: 1999-09-23T00:00:00Z

Document:
Mayor and City Council of Baltimore, et al. v. Boitnott, et. al
No. 17, September Term, 1999
HEADNOTE:
PROPERTY TAX; PILOT STATUTE; MUNICIPALITIES; OWNERSHIP
Record or legal title is sufficient to satisfy the ownership requirement of Maryland
Code (1985, 1994 Repl. Vol. 1998 Cum Supp.) §6-102 (e) and §7-501 of the Tax
Property Article.     
Circuit Court for Baltimore City
Case No. 98174121
 IN THE COURT OF APPEALS OF  MARYLAND
NO.  17
SEPTEMBER TERM, 1999
MAYOR AND CITY COUNCIL OF
BALTIMORE, ET. AL
v.
CAROLYN BOITNOTT, ET. AL
                     Bell, C. J.
          Eldridge
          Rodowsky
                  Raker
   
          Wilner
          Cathell
                      Karwacki, Robert L. (Retired, Specially
                                           Assigned),
JJ.
Opinion by Bell, C. J.
             
FILED:   September 23, 1999
     Unless otherwise indicated, all future references are to the Tax-Property Article,
1
Maryland Code (1985, 1994 Repl. Vol., 1998 Cum Supp.).
     These  ordinances have been the subject of other lawsuits filed against the Mayor and
2
City Council of Baltimore and Inner Harbor East, LLLP.  See Waterfront Coalition, Inc., et.
al. v. Mayor & City Council of Baltimore, et. al., Case. No. 97364028/CC-9162, challenging
Ordinance 97-229, which rezoned the property to allow for the construction of a hotel and
parking garage, and Carolyn Boitnott, at. al. v. Mayor & City Council of Baltimore, et. al.,
Case No. 98016013/CC-447, challenging Ordinance 97-231, both in the Circuit Court for
Baltimore City.  Like this case, the purpose of those actions was to prevent the construction
of a hotel in Inner Harbor East.  The dismissal of the Waterfront action was affirmed by the
Court of Special Appeals in an unreported opinion.  Boitnott, which also was affirmed by
the intermediate appellate court, is pending in this Court.
The issue this case presents for the Court’s resolution is the meaning of  the term
“owned” for purposes of Maryland Code (1985, 1994 Repl. Vol., 1998 Cum Supp. )§6-
102(e) and §7-501 of the Tax-Property Article.      More specifically, we must ascertain
1
whether record or legal title is sufficient to satisfy the ownership requirement of §6-102.  The
Circuit Court for Baltimore City held that to satisfy the ownership requirement of §6-102 (e),
the developers of the planned hotel and parking garage to be located in the Inner Harbor East
area of Baltimore City would have to convey  to the City more indicia of ownership than the
record title that the Amended and Restated Development Agreement between the developers
and the Mayor and City Council of Baltimore called for.  The Circuit Court thereby
invalidated the ordinance enacted by the Mayor and City Council authorizing payments in
lieu of taxes (“PILOT”) in the case of that hotel and garage.  We and our precedents see it
differently.  Consequently, we reverse the judgment of the circuit court. 
  The facts of this case are not in dispute.  Pursuant to Ordinances 97-229 and 97-231,
enacted by the City Council and signed into law by the Mayor of the City of Baltimore , a
2
2
     Section 5 of the Ordinance defined hotel facilities as excluding gaming or gambling
3
activities and provided that “all PILOT Agreements executed pursuant to this Ordinance must
provide that the PILOT Agreement will terminate immediately if the property is no longer
used as a hotel facility....”
hotel, to be developed by appellant Inner Harbor East Hotel, LLC (“IHEH”),  and an
accompanying garage, to be developed by appellant Inner Harbor East Garage, LLC
(“IHEG”),  are to be built on two parcels of land located in the Inner Harbor East section of
the City and owned by appellant Inner Harbor East, LLLP (“HELP”), collectively “the
developers.”  On April 23, 1998, the Baltimore City Council  enacted Ordinance 98-253. 
That ordinance authorized the city to “exempt from municipal taxation hotel facilities...that
are on City-owned property within any urban renewal area and that, on or after January 1,
1998, are leased or otherwise made available to any person who uses the property in
connection with a business that is conducted for profit and who is authorized to accept a
PILOT in accordance with the terms and conditions of an agreement (a ‘PILOT
Agreement’)”  and  “to  negotiate a PILOT Agreement in connection with any lease after
3
January 1, 1998, of any City-owned property within any urban renewal area for use as hotel
facilities.   Section 4 of the Ordinance provides:
“That, for the purpose of this Ordinance, ‘City-owned property’ means any
ownership interest held by the City in the applicable real property, including
legal title to the property, whether in fee or as a leasehold interest, whether or
not subject to ground lease, and whether now owned or later acquired by the
City.”
Consistent with the provision in Section 3 of Ordinance 98-253, that the economic
terms of any PILOT “be approved by an Ordinance of the Mayor and City Council before
3
     As Ordinance 98-254 recited, the City had entered into a Development Agreement on
4
July 23, 1997.
the Board of Estimates gives final approval to the PILOT Agreement,” the City Council, on
that same day, enacted Ordinance 98-254, which specifically authorized the PILOT
Agreement that is the subject of this action.    That Ordinance set forth the findings of the
Mayor and City Council that authorization of a PILOT is in the City’s best interest because
it would encourage economic development in the City, promote the creation of job
opportunities, increase tourism, promote and improve the City and its facilities to the end of
fostering and maintaining its positive image, and generally contribute to the health, safety
and welfare of its citizens.   It then authorized the City to negotiate PILOT Agreements that
would be for a period of 25 years, with negotiated payments in lieu of taxes of $1 per year
for the term of the agreements, and provide: that the City have an interest in the profits of the
hotel facilities, for the City’s acquisition of any land necessary for the effectuation of the
PILOT Agreements and its lease, for a nominal amount,  to the developers and owners of the
hotel facilities, and for the inclusion of the assessment of the hotel facilities in the assessable
base of the City.
Subsequent to the enactment of the Ordinances, the City entered into an Amended and
Restated Development Agreement with HELP, IHEH and IHEG for the development of the
property.  That agreement detailed the financial arrangements applicable to the planned
4
development of the property.  The pertinent terms of the agreement, as summarized by the
trial court, are as follows:
4
“(1) Prior to the commencement of construction of the hotel and the garage,
the property would be conveyed by HELP to IHEH and IHEG.
“(2) After the construction of the hotel and garage, they would be conveyed
to the City for a consideration of ten dollars, such conveyance to occur prior
to the opening date.  The Agreement provides that the title to the City shall be
good and marketable, and free of all liens and encumbrances ‘other than
easements and use of agreements created to accommodate the operation of the
Hotel and Parking Garage, mortgage liens created by the developer and other
liens and encumbrances which have been created by the Developer or are the
result of Developer’s acts solely related to the Hotel or the Parking Garage.’
“(3) At the end of the twenty-five year term, the City agrees to reconvey the
property to the  Developer for a consideration of ten dollars.  The developer,
however, in its sole discretion, may elect to have the City reconvey the
property to it at any time, during any term, for the  same consideration.
 
“(4) During the time the City owns the property, it is unable to convey the
property nor is it able to place any liens or encumbrances on the property
except those approved by the Developer.  While the property is subject to
lease to the Developer, the Developer has the sole right to the use of the
property, and the City shall have no right to any use of the property.
“(5) The tenant shall have the right to perpetually renew the lease for
additional successive terms of 25 years each.  If the tenant does not give the
City notice that it will not renew the lease, then the tenant will be deemed to
have renewed the lease for the next term of 25 years without any further notice
to the City.
“(6) Although the City cannot convey the property, the tenant has the right to
assign the lease or sublet the premises or any portion of the premises without
the landlord’s consent.
“(7) Finally, the agreement provides that the City may receive a nine percent
non-cumulative preferential return on its investment, which could amount to
$594,000 per year, plus an additional ten percent of excess net cash flow.”
On the same day, the City also entered into PILOT Agreements with IHEH and IHEG. 
 Carolyn Boitnott and Nelson H. and Lily Adlin, the appellees, filed a Complaint for
5
       The court concluded, “... the City is severely restricted in its use of the property.  It can,
5
in effect, do nothing with the property.  It cannot mortgage the property; it cannot convey the
property; indeed, it only holds the property at the sufferance of the defendant developer.”
Declaratory Relief in the Circuit Court for Baltimore City, seeking, inter alia, to have the
Ordinances, the Development Agreement, and the PILOT Agreements  declared invalid.  In
the Complaint, the appellees alleged that Ordinance 98-254 is invalid because the City will
acquire only record title, rather than ownership, of the property to be leased to the
developers, thus  being unable to grant an exemption from the payment of municipal taxes
to them.  
In response, the City, HELP, IHEH, and IHEG,  as appellants moved to dismiss the
complaint, or in the alternative, for summary judgment. The non-City appellants also
requested, again in the alternative, that the Ordinances, the Development Agreement and the
PILOT Agreements  be declared valid.  Following a hearing, all of the appellants’ motions
were denied and the trial court declared the Ordinances invalid.  In its memorandum opinion,
focusing on the Development Agreement and noting the restrictions it placed on the City’s
use of the property to be deeded to it,  the trial court observed,  “[i]t does not seem ... that
this arrangement complies with any definition of ownership.”    Having held that the City
5
would not own the property under the Development Plan, the court stated:
“If the Legislature had meant for a subdivision to have the authority to
grant tax exemption with this limited and restricted degree of ownership, it
would have so provided.  Indeed the General Assembly may provide that a
taxing authority may grant a tax exemption and negotiate a payment in lieu of
taxes without any ownership interest.  The Legislature did not do so.[] This
court accordingly holds that the City exceeded the authority granted to it by
6
       In their cross-appeal, the appellees based their contention that they should be awarded
6
attorney’s fees on the premise that their suit saved the city from the loss that would have
occurred had the exemption been allowed.  Our decision on the appellant’s appeal destroys
that premise.  Without that premise, the appellant’s cross-appeal is without merit. 
      
Appellees argue in their brief that the PILOT ordinances are invalid because they
conflict with State law.  That issue was neither presented to, nor decided by the trial court.
Consequently, it is not preserved for our review. Maryland Rule 8-131(a).   Although the
Rule is discretionary, we decline to exercise our judgment in favor of review in this case.
the Legislature, and the tax exemption and PILOT granted by it to Defendant
Developer are illegal and void.”
 
Their timely filed Motions to Alter or Amend the Judgment having been denied, the
appellants noted  an appeal to the  Court of Special Appeals and the appellees filed a cross-
appeal, seeking the award of attorney’s fees for bringing this action.    This court, on its own
6
motion and prior to any proceedings in the intermediate appellate court, issued the Writ of
Certiorari to review the important issues that this case presents.   
II.
Section 6-101 identifies the property that is subject to tax.  It provides:
“(a)  In general.- (1) Except as otherwise provided in this article, all property
located in this State is subject to assessment and property tax and is taxable to
the owner of the property.  
“(2) Property subject to assessment and tax under this article
includes property owned or leased by the United States or any
agency or department of the United States, to the fullest extent
possible under the Constitution of the United States and the laws
of the United States.  
“(b)  Intangible personal property.- Intangible personal property is not subject
to assessment and property tax.”
7
     It provides:
7
“(a)  In general.- Except as otherwise provided in § 6-102 of this article and
except as otherwise provided under this section, government-owned property
is not subject to property tax, if the property:  
“(1) is devoted to a governmental use or purpose; and  
“(2) is owned by:  
“(i) the federal government;  
“(ii) the State;  
“(iii) a county or a municipal corporation; or  
“(iv) an agency or instrumentality of the federal
government, the State, a county, or of a municipal
corporation.  
“(b)  Limitation on agency or instrumentality ownership.- The exemption
provided for the property owned by an agency or instrumentality in subsection
(a) (2) (iv) of this section applies only to the extent that a law exempts the
property.”
 
Section 7-210  makes clear that government owned property, devoted to a governmental use
7
or purpose and owned by certain governmental entities, including a municipal corporation,
is not subject to tax.   The interest or privilege of a person leasing or using such property may
be subject to tax, however.   Section 6-102 (e) provides:
“(e)  Interests in government property.- Unless exempted under § 7-211, §
7-211.1, or § 7-501 of this article, the interest or privilege of a person in
property that is owned by the federal, the State, a county, or a municipal
corporation government is subject to property tax as though the lessee or the
user of the property were the owner of the property, if the property is leased
or otherwise made available to that person:  
“(1) by the federal, the State, a county, or municipal corporation
government; and  
“(2) with the privilege to use the property in connection with a
business that is conducted for profit.”
Except for Worcester County, Section 7-501 (b) permits all counties, and the Mayor and City
8
Council of  Baltimore to “authorize, by law, an exemption from county or municipal
corporation property tax for the property described in §6-102 (e) of this article and provide
for a negotiated payment in lieu of the tax.”
It is by the application of §6-102 (e) and §7-501 (d), in combination, that the authority
of the City to grant the exemptions in this case derives.   Therefore, before the exemptions
could be authorized, (1) the City must own the property, (2) which it then leases to a
business that is conducted for profit, (3) after enacting an ordinance providing for a
negotiated payment in lieu of taxes, and (4) that exempts the property from the payment of
municipal taxes.   Requirements (2), (3) and (4) have been satisfied.   That leaves to be
determined requirement (1), whether the City’s acquisition of record title suffices to satisfy
the ownership requirement.
Although not in the context in which it is presented in this case, this Court has
addressed the question of who is the owner of property for purposes of the State real property
tax law. Johns Hopkins Univ. v. Bd. Of County Comm’rs of Mont. Co., 185 Md. 614, 617,
45 A.2d 747, 748 (1946); Grand Lodge of Maryland v. Mayor and City Council of
Baltimore, 157 Md. 542, 546, 146 A. 744, 746 (1929); Latrobe v. Baltimore, 19 Md. 13, 20,
21 (1862).  The result reached in each of those cases is consistent with the definition of
“own” - “[t]o have a good legal title ... to have a legal or rightful title to ....”  Black’s Law
Dictionary (6  ed. 1990) 1105.  See Baltimore & O. R. Co. v. Walker, 16 N. E. 475, 480
th
(Ohio 1888).
In Johns Hopkins Univ., this Court reversed a trial court judgment in favor of the State
9
Tax Commission in its action to recover taxes on real property titled in the University’s
name.  The issue, whether taxing property held solely as agent or trustee for the United
States results in taxing the United States, arose in the following context.  Pursuant to a
contract with an agency of the United States government, the University purchased land, on
which it constructed a plant in which to conduct scientific research for the government. 185
Md. at  615-16, 45 A.2d at 747.  It paid for the land, the plant, the cost of the operations and
the taxes, for all of which the government reimbursed it. Id.  The contract between the
University and the government agency provided, inter alia: 
‘“The Contractor (Johns Hopkins University) shall convey to the Government
or to its designee, when and as directed by the Contracting Officer any lands
purchased hereunder or under said agreement for the cost of which
reimbursement is claimed hereunder or under said agreement, together with all
buildings, improvements, rights, and privileges, and appurtenances belonging
or appertaining thereto.”’
Id. at 616, 45 A.2d at 748.   
Addressing the State Tax Commission’s contention that  the record owner, “under the
Maryland law, is the owner for tax purposes and that the assessors are not required to go
back of the Land Records in determining to whom property is assessable,” the Court
confirmed that “[t]he general rule is that unless otherwise prescribed by statute, the trustee
as the owner of the legal estate would be assessed with the value of the land.” Id. at 617, 45
A.2d at 748, quoting Grand Lodge, 157 Md. at 546-47, 146 A.2d at 746.   Finding  further
support from Cooley on Taxation (4th Ed.) §1097 (“By the owner of property for the purpose
of assessment is meant the legal, and not the equitable, owner; therefore trustees having the
10
legal title are properly assessed.”) and Latrobe (“at law the legal estate in the hands of a
trustee, has the legal incidents and obligations of an absolute title, subject only to the claims
in equity of the cestui que trust.” 19 Md. at 21), we stated the rationale for the rule:
“This rule is commended by its utility, simplicity, and universality; and so
makes for the certain and prompt collection of taxes upon real estate.”
Id. at 617, 45 A.2d at 748.
That did not end the inquiry, however.  Noting that “[i]f this was a case not involving
property interests of the United States Government, the judgment of the Court below could
not be questioned,” id. at 618, 45 A.2d at 748-49, and finding Mesta Machine Company v.
County of Allegheny, Pa., 322 U.S. 174, 64 S.Ct. 908, 88 L.Ed. 1209 (1944) to be
dispositive, the Court held that the government owned property titled in the University’s
name was immune from taxation, explaining, 
“The title to the properties was in Hopkins, but, says the Mesta case, the title
may be in 'an officer, an agent, or a contractor.  His personal advantages from
the relationship by way of salary, profit, or beneficial personal use of the
property may be taxed as we have held.  But neither he nor the Government
can be taxed for the Government's property interest.'”   
Id. at 620, 45 A.2d at 749-50.  
 
To like effect is Grand Lodge.  The issue in Grand Lodge was a charitable and
benevolent corporation’s entitlement to an exemption for the buildings, equipments and
furniture of charitable and benevolent institutions.  In that case, the Grand Lodge delegated
to a building commission, which subsequently incorporated, the tasks of acquiring a new site
for its use and benefit and conveying the real estate purchased to the Grand Lodge. 
11
Although subsequently conveyed to the Grand lodge, taxes were assessed and levied on the
building at times when it was titled in the building commission “upon the active trust that it,
among other duties, would purchase the site and erect and complete thereon a building,
which, together with its site, would be necessary to the use of the Grand Lodge, a charitable
and benevolent institution of Baltimore; and, after fulfilling this part of its trust, would, in
further performance of its trust, deliver possession, and convey the premises to the Grand
Lodge clear and discharged of the trust.”  157 Md. at 546, 146 A.2d at 746.  The Grand
Lodge argued that, inasmuch as the taxes paid by the trustee are actually borne by the
beneficial owner, the general rule should not be applied, rather the beneficial owner should
be given the benefit of the exemption.   This Court rejected that argument:
“To reach this conclusion it is, however, necessary to abandon a principle of
taxation without any sanction from the Legislature, and to ignore a
construction of the tax laws of the state which the court has consistently
applied.  It would, moreover, enlarge the exemption to include a class of
taxpayers which are not within the language of the statute, and which can only
be held to be within its meaning by a broad and liberal construction, which
would be equivalent to a legislative act.  If the court would entertain such a
purpose because of equitable considerations, the Legislature has barred the
way by concluding the exemptions created by the explicit command that ‘each
and every one of said exemptions from taxation shall be strictly construed."’
Id. at 548, 146 A. at 746, citing Code Pub. Gen. Laws 1924, art. 81, §4.
Johns Hopkins Univ.  and Grand Lodge relied on Latrobe; indeed, Grand Lodge found
Latrobe to be dispositive of the issue before it.   In addition to stating that, for real estate tax
purposes, ownership is “the holding or ownership of the legal estate of the property to be
valued, without regard to the ownership of the equitable title or use,” 19 Md. at 21-22, the
12
     MLE, Property, §3, p.218 states:
8
“An owner is one who has dominion over the property which is the subject of
ownership, and the chief incidents of the ownership of property are the rights
of possession, of use, of enjoyment, and of disposition.”
     Black’s Law Dictionary  1107 (6th ed. 1991) defines “ownership” as:
9
Latrobe Court commented:     
“We are not aware that the Acts of Assembly, regulating the imposition and
collection of taxes, have effected any modification of the rules of law, which
otherwise must govern the  determination of this question.  The appellee, in
resorting to its remedy at law, assumes that the taxes assessed constitute a
legal cause of action, and that the appellant”(who was the trustee), “as the
holder of the legal title of the property upon which the assessment was made,
is liable for its satisfaction.  That taxes assessed upon a trust estate constitute
a legal cause of action against the title of the legal holder, we do not doubt, for
at law the legal estate in the hands of the trustee, has the legal incidents and
obligations of an absolute title, subject only to the claims in equity of the
cestui que trust.”(Citations omitted). 
19 Md. at 20-21. 
The appellees proffer two reasons for their contention that the circuit court judgment
should be affirmed.  First, they argue that since the developers can perpetually lease the
property, pursuant to §6-102 (d), the developers should be treated as the owner for tax
purposes.  Second, the appellees maintain that the developers, not the City, will own the
property.  For support, they rely on the terms of the Development Agreement, noting their
restriction of the City’s right to use the property, and the definition of “owner” as defined
in MLE, Property, §3, p.218,  and “ownership” as defined by Black’s Law Dictionary 1107
8
(6th ed. 1991),  concluding  that, 
9
13
“Collection of rights to use and enjoy property, including right to transmit it
to others....The complete dominion, title, or proprietary right in a thing or
claim.   The entirety of the powers of use and disposal allowed by law.”
“The City has none of the incidents of the ownership of property.   It doesn’t
have the right of possession, and will never have it.   It has no right of
enjoyment, and receives no income from the property.   It cannot dispose of
the property.   Moreover, the title it receives is subject to any mortgages or
other liens.”
“At most the City has only the bare record title,” they argue.   Pointing to §6-102 (c) and (d),
the appellees assert  that the statutory scheme for tax exemptions emphasizes the beneficial
use of property rather than the technicalities of ownership.   We do not agree.
Section 6-102  provides, in pertinent part:
“(a) Except as otherwise provided in this section, a leasehold or other limited
interest in property is not subject to property tax.
“(b) An interest of a life tenant or the owner of any other freehold estate in
property is subject to property tax as though the person in possession or the
user of the property were the owner of the property.
“(c) An interest of the mortgagor, pledgor, or conditional sale buyer in
personal property is subject to property tax as though the person in possession
or the user of the personal property were the owner of the personal property.
“(d) The following interests in real property are subject to property tax as
though the person in possession or the user of the property were the owner of
the property:
“(1) an interest of a tenant under a 99-year lease, whether or not
the lease is renewable;
“(2) an interest of a tenant under a lease for less than 99 years,
if the lease is perpetually renewable;  and
“(3) an interest of a mortgagor or grantor under a deed of trust.”
Under this section, the holders of certain leasehold interests are treated as owners of the
property, even though clearly they are not.  As the appellants point out, “[t]he only
interpretation under which a lessee can be treated ‘as though’ it were the owner is if someone
14
else - here, the municipality - were the owner.” See Meade Heights, Inc. v. State Tax
Commission, 202 Md. 20, 27-28, 95 A.2d 280, 284 (1953) (“The provisions of Section 3(c),
Article 81, Code of 1951, providing that the owner of certain limited interests in real and
personal property shall be treated as the owner in fee for purposes of taxation, merely allows
the person in possession to be taxed on the whole interest, where the whole interest is
taxable, for the convenience of the tax authorities.”).
 
Thus, if the appellees are correct, the above provisions are  of no importance at all
and, in fact, are mere surplusage.  See GEICO v. Insurance Commissioner, 332 Md. 124,
132, 630 A.2d 713, 717 (1993) (neither the words in the statute nor any portion of the
statutory scheme should be read "so as to render the other, or any portion of it, meaningless,
surplusage, superfluous, or nugatory." ). See also, DeBusk v. Johns Hopkins, 342 Md. 432,
445, 677 A.2d 73, 79 (1996).   Rather than having to resort to treating them as though they
were the owners of the property, the leaseholders would be deemed, by virtue of their
equitable incidents of ownership, to be the owners of the property.   
The appellees’ rationale would render §6-102 (e) meaningless as well.   In order to
grant an exemption and negotiate a PILOT, it is necessary for a municipal government to
give up and forego many of the incidents of ownership.    Indeed, that is the very premise on
which the enabling legislation, and the reality of lease arrangements, proceed.   As the
appellants state it:
“Indeed, by definition, the state PILOT law (§7-501 (b)) actually requires that
the City, as owner, lease the property to a for profit entity (§6-102 (e)).   To
grant a PILOT under §7-501, the City must forego certain incidents of
15
ownership (e.g., use and possession) by leasing the property to a private entity.
 Thus, by definition, the City always [has] less than a perfect, unencumbered
estate in the property for which it negotiates a PILOT because the statute
requires the City to have leased the land.  If by leasing its property the City
loses its status as owner, then no PILOT could ever be validly granted under
§7-501 (b) because the requirements of §6-102 (e) could never be met.”
Moreover, as Johns Hopkins Univ. indicated, citing Hill v. Williams, 104 Md. 595,
603-604, 65 A. 413, 414 (1906), the rule that, for purposes of assessment, owner means legal
title “is commended by its utility, simplicity, and universality; and so makes for the certain
and prompt collection of taxes on real property.”  185 Md. at 617, 45 A.2d at 748.
Simplicity is lost when inquiry must be made into the number of incidents of ownership that
the legal title holder has retained.  Furthermore, we recognized in Grand Lodge that “tax
assessors are but ill qualified to exempt real property according to equitable interests; and
the valuation and assessment of land are an administrative function which a sound public
policy would reduce to its simplest form.” 157 Md. at 550, 146 A. at 747. (citing Hill v.
Williams, 104 Md. at 603, 65 A. at 414).   See Meade Heights, 202 Md. at 27-28, 95 A.2d
at 284. 
Hill v. Williams, on which Johns Hopkins Univ. and Grand Lodge relied, was an
appeal from an order ratifying the sale of certain real estate by the Baltimore City tax
collector to satisfy unpaid state and city taxes.   An abutting property owner filed exceptions
to the ratification on the grounds that the lot of land designated as a vacant lot was an
alleyway.  As evidenced by her deed, the use by the abutting property owners was dedicated
as an alleyway.   Noting that she was the owner of a lot of ground binding on the alleyway
16
      The appellees attempt to align the instant case with our decision in Alban Tractor Co.
10
v. State Tax Commission, 219 Md. 593, 150 A.2d 456 (1959).  That case proves the wisdom
of the observation “‘that the term ‘owner’ is a ‘nomen generalissimum, and (that) its meaning
is to be gathered from the connection in which it is used, and from the subject matter to
which it is applied.’”’ Commercial Credit Corp. v. State, 258 Md. 192, 197, 265 A.2d 748,
751 (1970), quoting  Black's Law Dictionary (4th ed. 1951).   There, this Court was
presented with the issue whether a conditional sales agreement was, in actuality, a lease,
rather than a sale.  Noting that “[a] lease contemplates only the use of the property for a
limited time, and the return of it to the lessor at the expiration of that time; whereas, a
and shared with the public an easement over it, the exceptant suggested that the lot was not
a proper subject for taxation.   In overruling the exceptions, the Court stated:
“[The alleyway] was designed for the use of the occupants of the three lots
conveyed by the Slingluff deed to Mrs. Hill, and the only interest or estate
acquired by the grantee under that deed in that strip of ground was a right of
way from Pennsylvania avenue to the four-foot alley in the rear of her three
lots.  As the fee-simple title remained in the Slingluff estate, the land was
properly assessed to that estate.  It was no part of the duty of the appeal tax
court to inquire into or separately value the interest or easement which Mrs.
Hill secured under the deed.  And there is nothing in our general tax system
which compels the collector to examine what title a party has to land with
which he is assessed.  The assessments are made by other officers, and he is
not required to review or to verify their proceedings before making a sale. ...
It is not compatible with public convenience and the prompt collection of
revenue for the state to trace out all the subdivided or qualified interests that
may be held in real estate and seek to hold the various owners responsible.  Its
policy is to assess the fee-simple value of the land to the holder of the
possession, where its real owner is not apparent or accessible, leaving the
parties interested to adjust the proportions of liability between themselves.
Mayor, etc., Balto. v. Canton Co., 63 Md. 218 [(1885)].”
Hill v. Williams, 104 Md. at 603-4, 65 A. at 414.   See Eberhart v. Mayor and City Council
of Baltimore, 291 Md. 92, 115, 433 A.2d 1118, 1129 (1981), in which this Court, focusing
on the transaction as structured, rather than looking behind it, held that a sale-leaseback
arrangement was not the creation of debt in violation of the Maryland Constitution.    
10
17
conditional sale contemplates the ultimate ownership of the property by the buyer, together
with the use of it in the meantime,” id. at 597, 150 A.2d at 459, we determined that the
transaction was a sale since it was “clear that the title reserved by the seller in the property
when it was delivered to the buyer was in effect a reservation of a ‘security interest.”’ Id. at
598, 150 A.2d at 459.  We also concluded: “The judicial concept of taxation in this State and
the consistent administrative practice shows that the Legislature in using the term ‘owner’
did not intend that such term should embrace a bare title holder for security purposes.” Id.
at 601, 150 A.2d at 461.   This Court, therefore, rejected the State’s argument based on  how
the parties described the transaction and  the “lessor’s” retention of   “title.” Id. at 598, 150
A.2d at 459.  
Alban, however, presents a quite different factual scenario than the case at bar.  First,
it dealt with tangible personal property, as to which, we have previously recognized, different
rules apply than to real estate.  John Hopkins Univ. v. Bd. of County Comm’rs of Mont. Co,
185 Md. 614, 617-18, 45 A.2d 747, 748 (1946).  Moreover, as  noted by the developers,
Alban does not stand for the general proposition that anytime a title holder leases away its
right to use or occupy real property it is the owner. It merely confirms the firmly established
rule that, in personal property cases, individuals with title for security purposes only, are not
taxed as owners.  We decline to apply the Alban holding to the instant case.
That the parties, by their Amended and restated Development Agreement, have
restricted drastically the City’s right to use or enjoy the property is not fatal to the City’s
ownership claims.   As we have seen,  some restriction in the indicia of ownership is inherent
in the lease of property. See Bonneville v. State, 206 Md. 302, 314, 111 A.2d 669, 674(1955)
(acknowledging that an owner of a building may lease it to a tenant and the tenant may be
entitled to and may have exclusive possession of it).  Ownership for tax purposes is not
relinquished by contracting away what, in the absence of the lease arrangement, ordinarily
would be an absolute right of the lessor. See Black’s Law Dictionary (6  ed. 1990) 1105, in
th
which “owner” is defined as “the person in whom is vested the ownership, dominion, or title
18
of property; proprietor.   He who has dominion of a thing, real or personal, corporeal or
incorporeal, which he has a right to enjoy and do with as he pleases, even to spoil or destroy
it, as far as the law permits, unless he be prevented by some agreement or covenant which
restrains his right.”(Emphasis supplied).   That same authority states that “[t]he term ‘owner’
is used to indicate a person in whom one or more interests are vested for his own benefit [but
t]he person in whom the interests are vested has ‘title’ to the interests whether he owns them
for his own benefit or for the benefit of another.”  Id.   And, if a municipal corporation is to
grant an exemption and negotiate a PILOT, the lease of the property owned by the  municipal
corporation is anticipated - no - required, by §6-102 (e).  
JUDGMENT OF THE CIRCUIT COURT
                                                                          FOR  BALTIMORE CITY REVERSED.
       
COSTS TO BE PAID BY THE               
APPELLEES.