Case Title: Anderson/Maltbie Partnership v. Levin

Citation: 2010-Ohio-4904

Docket Number: 20091671

State: ohio

Court: Ohio Supreme Court

Date: 2010-10-12T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Anderson/Maltbie Partnership v. Levin, Slip Opinion No. 2010-Ohio-4904.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2010-OHIO-4904 
ANDERSON/MALTBIE PARTNERSHIP ET AL., APPELLEES, v. LEVIN,  
TAX COMMR., APPELLANT. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Anderson/Maltbie Partnership v. Levin,  
Slip Opinion No. 2010-Ohio-4904.] 
Real property tax — R.C. 5709.07 — Property cannot be exempted from taxation 
as a public schoolhouse when the owner leases the property to the school 
for profit. 
(No. 2009-1671 — Submitted May 25, 2010 — Decided October 12, 2010.) 
APPEAL from the Board of Tax Appeals, No. 2007-A-11. 
__________________ 
SYLLABUS OF THE COURT 
Property cannot be exempted from taxation as a public schoolhouse when the 
owner leases the property to the school for profit. (R.C. 5709.07(A)(1) 
construed.) 
__________________ 
 
 
SUPREME COURT OF OHIO 
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LANZINGER, J. 
{¶ 1} This is an appeal from a decision of the Board of Tax Appeals 
(“BTA”) concerning a real property tax exemption.  Appellee Anderson/Maltbie 
Partnership (“AMP”) is a for-profit entity that leases property to an Ohio 
community school.  Appellee LKH Victory Corporation is a nonprofit entity that 
runs the school under the name Cincinnati College Preparatory Academy 
(“CCPA”).  AMP and CCPA sought to exempt the parcel under R.C. 
5709.07(A)(1), the “public-schoolhouse exemption.”  The Tax Commissioner 
denied the exemption because of the for-profit nature of the lease, but the BTA 
reversed.  Applying its analysis from the earlier case Performing Arts of Metro. 
Toledo, Inc. v. Wilkins (Dec. 20, 2002), BTA No. 2001-J-977, reversed on other 
grounds 104 Ohio St.3d 284, 2004-Ohio-6389, 819 N.E.2d 649, the BTA held that 
the property was entitled to a tax exemption based on the lessee’s nonprofit use of 
the property as a public school.1 
{¶ 2} The Tax Commissioner appealed, and we now reverse. 
Facts 
{¶ 3} On December 30, 2002, AMP and CCPA jointly filed their 
exemption application, which sought to exempt the property for tax year 2002 and 
to obtain remission of taxes for tax years 1999, 2000, and 2001. The application 
cited R.C. 5709.07(A)(1) as the basis for exemption, and explained its claim as 
follows: 
{¶ 4} “[CCPA] is a public community school established under the 
authority of O.R.C. Chapter 3314, and was incorporated as an Ohio non-profit 
                                                 
1.  The BTA granted the exemption in Performing Arts, but on appeal, this court reversed on other 
grounds, holding that the exemption application had to be dismissed for lack of jurisdiction 
because the lessee, but not the owner, had applied.  Performing Arts, 104 Ohio St.3d 284, 2004-
Ohio-6389, 819 N.E.2d 649, ¶ 13, 15, 20.  Consistent with the holding of Performing Arts, only 
AMP as owner had standing to file the application in this case, and this opinion will usually refer 
to the appellants collectively as “AMP.” 
January Term, 2010 
3 
 
corporation on December 14, 1998.  [CCPA] was incorporated for educational 
purposes and operates as a community school.  As an entity organized for 
educational purposes, [CCPA] has applied for and received Internal Revenue 
Code §501(c)(3) tax-exempt status from the Internal Revenue Service as a public 
charity.  * * *  In accordance with O.R.C. §3314.02, [CCPA] entered into a 
charter contract with the State of Ohio Department of Education in 1999, which 
formally established [CCPA] as a public community school under Ohio law.” 
{¶ 5} At the BTA, the parties agreed to a set of stipulations based upon 
the documents in the record.  The stipulations included the following: 
{¶ 6} ● 
Since its inception in 1998, CCPA has operated as a 
community school for children in kindergarten through eighth grade. 
{¶ 7} ● 
On July 28, 1999, CCPA entered into a triple-net lease with 
AMP as lessor, and occupied the property under that lease and its amendments 
from October 7, 1999 through October 6, 2004. 
{¶ 8} ● 
AMP had purchased the property leased by CCPA in 1987 
for $1,325,000. 
{¶ 9} ● 
The monthly rental for the leased property was $22,958.04. 
{¶ 10} ● 
CCPA is contractually obligated under the triple-net lease to 
pay all real estate taxes and assessments during the lease term. 
{¶ 11} ● 
AMP did not conduct any business at the property during the 
lease term, other than leasing it to CCPA. 
{¶ 12} For its part, AMP stipulated that it was an “entity of two or more 
persons to carry on as co-owners a business for profit pursuant to O.R.C. § 
1775.05(A),” i.e., a for-profit partnership. 
Analysis 
{¶ 13} This case presents a significant issue that arises in the context of 
Ohio’s community schools.  By statute, a community school “is a public school, 
independent of any school district, and is part of the state’s program of 
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education.”  R.C. 3314.01(B); see State ex rel. Ohio Congress of Parents & 
Teachers v. State Bd. of Edn., 111 Ohio St.3d 568, 2006-Ohio-5512, 857 N.E.2d 
1148, ¶ 7 (detailing aspects of community schools).  Since 1852, Ohio law has 
provided the exemption for “public schoolhouses” that is currently codified at 
R.C. 5709.07(A)(1).  50 Ohio Laws 135, 137.  The exemption has been applied to 
public and private property: to public schools owned and operated by the public 
school districts in Ohio, and to nonprofit private and parochial schools operated 
for the public benefit. 
{¶ 14} Typically, public school districts own their own school buildings; 
but as a community school, CCPA is not owned and operated by any school 
district.  Community schools raise novel issues of exemption because, by statute, 
they qualify as public schools but often operate on privately owned property.  And 
in this case, the school occupies the property under a commercial, for-profit lease. 
{¶ 15} The Tax Commissioner in his final determination held that 
although community schools are public schools, the fact that the property is 
privately owned and is leased to the school under a for-profit lease makes the 
property ineligible for the exemption.  Because we conclude that the 
commissioner’s determination reflects a proper application of the standard for 
exemption that we articulated in Gerke v. Purcell (1874), 25 Ohio St. 229, 
paragraph eight of the syllabus, we reverse the decision of the BTA and reinstate 
the commissioner’s denial of the exemption. 
Property leased to a school under a for-profit lease is not exempt as a  
“public schoolhouse,” because private property can qualify for  
the exemption only if it is used “without any view to profit” 
{¶ 16} When a property owner applies for an exemption, we consider an 
overarching principle.  Because laws that exempt property from tax are in 
derogation of equal rights, they must be strictly construed.  First Baptist Church 
of Milford v. Wilkins, 110 Ohio St.3d 496, 2006-Ohio-4966, 854 N.E.2d 494, ¶ 
January Term, 2010 
5 
 
10; Campus Bus Serv. v. Zaino, 98 Ohio St.3d 463, 2003-Ohio-1915, 786 N.E.2d 
889, ¶ 8.  The principle of strict construction requires that the statute’s language 
be construed against the exemption, meaning that the onus is on the taxpayer to 
show that the language of the statute “clearly express[es] the exemption” in 
relation to the facts of the claim.  Ares, Inc. v. Limbach (1990), 51 Ohio St.3d 
102, 104, 554 N.E.2d 1310; Lakefront Lines, Inc. v. Tracy (1996), 75 Ohio St.3d 
627, 629, 665 N.E.2d 662; H.R. Options, Inc. v. Wilkins, 102 Ohio St.3d 1214, 
2004-Ohio-2085, 807 N.E.2d 363, ¶ 2; In re Estate of Roberts (2002), 94 Ohio 
St.3d 311, 314, 762 N.E.2d 1001.  The fact that the burden is on the taxpayer 
means that “ ‘[i]n all doubtful cases the exemption is denied.’ ”  A. Schulman, Inc. 
v. Levin, 116 Ohio St.3d 105, 2007-Ohio-5585, 876 N.E.2d 928, ¶ 7, quoting 
Youngstown Metro. Hous. Auth. v. Evatt (1944), 143 Ohio St. 268, 273, 28 O.O. 
163, 55 N.E.2d 122. 
{¶ 17} The statute we must consider is currently codified at R.C. 
5709.07(A)(1) and provides: “The following property shall be exempt from 
taxation:  (1)  Public schoolhouses, the books and furniture in them, and the 
ground attached to them necessary for the proper occupancy, use, and enjoyment 
of the schoolhouses, and not leased or otherwise used with a view to profit.” 
{¶ 18} The public-schoolhouse exemption was enacted along with other 
exemptions in the wake of the adoption of the new constitution in 1851.  50 Ohio 
Laws 135, 137.  Before the adoption of the 1851 Constitution, “the whole matter 
of taxation was committed to the discretion of the general assembly.”  Zanesville 
v. Richards (1855), 5 Ohio St. 589, 592.  And the “right to make exceptions and 
exemptions was unquestionable.”  Id.  But the 1851 Constitution circumscribed 
that power through Article XII, Section 2, which required uniform taxation of 
property and enumerated specific types of exemption the legislature could pass.  
Id. The legislature’s power to pass exemptions was construed to be limited to 
exemptions expressly authorized by the Constitution.  Id. at 592-593; Denison 
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Univ. v. Bd. of Tax Appeals (1965), 2 Ohio St.2d 17, 24, 31 O.O.2d 10, 205 
N.E.2d 896. 2 
{¶ 19} This court in Gerke, 25 Ohio St. 229, considered the claimed tax 
exemption of Catholic parochial schools in view of the specific constitutional 
authorizations and the statutory language of the exemptions.  We determined that 
the Constitution’s authorization of a public-schoolhouse exemption was 
applicable only to school buildings that “belong to the public,” buildings that “are 
designed for the school established and conducted under the authority of the 
public.”  Id. at 242.  In contrast, we held that the statute’s reference to public 
schoolhouse is “not used in the sense of ownership” but rather of the “uses to 
which the property is devoted,” with the result that the exemption applies to 
private property used to support instruction that is “for the benefit of the public.”  
Id. at 246-247. 
{¶ 20} The term “public” was construed differently in the statute to make 
sense of the statute’s limitation that the schoolhouse grounds must not be “leased 
or otherwise used with a view to profit.”  Because political subdivisions such as 
public school districts are inherently nonprofit, the condition did not seem 
“appropriate if intended to apply only to institutions established by the public.”  
Id. at 247.  On the other hand, the prohibition against making a profit had 
“marked significance when applied to private property,” and accordingly the 
statute was construed to reach private property.  Id.  The constitutional basis for 
exempting private property when used as a school lay in the authorization of 
exemptions for “institutions of purely public charity.”  Id. at 243-244.  As a result, 
the “exclusion of all idea of private gain or profit” constitutes a basic condition 
that private property must satisfy to qualify for this exemption.  Id. at 247. 
                                                 
2.  In 1931, an amendment restored to the General Assembly the plenary power to enact 
exemptions:  the power is limited only by the provisions of Article I of the Constitution.  See 
Denison Univ., paragraph three of the syllabus; Dayton v. Cloud (1972), 30 Ohio St.2d 295, 59 
O.O.2d 370, 285 N.E.2d 42, paragraph one of the syllabus. 
January Term, 2010 
7 
 
{¶ 21} One dispute between the parties is therefore immaterial: the 
question whether R.C. 5709.07’s limiting clause “not leased or otherwise used 
with a view to profit” applies to the schoolhouse itself as well as the “ground 
attached to” the schoolhouse.  Ultimately, the dispute is inconsequential because 
the holding of Gerke clearly establishes that the schoolhouse itself cannot qualify 
for exemption unless it is used “without any view to profit.”  Gerke, paragraph 
eight of the syllabus. 
{¶ 22} Gerke holds that the public-schoolhouse exemption does extend to 
privately owned property, but only when that property is “appropriated to the 
support of education for the benefit of the public without any view to profit,” an 
essential element being the “exclusion of all idea of private gain or profit.”  Gerke 
at 247.  By seeking to exempt a commercial office building that is leased to the 
school for profit, AMP seeks a broader exemption, an application that we reject. 
{¶ 23} The Tax Commissioner’s final determination did not cite Gerke, 
but he did deny AMP’s exemption because the property was subject to a for-profit 
commercial lease.  We hold this analysis to be correct under Gerke:  property 
cannot be exempted from taxation as a public schoolhouse when the owner leases 
the property to the school for profit.3 
Cleveland State Univ. v. Perk does not authorize the grant of a  
public-schoolhouse exemption when land with permanent structures  
                                                 
3.  Although he did not properly raise the alternative argument, the Tax Commissioner cites cases 
that allegedly overrule Gerke’s holding that a schoolhouse could be “public” even though 
privately owned.  We disagree.  The later cases the Tax Commissioner cites in this regard do not 
undermine Gerke.  See Weir v. Day (1878), 35 Ohio St. 143 (granting injunction against private 
school’s use of a public school building under a lease given the circumstances of the case; this 
case does not address any issue of taxation or exemption); Gilmour v. Pelton (1877), 5 Ohio 
Dec.Rep. 447 (although common pleas court exempted parochial schools based on a charitable 
exemption rather than the public-schoolhouse exemption, according to the unofficial reporter’s 
note on the history of the case in Ohio Decisions Reprint, the Supreme Court’s affirmance cited 
and did not retreat from Gerke); Watterson v. Halliday (1907), 77 Ohio St. 150 (holding that 
parish houses used as residences by priests did not qualify for a charitable exemption or an 
exemption for a house of worship; this case does not address the schoolhouse exemption). 
SUPREME COURT OF OHIO 
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is leased to a school for profit under a commercial lease 
{¶ 24} Both the BTA decision and AMP’s brief heavily rely on Cleveland 
State Univ. v. Perk (1971), 26 Ohio St.2d 1, 55 O.O.2d 1, 268 N.E.2d 577.  
Cleveland State is inapposite for two reasons.  First, Cleveland State involved 
temporary modular structures installed on the university’s land.  Both the 
reasoning and the syllabus law of that case restrict Cleveland State’s holding to 
that particular situation.  Second, although the public-college exemption in R.C. 
5709.07(A)(4) generally parallels the public-schoolhouse exemption at R.C. 
5709.07(A)(1), the former expressly authorizes a broader exemption of 
“buildings” so long as they are “connected with” the public college. 
{¶ 25} In Cleveland State, the university (an instrumentality of the state of 
Ohio) enjoyed the exemption of a parcel of land under R.C. 5709.08, which 
exempts “public property used exclusively for a public purpose.”  Not having the 
wherewithal to construct permanent buildings on the site, Cleveland State 
University rented temporary modular buildings that were installed at the site and 
used for classrooms and faculty offices.  The narrow question was whether the 
modular buildings could qualify for exemption from real property taxation under 
the public-college exemption. 
{¶ 26} In answering affirmatively, we noted two significant predicates for 
granting the exemption.  First, this court had rejected the proposition that college 
buildings were required to be used for “charitable purposes” to qualify for 
exemption.  Cleveland State, 26 Ohio St.2d at 6, citing Denison Univ., 2 Ohio 
St.2d 17, 31 O.O.2d 10, 205 N.E.2d 896, paragraph four of the syllabus.  Second, 
given the structure of the public-college exemption, the express limitation to 
property “not used with a view to profit” applied only to the “lands connected 
with” public colleges, not to the separately referenced “buildings connected with” 
the institution.  Cleveland State at 6-7, citing Kenyon College v. Schnebly (Knox 
C.P.1909), 12 Ohio C.C.(N.S.) 1, affirmed 81 Ohio St. 514.  R.C. 5709.07(A)(4) 
January Term, 2010 
9 
 
exempts “[p]ublic colleges and academies and all buildings connected with them, 
and all lands connected with public institutions of learning, not used with a view 
to profit”; the “not used with a view to profit” language modifies “lands,” but not 
“buildings.” 
{¶ 27} Combining these principles, we concluded that the modular 
buildings qualified as “buildings connected with” the university since they were “ 
‘with reasonable certainty used in furthering or carrying out the necessary objects 
and purposes of the college.’ ”  Cleveland State at 8, quoting Denison Univ. at 21-
22.  The syllabus states that an exemption could be allowed for “buildings located 
on the campus of a state university and used exclusively for classrooms and 
faculty offices” even though the buildings were “leased for a term of years, with 
provision for rental therefor, from a corporation for profit.”  Cleveland State, 
paragraph two of the syllabus.  Cf.  Athens Cty. Aud. v. Wilkins, 106 Ohio St.3d 
293, 2005-Ohio-4986, 834 N.E.2d 804, ¶ 19-22 (public-college exemption not 
available for off-campus private dormitories owned by a for-profit company, 
when college did not lease the buildings and would not itself benefit from the tax 
exemption). 
{¶ 28} In contrast, the present case raises the distinct issue whether the 
“schoolhouse” itself and the land beneath it may qualify for a public-schoolhouse 
exemption, when both are leased from a for-profit landlord.  Cleveland State does 
not control the present case, and we cannot extend its holding to the present facts 
in light of the restrictive character of the public-schoolhouse exemption. 
Although leased property may sometimes qualify for exemption, property  
subject to a commercial lease with a for-profit landlord does not qualify 
{¶ 29} AMP also contends that a commercial lease is irrelevant to the 
issue of exempt status so long as the lessee uses the property for exempt purposes.  
AMP emphasizes certain decisions that allow the exemption of leased property. 
SUPREME COURT OF OHIO 
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{¶ 30} This argument raises two questions.  The first is whether 
ownership and use must coincide for a building to qualify as an exempt public 
schoolhouse.  Gerke answers this question by declaring that the “public” in public 
schoolhouse “is not used in the sense of ownership, but as descriptive of the uses 
to which the property is devoted.”  Gerke, 25 Ohio St. at 246-247.  Thus, property 
“appropriated to the support of education for the benefit of the public without any 
view to profit” qualifies for exemption, id. at 247, and that standard contains no 
requirement that the owner be the entity that operates the school.  It follows that a 
community school that leases its building may still receive the benefit of tax 
exemption as a public schoolhouse. 
{¶ 31} But property subject to a commercial, for-profit lease is a different 
matter.  Gerke specifically limits the exemption of privately owned property to 
property that is used “without any view to profit.”  The second question raised by 
AMP’s argument is whose use should be considered, the lessee’s, or both the 
lessor’s and the lessee’s? 
{¶ 32} AMP relies on Bexley Village, Ltd. v. Limbach (1990), 68 Ohio 
App.3d 306, 588 N.E.2d 246, to maintain that the commissioner and the BTA 
must focus exclusively on the lessee’s use of the property.  In Bexley Village, the 
Tenth District Court of Appeals granted the public-college exemption for a 
parking lot that was leased by a private developer to Capital University for a rent 
of $1 per year.  Instead of drawing the obvious conclusion that the nominal 
character of the rent assured that the lease was not-for-profit, the Tenth District 
held that in deciding whether the property was “used with a view to profit” one 
entity must be considered, which in that case was the lessee Capital University. 
{¶ 33} Because Bexley Village addresses the public-college exemption, 
we regard the case as inapposite.  We hold that under the public-schoolhouse 
exemption, the restriction that the property not be used with a view to profit 
requires examination of the total use of the property by both lessor and lessee.  If 
January Term, 2010 
11 
 
the lease is intended to generate profit for the lessor, the property does not qualify 
for exemption; similarly, the property does not qualify if the lessee’s use is 
intended to generate profit.4 
{¶ 34} It follows that because AMP leases the property to CCPA under a 
for-profit lease, the public-schoolhouse exemption is not available in the present 
case. 
Case law interpreting the exemption for houses of  
public worship does not apply to this case 
{¶ 35} AMP also relies on BTA decisions in which the BTA reversed the 
Tax Commissioner’s denial of exemption under R.C. 5709.07(A)(2), the house-
of-public-worship exemption.  See Gary Clair/Christ United Church v. Tracy 
(Sept. 11, 1998), BTA No. 97-K-306; Northcoast Christian Ctr. v. Tracy (July 18, 
1997), BTA No. 96-M-811; Jubilee Christian Fellowship, Inc. v. Tracy (May 17, 
2002), BTA No. 99-R-239. AMP argues that denying the exemption in this case 
necessarily contradicts the grant of exemption in those cases.  We disagree.  
Although each of the BTA cases that AMP cites involved a religious congregation 
leasing a building for use as a place of worship under leases that were commercial 
— or presumed to be commercial, these cases are not dispositive of the issue 
before us. 
{¶ 36} The issue of whether buildings devoted to public worship that are 
subject to a commercial lease are tax exempt is not before us, and we do not 
decide it.  But the analysis differs in cases involving houses of public worship 
because Gerke’s requirement that a privately owned schoolhouse be operated 
“without any view to profit” does not apply to them.  Unlike schoolhouses, houses 
of worship, by their nature, are privately owned.  Moreover, the 1851 Constitution 
                                                 
4.  We note, however, that there may be situations in which an exemption could be allowed under 
R.C. 5709.07 even though the property generated rental income for the owner.  See R.C. 
5709.07(B) (possibility of exemption for leased property when income goes to municipal 
corporation or school district).    
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explicitly authorized an exemption for houses of worship, whereas it did not 
authorize exemption of private schools unless they were “institutions of purely 
public charity.” 
{¶ 37} Furthermore, the exemption for houses of public worship as 
currently codified does not expressly prohibit a for-profit use of the building 
devoted to worship.  Although for more than a century this exemption and the 
public-schoolhouse exemption were closely linked, that link was broken in 1988 
with the enactment of Am.S.B. No. 71.  142 Ohio Laws, Part I, 147 (“S.B. 71”).  
S.B. 71 separately codified them at R.C. 5709.07(A)(1) (exemption for public 
schoolhouse) and at R.C. 5709.07(A)(2) (exemption for house of public worship).  
The latter exemption now provides the exemption for “[h]ouses used exclusively 
for public worship, the books and furniture in them, and the ground attached to 
them that is not leased or otherwise used with a view to profit and that is 
necessary for their proper occupancy, use, and enjoyment.”  R.C. 5709.07(A)(2).  
That wording unambiguously applies the not-for-profit limitation only to the 
“ground attached” to the building, not to the building itself.  It follows that any 
limitations on the exemption for the building must relate to the requirement that it 
be used exclusively for public worship. 
The Tax Commissioner’s argument that Gerke  
has been overruled is jurisdictionally barred 
{¶ 38} Departing from the analysis he employed in his final 
determination, the Tax Commissioner’s briefs in this court insist that our case law 
holds that the public-schoolhouse exemption applies only when the property is 
publicly owned, i.e., owned by the state or a political subdivision such as a school 
district.  As indicated in footnote three of this opinion, the cases cited by the Tax 
Commissioner do not overrule Gerke.  But we lack jurisdiction to address this 
assertion as a ground for reversal, because the Tax Commissioner did not assign 
any error in the notice of appeal in relation to this argument.  See Fogg-Akron 
January Term, 2010 
13 
 
Assoc., L.P. v. Summit Cty. Bd. of Revision, 124 Ohio St.3d 112, 2009-Ohio-6412, 
919 N.E.2d 730, ¶ 12, citing Newman v. Levin, 120 Ohio St.3d 127, 2008-Ohio-
5202, 896 N.E.2d 995, ¶ 28. 
Conclusion 
{¶ 39} The BTA erred by granting a public-schoolhouse exemption for 
property owned by a commercial landlord and leased to a community school 
under a for-profit lease.  We therefore reverse the decision of the BTA and 
reinstate the Tax Commissioner’s denial of the exemption. 
Decision reversed. 
 
BROWN, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O’DONNELL, and CUPP, JJ., concur. 
__________________ 
 
LUNDBERG STRATTON, J., concurring. 
{¶ 40} Case law constrains me to concur in the majority’s holding, but I 
write to express my concern that our holding places community schools in a 
conundrum as to how to pay property taxes on leased property, because 
community schools are funded by state funds but are prohibited by law from 
using those funds to pay taxes. 
{¶ 41} Cincinnati College Preparatory Academy (“CCPA”) is a 
community school as defined in R.C. Chapter 3314.  Pursuant to R.C. Chapter 
3314, community schools are public schools and are part of the state’s program of 
education.  R.C. 3314.01(B).  Thus, community schools receive state funding.  
See R.C. 3314.08.  However, community schools cannot use state funds to pay 
any taxes that they owe.  R.C. 3314.082. 
{¶ 42} CCPA leased property to use for its schoolhouse pursuant to a 
triple-net lease, which is standard practice for commercial properties and requires 
the lessee to assume certain obligations pertaining to the leased property, 
including utilities, maintenance, insurance and taxes.  See, e.g., AEI Net Lease 
SUPREME COURT OF OHIO 
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Income & Growth Fund v. Erie Cty. Bd. of Revision, 119 Ohio St.3d 563, 2008-
Ohio-5203, 895 N.E.2d 830, ¶ 6.  Thus, CCPA was obligated by the lease to pay 
any taxes due on the property. 
{¶ 43} Generally, R.C. 5709.07 exempts property from taxation that is 
used for certain charitable activities, and in particular subsection (A)(1) exempts  
from taxation “public schoolhouses” and “the ground attached to them” as long as 
the property is “not leased or otherwise used with a view to profit.”  In my 
opinion, it is the lessee’s use of the property that should determine whether the 
property qualifies for a tax exemption under R.C. 5709.07(A)(1).  For example, if 
the lessee uses property for a public schoolhouse and has no view to profit in 
doing so, the property should be exempt from taxation.  However, as the majority 
opinion makes clear, case law does not support my view, and instead supports our 
holding that a public schoolhouse is not exempt from taxation if the owner of the 
property leases it with a view to profit. 
{¶ 44} My concern is that our holding creates a predicament for 
community schools that lease the property and buildings that they use to operate 
the schools.  Under our holding, lessors who lease property for use as a 
schoolhouse will fail to qualify for an exemption under R.C. 5709.07(A)(1) when 
the lessor leases the property with a view to profit.  The property-tax obligation is 
passed on to the community school pursuant to the triple-net lease.  However, 
community schools are prohibited by law from using state funds to pay these 
taxes.  In my opinion, disqualifying property from the schoolhouse exemption 
when it is used for a public schoolhouse merely because the property’s lessor has 
a view to profit seems to run contrary to the general intent within R.C. 5709.07, 
and causes community schools that lease property to face a conundrum as to how 
they will pay the real estate taxes. 
{¶ 45} Accordingly, although I concur in the holding in this case, I invite 
the General Assembly to amend R.C. 5709.07(A)(1) if they share my concerns.  
January Term, 2010 
15 
 
The General Assembly created an exemption for buildings that are “connected 
with” colleges irrespective of whether the lessor leases buildings with a view to 
profit.  See Cleveland State Univ. v. Perk, (1971), 26 Ohio St.2d 1, 55 O.O.2d 1, 
268 N.E.2d 577.  The General Assembly could amend R.C. 5709.07(A)(1) to 
achieve a similar result. 
{¶ 46} Accordingly, I concur. 
__________________ 
 
Eastman & Smith Ltd., Graham A. Bluhm, M. Charles Collins, and Amy 
J. Borman, for appellees. 
 
Richard Cordray, Attorney General, and Lawrence D. Pratt, Barton A. 
Hubbard, and Sophia Hussain, Assistant Attorneys General, for appellant. 
______________________