## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Franciscan C

om m uni ties, Inc. v. Ham er , 2012 IL App (2d) 110431

Appellate Court Caption FRANCI SCAN COMMUNI TI ES, I NC., Plaintiff-Appellant, v. BRIAN A. HAMER, Direc tor of the Depart m ent of Revenue
, THE DEPARTMENT OF REVENUE, THE LAKE COUNTY BO ARD OF REVI EW, and THE BO ARD OF EDUCATI ON OF L AKE VI L L A COMMUNI TY CONSOL I DATED SCHOOL DI STRI CT NO. 41, Def endants-A

ppellees.

District & N o. Second District Docke t No. 2-11-0431

Filed August 28, 2012

Held (N ote : Thi s syl lab us

con st it ute s no par t of the opi nio n of the cour t but has bee n pre

par ed by t h e Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) Plaintiff relig ious org anization wa s n o t entitled to a relig ious-use or a char itable-use pr operty

tax exemption for its continuing ca re r etireme nt community , except for the c hapel, since the primary use of the pr operty

was for upscale seni o r h o u s ing and car e, the Depa rtment of Revenue ’s deter mination that the proper

ty was operated with a view to profit was not clea rly err oneous, and the fac tors considere d in det ermining whether
proper ty is use d exclusively for char itable purposes weig hed in f avor of taxation.

Dec ision Under
Review Appea l from the Circuit Court of L ake Co u n t y , No. 09-MR-1830; the Hon. Marg are t J . Mullen, J udg e, pre siding.

J udg ment Affir med.Counsel on

Appea l J ohn J

. Durso, Edwar d Clancy
, Timothy E. Horton, Seth A. Horvath, and Emily M. Dierbe rg -Armstrong
, all o f Un gare tti & Har ris L L P, of Chicag o, for a

ppellant.

L i s a Madig an, Attorney Gene ral, of Chicag o (Michae l A. Scodro, Solicitor Gene ral, and Evan Siege l, Assistant Attorney Gene ral, of counsel), f

or appe llees B rian A. H amer and De partment of Re venue.

Va n es s a V. Clohessy and Steven M. Richart, both of Hodg es, L oizz i, Eisenhammer
, Rodick & Kohn, L L P, of Arling ton Heig hts, for appellee Boa rd of Edu ca t ion of L ake Villa Communi ty Consolidated School District No. 41.

Panel J USTI CE Z ENOF F de livered the judgme nt of the cour t, with opinion.
J ustices McL are n and B irkett conc urre d in the judgme nt and opinion.

OP INION

¶ 1 Fr ancisc an C ommuniti es, I nc. (FC), appeals fr o m an o rder of t he circuit court of L ake County aff

irming the decision of the Direc tor of the I llinois Depa rtment of Revenue (DOR)
to deny FC’s application for a proper ty tax exemption, except fo r t h e ch ap el, based on claimed relig ious and char itable uses of its proper ty in L indenhurst, I llinois

. For the rea sons that follow, we a ffirm.

¶ 2 I . BA CKGROUND ¶ 3 FC owns a continuing car e retire ment community (CCRC ) called the Villag e at Victory L akes (VL ), which is located in L indenhurst, I llinois

. FC i s a n o t -f or-pr ofit corpor ation of the Fr ancisc an Sist ers of Chicag o Service Corporation, Inc. (F SCS C), which is owned by the Fr ancisc an Sist ers of Chicag o (Sisters), a pontifical instit ute of relig ious women that is part of the Roman Catholic Church a nd repor ts to the Pope. ¶ 4 FC filed an application seeking exemption from 2007 rea l estate taxes for VL

. The L ake County board of revie w (B OR) re commended that the ex emption be denied, and the DOR

acc epted the BO R’s rec ommendation. FC appea led the DOR’s d en i al, and the Boa rd of Education of L ake Villa Communi ty Consolidated School District No. 41 (school district)

was g iven leave to inter

vene upon a showingthat its revenue s would be adver sely aff ecte d if FC rec eived a proper

ty tax exemption. Following an extensi v e ev i d enti ary hear ing, the administrative law judg e (A L J ) re commended that the DOR’s denia l be af firmed, with the

-2-exception of allowing exemption for t h e p ro perty ’s chape l. The Direc tor of the DOR

acc epted the AL J ’s rec o mm e n d a ti o n , a nd FC filed a complaint seeking administrative revie w in the circ uit court of L ake Co u nty , which aff irmed the Direc tor’s decision. FC filed this timely appea l. ¶ 5 The rec ord includes the fo l l o wi n g re l ev an t evidenc e that was adduce d at the hea ring befor e the AL J

. In 2007, VL provided sever al tiers of service s to seniors: independe nt living
apar tments and g arde n homes; assisted living units; and a skille d n u rsi ng cente r, which in c lu d e d an Alzheimer’s unit, reha bilitation fac iliti es, a Medica re prog ram, and g ener al longterm car e. The conce pt of the CCR C was that healthy
, active seniors woul d enter the community at the independe nt living level and avail themselves of the o ther tiers as their health declined. Amenities, such as a beauty salon and country store, wer e located on VL ’s premises. ¶ 6 VL re q u i re d a 9 0 % re fu ndable entra nce fee plus a monthly service packa g e for the i n d ep endent living g arde n homes. Depe nding on the home’s sty le and square footage, t h e entra nce fee s in 2007 rang ed from a low of $244,186 with a month ly service packa g e of $1,248, to a high of $332,608 with a monthly service packa g e of $1,771. The amount of the
mont h l y service packa g e incre ased if a second person wer e to inhabit the home. The 90% ref undable entra

nce fee s for independe nt living apar tments r ang ed from a low of $127,596 (472 square fee t) with a m o n t h l y service packa g e of $1,630, incre asing
, based on square footag e, to a high of $252,525 (951 square fee t) with a monthly service packa g e of $2,445. An individual g ara g e was an additional $88 per month, and the service packa g e for a second
person was $667. Monthly fee s for the assisted living units beg an at $3,881.36 and incre ased
to $4,741.16, depending upon the sty le of unit. A second person paid an additional $648.72
per month. Prior to admission, one month’s fee was due in advanc e as well as a second month’s fee to cover a secur ity deposit. In 2007, the basic daily fee was $167 for intermediate

car e and $197 for skilled, Alzheimer’s, and respite car e. VL char g ed an additional daily fee for a private room. There wer e ancillar y char g es for things like activities, phy sical thera py , speec h thera

py , occupational thera

py , nursing service s and supplies, and beauty shop, escor t, and dietar y service s. ¶ 7 Residency ag ree ments for the i n d ep en d en t l i v i n g u n its provided for termination of residenc y under cer

tain conditions, for instance, if a resident filed for bankruptc y protec tion

or failed to pay the monthly service fee or other amounts owed to VL when due, unless other mutually satisfac tory arr ang em ents wer e made. In 2007, VL ’s g ross reve nue from its residents was $ 1 7

. 4 m i l lion. Net reve nue from residents was $15.6 milli on. Oper ating

ear nings be fore income tax, deprec iation, and amortization were $1.5 milli on. ¶ 8 FC provided “Gift of Care” assistance for new and exis ting re s i d en t s i f their other

resour ces had been exhausted. The considerations for a “Gift of Care” wer e the availability of financ ial assistance funds; the resident’ s total assets; the resident’ s ability to obtain thirdparty reimburse ment; the resident’ s seniority ; and the date of the “Gift of Care” application. In 2007, not ever

y application for “Gift of Care” assistance was approve d. Funds advanc ed under a “Gift of Care” wer e rec overa ble by VL from the resident’ s 90% ref undable fee s (or the re sident’s estate)

.

-3-¶ 9 I t was undisputed that the Rom an C at h o l i c C h u rc h (Church) and the Sist ers we re

relig ious org anizations. The Sist ers participate in the relig ious life of t h e Church. Their specific “cha

rism” (the spirit that impels their particula r apostolate ) is to g ive service to the

1 elder ly . They car

ry this out by operating (throug h their cor porations) CCRCs. S tewar dship is one of their values, meaning that they must opera te their CCR Cs as businesses so that they

can continue and expand t h ei r s er v ice to the ag ed and infirm. In 2007, none of the Sist ers lived at VL
, which they purcha sed from a secular entity in 2006. The S isters m ai n t ai ned a
prese nce at VL throug h its vice- president and its direc tor of mission integ ration and pastoral

car e. Throug h th es e p ersons, relig ious cer emonies, and occa sional visits by some of the Sist ers, the Sist ers’ spirit and values wer e transmitted to VL ’s employ ees, who wer e not all Catholics. Neither wer e all of the residents Catholics, nor wer e they require d to be believer s. For this rea son, the Sist ers did not place relig ious icons or art in the residents’ homes,
apar tments, and units, althoug h relig ious sy mbols were place d in public are as. When the S i s ters purcha sed VL
, the chape l was being used for parties and book fairs. The Sist er s instructed that those uses cea se, and they require d that the ch ap el be used exclusively for ref lection and worship, having installed a taber nacle and Eucha

rist. Mass was said in the chape l. Hy

mn singing
, Bible studies, and the Rosary wer e held in other parts of the premises.

¶ 10 I I . ANALYSI S ¶ 11 We revie w the administrative ag ency ’s d ec i s i on rathe r than the trial court’s de cision. Armenian Church of Lake Bluff v

. Departme nt of Rev enue , 2011 I L App (1st) 102249, ¶ 2. Where resolution of the case require s deter mining the leg al eff

ect of a g iven set of fac ts, the
ag ency ’s decision should be aff irmed unless it is clea

rly err oneous. Three Angels Broadcasting Network, Inc. v. Departme nt of Rev enue , 381 I ll. App. 3d 679, 693 (2 0 0 8 ). Her e, our inquiry is whether the fac ts satisfy a statutory standard for tax exemption; henc e,

we apply the clea

rly err oneous standard of revie w. Three Angels
, 381 I ll. App. 3d at 693. In revie wing the ag ency ’s deter mination on a mix ed question of law and fac t for clea r err or, we g ive signific ant defe renc e to the ag ency ’s experience in construing and applying the statutes that it administers. Three Angels
, 381 I ll. App. 3d at 6 9 3

. An age ncy ’s decision is clea rly

err oneous only wher e the revie wing court, on the entire rec ord, is le ft with the definite a nd firm conviction that a mistake has bee n committed. Three Angels , 381 I ll. App. 3d at 693. ¶ 12 Under I llinois law, taxation is the rule, and tax exemptio n i s t h e ex ce p t i o n. Provena Covenant Medic al Ce nter v. Departme nt of Rev enue , 236 I ll. 2d 368, 388 (2010) (plurality
op. ) (P r o ve n a II

). All proper

ty is subject to taxation unless it is exempt by statute, and
statutes g ranting exemptions must be strictly construed in favor of taxation. Provena II
, 236 I ll. 2d at 388. The party claiming an exemption must prove by clea r and convincing evidenc e that the s ubject property falls wit hin both the consti tutional authorization and the terms of the statute under which the exemption is claimed. Provena II
, 236 I ll. 2d at 388. A basis for exemption cannot be inferr ed wher e none has been demonstrated. Provena II
, 236 I ll. 2d at 388. All fac ts are construed, and all debata ble questions reso l v ed
, in favor of taxation.

T he a pos tol at e i s t he f

ulf il lment o f t he S is te rs ’ miss ion in th e wor ld. 1

-4-Provena II
, 236 I ll. 2d at 388. Every presumption is ag ainst the i n t en tion of the state to exempt property

from taxation. Provena I I , 236 I ll. 2d at 388. ¶ 13 Article IX of the I llinois Constit ution pr ovides that the Gene ral Assembly may exempt all proper ty used exclusively for relig ious and char itable purposes. I ll. Const. 1970, art. I X, § 6; Fairview Have n v. Department of Rev enue , 153 I ll. App. 3d 763, 770 (1987). Section 15-40(a )(1) of the I llinois Property Tax Code (Code) (35 I L CS 200/15-40(a) (1) (West 2006)) provides, “Proper

ty used exclusively for *** relig ious purposes *** qualifies for exemption

as long as it is not used with a view to profit.” Pursuant to section 15-65 of the Code, in order
to qualify for a charitable exemption, the subject proper ty must be “ac tually and exclusively ” used for “cha

ritable or benef

icent purposes, and not lease d or otherwise used with a view to profit.” 35 I L CS 200/15-65 (West 2006). Property satisfies the exclusive-use require ment of the proper

ty tax exemption s t at u t es i f it is used primarily for the exempted purpose. McKenzie v. Johnson
, 98 I ll. 2d 87, 98 (1983). Where proper ty is used for two purposes, one of which is exempt and one of which is not, a tax should be imposed ag ainst the part of the
proper ty that does not qualify

for e x emption. Fairview , 153 I ll. App. 3d at 771.

¶ 14 1. FC’s Relig ious Ex emption Claim ¶ 15 FC co n t en d s t hat the DOR’s conclusion that VL was not used in 2007 primari l y fo r relig ious purposes was clea rly err oneous. FC rea sons that, since FC’s relig ious purpose is to provide car e and housing to seniors, the law require s the conclusion that FC operates VL exclusively for relig ious purposes. FC further contends that constitutionally the DOR cannot deny the relig ious exemption on the g round that VL is operated with a view to profit, beca use

canon law require s the Sist ers to be g ood stewar ds of their proper ty and, following canon law, stewar dship, which dictates a business-like operation, is one of the Sist er s ’ re l i gi ous values. FC additionally argues that the AL J ’s finding that the Sist ers could acc omplish their relig ious p u rp ose throug h other means unconstitutionally infring ed on their fre e-e x erc ise rig ht, beca

use serving and housing the ag ed is their relig ious char ism. In essenc e, FC claims
t hat constitutionally the courts cannot inquire into either FC’s stated relig ious purpose i n operating VL

or its stated use of the proper ty as primar ily

relig ious. ¶ 16 The first amendment to the United States Constit ution (U.S. Const., amend. I ) and article Iof the I llinois Constit ution (I ll. Const. 1970, art. I
, § 3) provide that g overnme nt may not i n h i bit the fre e exercise of relig ion or act to foster any particula r belief. Fairview
, 15 3 I l l

. App. 3d at 772. Consequently
, g overnme ntal bodies are prec luded from resolving disputes based on relig ious doctrine and must respe ct the autonomy of relig ious org anizations. Fairview
, 153 I ll. App. 3d at 772. “In the tax context, the first amendment require s the court to acc ept the entity ’s cha

rac terization of its a ctivities a nd beliefs as relig ious a s long as the char acte rization is i n g ood faith.” Fairview , 153 I ll. App. 3d at 773. Neither a cour t nor an administrative ag ency may g o behind the entity ’s decla red content of its relig ious beliefs or examine the validity of those beliefs. Fairview
, 153 I ll. App. 3d at 773. Her e, FC spent hours and day s provi n g what no one disputed: that the Roman Catholic Church is a relig ious
org anization, that the Sist ers are a relig ious org anization within the Roman Catholic Church, and that the Sist ers’ char ism is to serve the elder ly

. It is simil arly undisputed that the Sist ers

-5-p u rc h ased VL beca use there was no Catholic CCR C in L ake County

. There fore
, i t i s undisputed that VL is a means for the Chu rc h an d t h e S i sters to car ry out the mission of Christ’s healing

. Neither the AL J nor t he DOR either examined or reje cted FC’s char acte rization of the beliefs of the Church or the Sist ers. The AL J found that those beliefs

wer e sincere

. Acc ordi n gl y , t he DOR did not unconstitutionally inquire into the content or validity of F C’s beliefs or stated purpose in ope ratingVL

. 2 ¶ 17 FC maintains that, by inquiring into F C’s actua l operation of VL to determine whether the prope rt y was used exclusively for relig ious purposes, the DOR violated the first amendment, beca

use it questioned canon law and the Arc hbishop of Chicag o’s decr ees with
respe ct to how the proper

ty was used. I t is FC’s position that civil authorities must acc ept not only a relig ious org anization’s char acte rization of its beliefs but also the enti ty ’s char acte rization of its use of the subject proper ty

. Under this theory
, no proper ty taxes could

ever be imposed on any proper ty a relig ious org anization decla red was used exclusively for relig ious purposes, reg ardle ss of the true fac ts. This is contra ry to established law. Courts are permitted t o deter

mine whether

proper ty is in fac t used ex clusively for relig ious purposes. Fairview
, 153 I ll. App. 3d at 773. “A court must *** take into acc ount the fac ts and circ umstances r eg ardinghow the prope rty is actually

used.” Provena II

, 236 I ll. 2d at 409. ¶ 18 We digr ess to discuss the import of Provena II

. The parties dispute its prec edential va lue. Provena II

is a plurality

opinion by

J ustice Ka

rmeier
, Chief J ustice Fitz g era ld, and J ustice Thomas. J ustices Kilbride and Gar man did not participate in the decision. J ustices Bur ke and Fr eema n joined in that part of the plurali t y o p i nion that held that the taxpay er failed to demonstrate that it wa s entitled to a relig ious-use exemption. Provena II
, 236 I ll. 2d at 411 (B urke, J
., concur

ring in pa rt and dissenting in part, joined by Fr eema n, J .). J ustices Bur

ke and Fr eema

n also joined in the plurality opinion’s conclusion that the taxpay er faile d to establish that it was a char itable instit ution. Provena II
, 236 I ll. 2d at 411 (B urke, J
., con curring in part and dissenting in part, joi ned by Fr eema n, J .). However, J ustices Burke and Fr eema

n did not ag ree with the rea soning t h e plurality opinion employ ed to rea ch the conclusion reg arding the char itable exemption. I t is a “hornbook” principle of prac tice and
proce dure that no appellate pronounce ment become s binding on inferior courts unless it has the concur

renc e of a majority of the judge s qualified to decide the case

. State ex rel. Jame s

v. ACLU of

Alabama
, 711 So. 2d 952, 964 (Ala. 1998). Acc ording ly
, the analy sis in that part of Provena I

I perta ining to the r elig ious-use exemption is prec edential, beca use a ma jority joined in both the result and the rea soning. That part of the analy sis in Provena II perta ining
to the char itable exemption is not binding authority
, as J ustice Bur ke noted i n the partial dissent. Provena II

, 236 I ll. 2d at 416-17 (B urke, J
., concur ring in part and dissenting in part, joined by Fr eema

n, J .). Consequently
, we consider, and rely on, only that part of Provena II that discusses the re ligious-use exemption. ¶ 19 We must indulge in another digr ession related to the Provena case s. In its reply brief, F C raises the argument for the first time that the AL J ’s citation of the appellate court’s decision

Lat er in thi s opi nio n, we wil l exp and our dis cus si on of the ALJ ’s fi ndi ng tha t ope ra ti on of 2 V L was not nec ess ar y to ac complis h t he S is te rs ’ r el igiou s pu rpo se.

-6-in Provena Covenant Medic al Center v. Departme nt of Rev enue , 384 I ll. App. 3d 734 (2008) ( Provena I ), is reve rsible err or. This argument is forf eited for two rea sons. First, arguments may not be raised for the first time in reply briefs. Villanueva v. Toyota Motor Sales, U.S.A.
, Inc.
, 373 I ll. App. 3d 800, 802 (2007). FC cannot say that it was responding to the DOR’s brief, which cited Provena I
, beca use the issue of whether it was err or for the AL J to rely on the appella t e court’s decision was alre ady known to FC when it filed its opening brief. Second, FC g ives no rea son and cites no authority to support why it believes that the AL J ’s relianc e on Provena I was reve rsible err or. Fa ilure to arg ue a point results in forf

eiture of the issue. Vancura v. Katris
, 238 I ll. 2d 352, 369 (2010). Both argument and citation to rele vant authority are require d. Vancura , 238 I ll. 2d at 370. ¶ 20 Having clar ified the extent to which Provena II is binding on this court, we note that the taxpay er in Provena II made the identical argument as FC–that the relig ious authorities, rathe r than courts, deter

mine the use of the subject proper ty –which our supreme court reje cted. Provena II

, 236 I ll. 2d at 410 (“I f [P rovena ’s] argument wer e valid, it would mean that the church ra t h er t h an the judiciary is the ultimate arbiter of when and under what circ umstances churc h proper ty is exempt from taxation ***.”). Indeed, for this court to hold that canon law trumps civil law and that the Arc hbishop’s deter mination prec ludes judicial revie w would itself run afoul of the establishment clause of the first amendment. We would be blatantly fosteringparticula r re ligious belief

s. Furthe rmore, e ven if we wer e to assume, arguendo
, that FC’s use of the proper ty was exclusively for relig ious purpose s , we would still have to inquire whether the subject proper ty was “used with a view to profit.” Under the plain languag e of section 15-65 of the Code, in or der to meet its burden that it is entitled to

a relig ious-use exemption, the taxpay er must introduce evidenc e not only that its primary use of the subject proper

ty is relig ious but also that it is not using the proper ty with a view to profit. Three Angels , 381 I ll. App. 3d at 696. ¶ 21 FC challeng es as unconstitutional that portion of the AL J ’s rec ommendation that FC say s restric ts relig ious use to public worship or relig ious instruction. FC relies on Calvary Baptist Church of Tilt on v. Departme nt of Rev enue , 3 4 9 I ll. App. 3d 325 (2004), wher e the court held that, in requiring that the property be used f or public worship or r elig ious instruction, the AL J applied the wrong standard to de termine the pr imary use of the proper ty

. Calvary
, 3 4 9 I ll. App. 3d at 332. Howeve r, we do not rea d the AL J ’s rec ommendation as equati n g “re ligious use” with public worship or relig ious instruction. The AL J cited Provena I
, wher e the court discussed People ex re l. McCullough v. Deutsc he Ge meinde
, 249 I ll. 132 (1911). In McCullou g h
, o u r supreme court stated that “a relig ious purpose means a use of such
proper ty by a relig iou s s ociety or body of persons as a stated place for public worship, Sunday schools and relig ious instruction.” McCullough
, 249 I ll. at 136-37; acc ord Provena I
, 384 I ll. App. 3d at 767. Provena I noted that our supreme court later held that the quoted
passag e from McCullough was not i n cl u s i v e o f ever y thing that might in the future be
reg arde d as a rel i gi o u s u s e but that it was il lustrative of the nature of such use. Provena I
, 384 I ll. App. 3d at 767. Provena I then held that med i ca l car e did not rese mble public worship, Sunday schools, or relig ious instruction. Provena I
, 384 I ll. App. 3d at 767. In citing Pr o ve n a I ’s discussion of McCullough
, the AL J was responding to FC’s argument that “eve ry thing that occur s at [ VL ] is a religious ac t i v i t y .” The AL J conclude d that “re ligious

-7-identity
, relig ious motivation, and relig ious spirit are not sy nony mous w ith, a

nd are leg ally insufficient to e stablish, r elig ious use.” The AL J ’s statement that FC finds constitutionally offe nsive was the following sentenc e: “Similarly
, in the instant case , [FC] has failed to prove that leasing 320 residenc es to financ ially secur e seniors ‘re sembles’ public worship, Sunday school or relig ious instruction.” The AL J was simply using the same illust ration as the court in Provena I

, rathe r than limit ing relig ious use to specific cate g ories. Moreove r, this
argument is only a sl ightly d i ff er ent restate ment of FC’s other constitut ional claim, which

we have reje cted, that it is the relig ious authorities who must deter mine whether the subject
proper ty is used exclusively

for r elig ious purposes. ¶ 22 Next, FC urg es that VL is “an expression of the Church’s healing minist ry and mission” and that taxation “could eventua lly hamper
, or lead to the silencing of, that expression.” FC conclude s that paying pr operty taxes viol ates its rig ht to fre e speec h. FC does not f lesh out its arg ument beyond this and cites inapposite case s’ boilerplate languag e. Consequently
, FC has forf eited this arg

ument, beca

use it is not clea

rly define d and sufficie ntly prese nted. See Bublitz v. W

ilkins Buick, Mazda, Suzuk i, Inc. , 377 I ll. App. 3d 781, 787 (2007). ¶ 23 In contending that VL was in fac t exclusively used for relig ious purposes, FC argues that VL is part of the Church’s mission of diacona l service
, VL direc tly further s and fulfills the 3 healing minist ry of t he C hurch, and VL allows the S isters to fulfill their “unique char ism” of healing and serving the age d an d i n fi rm

. In their briefs, both sides rely on Fairview ; howeve r, at ora l argument, FC attempted to distinguish Fairviewon the fa cts. ¶ 24 In Fairview
, Fa i rv i ew Ha v en wa s a nursing home org anized and supported by four Apostolic Christian Church of Americ a congreg ations. Fairview
, 153 I ll. App. 3d at 766. In support of its arg

ument that it was entitled to a relig ious-use exemption, Fa i rv i ew Ha ven cited the following fac ts: the Apostolic Chr i s t i an Church of Americ a founded Fa irview Have n; there wer e needs in the community to car e for the elder ly in a nonwar ehouse fashion and be a source of Christian atmosphere ; one of the basic tenets of the churc h is that salvation is acc omplished throug h faith and Christian witness; members show their faith by

acc omplishi ng Christian service works; Fa irview Have n exis ted to meet th e g oal of

acc omplishi ng Christian service works; t he mot ivating fac tor behind Fa i rv i ew Have n was to provide an opportunity to help the elder ly and fulfill the tenets of the churc h; and Fa irview Have n was listed as an outrea ch minist ry of the national churc h. Fairview
, 153 I ll. App. 3d
at 768. Testimony further showed that only churc h members could be on Fa irview Have n’s board; all policies, rules, and regulations had to subscribe to the beliefs of t he ch urch, and those beliefs had to be ref

lected in the operation of the nursing home; relig ious service s wer e piped into the residents’ rooms; the background m u s i c consisted of relig ious themes; Fa irview Have n was an integ ral part of the churc h and was g overne d and maintained by the churc h; a nd Fa irview Have n “proc laimed the g ood news,” so it served a relig ious pur pose. Fairview
, 153 I ll. App. 3d at 768. The DOR den i ed t h e exemption and conclude d that

T heo logia n, Fat her Mi cha el Pla ce, te st if ie d tha t the ser vice of “di akonia ” is cha ri ta ble 3 works by whic h the Chur ch see ks to bri ng he a l i n g w h e re the re is “br okennes s of body, m ind
, or spi ri t.”

-8-Fa irview Have n’s use was primarily commerc ial, not relig ious or char itable. Fairview
, 153

I ll

. App. 3d at 769. The evidenc e showed that the residents paid fee s at vary ing rate s and signe d admission contra cts that contained g uara ntee- of-pa

y ment clause s. Fairview
, 153 I ll. Ap p

. 3 d at 766. On administrative revie w, the circ uit court reve rsed the DOR’s deter mination, and, with respe ct to relig io u s use, the circ uit court held that the DOR’s finding that Fa irview Have n was not used exclusively for relig ious purposes violated its first amendment rig hts. Fairview
, 153 I ll. App. 3d at 769. The appellate court reve rsed the circ uit
court on the relig ious-use issue, holding that the DOR’s deter mination that Fa irview Have n’s method of opera

tion was businesslike, and there fore not exclusively for relig ious purposes,

was supported by the evidenc e. Fairview
, 153 I ll. App. 3d at 775. At oral argum ent, FC
argued that the instant case is fac tually dif fe re n t from Fairview beca use, in Fairview
, the
operation of t he nursing

home was not a

function of the c hurch, where as here, VL was the Church. FC’s analy sis is mistaken, beca use the evidenc e in Fairview showed that Fa irview Have n was a

n outrea ch ministry

of the national churc h. ¶ 25 The Fairview court set forth the para meters of constitutional relig ious-use inquiry in tax
matters and held that, f

irst, the court must acc ept the org anization’s c hara cter ization of the
purposes o f its activities, and, second, the court must deter mine whether the property is in fac t used exclusively for relig ious purposes. Fairview
, 153 I ll. App. 3d at 773. Her e, FC 4
argu es t h at, applying Fairview ’s para meters, the evidenc e clea rly showed that the Sist ers “believe their activities are relig ious and use VL p ri m ar ily for those relig ious activities.” Specifica lly
, FC point s t o t he evidenc e that one of the missions of the Roman Catholic C h u rc h i s t o provide healing to those in need, and VL
, as part of the Church, fulfills that mission by providing car e to older adults in need. FC maintains that the provision of shelter and care for the ag ed is a tenet derive d from scripture and i s a form of worship. The DOR and the school district cite Fairview for the proposition that, wher e a nursing home is
operated as a commerc ial conce rn, it is not used exclusively for relig ious purposes. In sum, FC focuse s on the Sist ers’ relig ious beliefs while the DOR and the school district grant the exis tence of those belief

s but focus on the a ctual nuts-and- bolts operation of VL

. ¶ 26 I n F

a i r vi ew , t h e court acknow ledg ed (and it was uncontested) that the operation o f Fa irview Have n “provided an opportunity for members of the Apostolic Christian faith to

car ry out Christian ser v i ce wo rk, car e for the elder ly
, and eng ag e in evang elization.” Fairview
, 153 I ll. App. 3d at 774. The court then stated, “Howe ver, operation of the nursing home was not nece ssary for these relig ious purp o s es , wh ich could also have been

acc omplished throug h other means.” Fairview
, 153 I ll. App. 3d at 774. The court noted that the prac tice of virtues is encoura g ed by all relig ious org anizations, but t he prac tice of such virtues as ch ar i t y and kindness, in particula r toward the ag ed, is not within commonly

acc epted definitions of “re ligious purpos es.” Fairview
, 153 I ll. App. 3d at 774. Her e, the AL J
, citing this languag e from Fairview
, conclude d: “Similarly
, wher eas the exis tence and

FC con si st ent ly acknowl edges the fi rs t pron g of the Fai rvi ew con st it uti ona l ana lysis –th at 4 the cou rt m

ust acc ept the organi zati on’ s cha r a c t e r i za t i on of the pur pos es of it s act ivit ie s–b ut al so

con si st ent ly dis agree s wit h the sec ond pro ng, tha t is, tha t the cou rt det er m ine s wheth er the sub j ect pro per ty is , in fa ct , us ed e xcl usi vely forre li gious purpos es.

-9-operation of VL may provide an o pportunity for relig ious activities, VL
, itself, is not

nece ssary for the fulfillment of the Sist ers’ mission, and [VL ] is not nece ssary for the perf ormanc e of relig ious activities, mandated by the Church in order to attain salvation.” FC
argues that the AL J ’s conclusion was clea rly and constitu t i o n ally err oneous, g iven the Sist ers’ char ism. ¶ 27 In Fairview
, the exis tence of Fa irview Have n provided churc h members the opportunity
to ac complish “Christian service works.” Fairview
, 153 I ll. App. 3d at 768. “Christian service works” is a broad cate g ory , lending meaning to the court’s statement that operating Fa irview Have n was not nece ssary to the fulfillment of the g oal of acc omplishi ng “Christian service works,” as other “wor ks” could tak e its place and still meet the g oal. Her e, Sist er Diane Marie Colli ns, the Sist ers’ g ener al minist er, testified that the char ism is the spirit that impels the p er formanc e of a particula r apostolate. Sist er Diane Marie testified that the char ism of the Sist ers comes from their foundre ss whose mission was to car e for the elder ly

. There fore
, acc ording to Sist er Diane Marie, the Sist ers’ char ism is “to meet the needs of the elder ly men, women[,] and children [ sic ], and to do so to the best of our ability .” Sist er Diane Marie testified that the Sist ers implement their charism throug h their institutions of service such as VL

. Thus, the Sist ers’ char ism is much narr ower than “Christian service works,” as “Christian service works” is g ener ic, while meeting the needs of the elder ly is more specific

. Stil l, meeti n g the needs of the elder ly is broade r than the operation of VL
, as meeting the needs of the elder ly could presumably be acc omplished in any number of way s. This is how

we interpre t the AL J ’s conclusion. At oral argument, FC asser ted that its operation of VL as

a CCR C was nece ssary to meet the Sist ers’ char ism. Howeve r, FC also acknow ledg ed at 5 oral a rgument that the Sisters’ oper ation of CCRC s, as a mea ns of fulfilling the ir 114-y ear char ism, is relatively

new, a s FC beg an oper ating CCR Cs only in the 1980s. ¶ 28 The discussion of how the Sist ers acc omplish their g oals is misleading beca use, whether

we are talking about meeting the go al o f “C hristian service works” or implementing the Sist ers’ char ism, we are talking about the motivation for operating the subject proper ty as a nursing home. “Relig ious purpose is not deter mined solely by the prof es s ed m o tives or beliefs of the proper

ty owner .” Provena II

, 236 I ll. 2d at 409. Courts must look at the “fa cts and circumstance s reg ardinghow the prope rty is actually

used.” Provena II

, 236 I ll. 2d at 6 409. Ag ain, the parties in our case look at how VL is actua lly used throug h differ ent lenses. Sist er D iane Ma

rie testified: “The way in which we witness to the Church is by the service that we g ive and what

At ora l ar gum ent , FC at te m pte d to dis ti nguish Prov ena II on thi s bas is
, not ing tha t the cou rt 5 in Prov ena II poi nte d out tha t the ta xpa yer the re m ade no cl ai m tha t ope ra ti on of a fe e- bas ed m edi cal

cen te r wa s e sse nti al to the pra ct ic e or obser vance of the Cat hol ic fa it h. Se e Prov ena II , 236 I ll . 2d
at 410

.

I t is wel l to keep in m ind tha t the re is a dis ti nct ion bet ween re li gious pur pos e and re li gious 6

use

. T he r e c o r d i s cl ear tha t everythi ng the Sis te rs do wit h re spe ct to V L is done wit h a re li gious
purpos e, i.e

. , m oti vatio n, wher eas the use to whic h the pro per ty is put st re sse s the pra ct ic al it y of the

re sul t.

-10-I mean [by ] that is the service that we g ive to the residents [of VL ]. The service that we g ive to our associate s who other persons would call employ ees. What I mean by service here is the fac t that we–ev er y t h i n g t h at we do, ever

y thing that is done in any of our CCR Cs or any of our other minist ries or apostolates is considere d relig ious service, beca use that is what we ’re require d to do.” Sist er Diane Marie explained that “fr om the way a floor is mopped, toilet is clea ned, resident is fed, families are dealt with, all of those things for us are some of the examples of the way s that we witness to the C hurch.” The DOR and the sc hool district dwell on the commercial
aspec ts of VL

. As the appellate court in Provena I stated, “The issue is not whether [t he hospital] is operated as an ‘apostolic mission and health car e minist ry o f t h e Catholic Church’ but whether it is ‘use d exclusively for *** r elig ious purposes’ a s case law define s that phrase .” Provena I

, 384 I ll. App. 3d at 766. Her e, also, the issue is not the relig ious motivation behind the day -to-day use of the subje ct prope rty , but the day -to-day use itself. ¶ 29 In deter

mining that a day car e cente r run by a relig ious org anization was not exempt, the
court in Faith Builders Church, Inc. v. Departme nt of Rev enue , 378 I ll. App. 3d 1037 (2008), said, “In a sense, ever

y thing a deeply devout person does has a relig ious purpose. But if that formu l ati on deter

mined the exemption from proper ty taxes, relig ious identity would eff ectively be the sole criter ion.” Faith Builders
, 378 I ll. App. 3d at 1046. “Exemption would be the rule, and taxation the exception.” Provena I
, 384 I ll. App. 3d at 766. For purposes of taxation, courts look at whether advanc ing relig ion is identif ied as the subject proper

ty ’s dominant purpose. Provena II
, 236 I ll. 2d at 409. Courts also look at whether the operation is more businesslike and char act eristic of a commerc ial enter prise than a fac ility used primarily for relig ious purposes. Faith Builders , 378 I ll. App. 3d at 1046. Her e, FC had to
prove that the relig ious use of VL was primary and that any secula r use was incidental. See Provena I

, 384 I ll. App. 3d at 767. ¶ 30 Acc ording to VL adver tisements in evidenc e, VL offe rs a “g rac ious atmosphere in which
to en j o y fa m ily and friends. Residents enjoy car efr ee living in a war m and inviting community .” Billing life at VL as a “lifestyle of choice ,” VL advanc ed the “top ten” rea sons to move to g arde n and apar tm en t h o m es : (1) “You can sell that lawn mower and snow shovel!”; (2) “You can turn y our g ree n thumb loose!”; (3) “A fee ling of safe ty and secur ity !”; (4) L ots of activities y ou can enjoy !”; (5) “W o n d er ful dining experience s!”; (6) “You can ride the Villag e bus!”; (7) “You have no home maintenanc e!” ; (8) “It’s an ideal setting! ”; (9) “He althy connec tions!”; and (10) “PEACE OF MI ND!” VL ’s brochur e invited residents in the g arde n homes and apar tments to “choose [t heir] fun”: “It’s all rig ht here for y ou. Taking part in daily planned activities, attending social functions, g oing to t h ea t ri cal, cultural and

rec reational events ***.” VL listed the amenities available to residents: arts and cra fts room; atrium; bank; beauty salon/barbe r shop; computer cente r; country store/ca fé; eleg ant dining
room; g ara g es; g azebo; health and fitness cente r; library ; multipurpose g reat room; private dining ro o m ; s pacious common lobby are as; walking paths; and beautifully landsca ped
g rounds. Amenities for the assisted living residents included a tea kitchen, lo u n g e space s, television connec tions, and a common firepla ce outside the country dining area. The Alzheimer’s unit featured “Sunshine Wings” t o “ac commodate residents in a comforta ble and home-like atmosphere .” The continuing car e cente r was billed as a “plac e that fee ls like

-11-home”; “a place wher e y ou fee l connec ted”; “a place wher e y ou fee l loved”; “a place wher e

y ou can g row spiritually ”; “a place wher e y ou can ag e with choice ”; “a place wher e y ou will experience quality service

. . . ever y day”; “a place wher e y ou are surro u n d ed b y natura l beauty”; and “ a plac e whe re you have a cce ss to superior hea lth care . . . on site.” ¶ 31 Documents in e vidence showed that FSCSC ana ly zed whether FC should purcha se VL in light of marke t and financ ial criter ia. Docume nts in evidence also reve aled that VL was

a g ood acquisition based on “loc at ion/market are a,” but that to achie ve a “bre ak-e ven position,” both “mar

keting eff

orts and monthly rate s will need t o i n crease.” After FC acquir ed VL , it reduce d expenses at VL throug h staff reductions. FC’s documents showed that it closely monitored local marke ts to ensure that competitive rate s wer e being char g ed. Residents signe d contra cts, and VL was a uthorized to terminate re sidency for nonpa

y ment

or bankruptc y

. In 2007, VL gen erated $17.4 milli on in g ross reve nue from fee s paid by residents. ¶ 32 The school district included in its separ ate appendix documents t hat ar e not par t of the

rec ord. Those documents are pag es of a loan agree ment betwee n FC and the I llinois Financ e Authority in which FC ag ree d to “use [VL ] primarily as and for senior living and health car e faciliti es and related activities and only in further ance of the lawful corpor ate purposes o f [FC] .” FC further ag ree d that it would not use VL in a manner that is prohibited by the first amendment. The school district and the DOR contend that these documents contra dict FC’s relig ious-use arguments and they ask us to take judicial n o t i ce o f the documents. “Courts
cannot co nsider evidenc e outside of the rec ord of the administrative appea l.” Lyon v. Departme nt of Children & Family Servic es , 209 I ll. 2d 264, 271 (2004). Consequently
, we will not judic i al l y notice, nor will we consider, the documents in the school district’s appendix. ¶ 33 We turn now to FC’s denial that VL was operated with a view to profit. FC argues that, beca use VL lost money and beca use the Sist ers “believe their mission is important and want to continue it for another 114 y ear s,” VL was not operated wi th a view to profit. The leg islature did not premise the relig ious-use exemption on whether an entity actua lly rea liz es

a profit but on whether the entity uses the proper ty “wi t h a view to profit.” Consequently
, rea liz ing a loss does not establish FC’s lack of intent to make a profit, and the Sist ers’ desire
to continue to serv e t h e el d erly for an extended period of time is irrele vant t o whether VL

was operated with a view to profit. Wit h respe ct to the arg ument that th e S i s t er s use any monies they make from the operation of VL to continue their mission, the fac t that proper ty is used with a view to profit defe ats a relig ious-use exemption reg ard l es s of whether that profit is applied to maintaining the relig ious org anization. Three Angels
, 381 I ll. App. 3d at 697. FC’s relianc e on Inter-Varsity Christ ian Fellowship of the United States of America v. Hoffman
, 62 I ll. App. 3d 798 (1978), is misplaced. In Hoffman
, the relig ious org anization’s sale of publications did not defe at the relig ious-use exemption. Hoffman
, 62 I ll. App. 3d at 803. Hof f ma n is inapposite for two rea sons. First, the court in Hoffman held that the law develope d in case s involving homes for the elder ly was not applicable

. Hoffman
, 62 I ll. App. 3 d at 801. Second, the fac ts in Hoffman are distinguishable. The evidenc e in Hoffman showed that any reve nue in excess of expenditures was the sole res u l t o f d o n ations; the
org anization sold its publications at cost or less; and the org anization provided a substantial

-12-amount of i t s materia ls fre e or below cost to g roups that wer e targ eted for its messag e.

Hoffman
, 62 I ll. App. 3 d at 8 0 3

. Here, VL did not provide any service s for fre e, and the 7 majority of i t s reve nue was derive d from the fee s it char g ed its residents. Even if VL lost
money as a business enter prise, the evidenc e does not suppo rt t h e t h eo ry that the l oss was intentional. Indeed, FC’s argument is that the Sist ers wer e require d by canon law to be g ood
stewar ds and make money so that their mission could continue into the future. ¶ 34 FC’s relianc e on Calvary is also misplaced. The appellate court in Calvary reve rsed the DOR’s deter

mination that the subject proper ty was not exempt, based in part on the fac t that the AL J applied the wrong leg al standard. Calvary
, 349 I ll. App. 3d at 332. The evidenc e in Calvary demonstrated that use of the subject proper ty was l i m i t ed to the relig ious
org anization’s members, their friends, and other churche s, and that s ec u l ar activities wer e only occa sional. Calvary
, 349 I ll. App. 3d at 333. In our case , none of the Sist ers resided at VL
, and VL’s d i re ct or and staff were lay people, not even nece ssarily Catholics. The vicepresident and the direc tor of mission integ ration and pastoral car e wer e both lay persons. The residents were lay

persons of any

faith or no faith. VL offe red its residents many amenities and ac tiviti es that we re unr elated to r elig ion. ¶ 35 T h e ev i d ence supports the conclusion that, except for the chape l, which wa s u s ed exclusively for relig ious purposes, the primary use of VL was for upscale senior housing and

car e with an enhanc ed lifestyle. To be sure, there was a relig ious component, but–as the adver tisements a

n d e nti c e me n

ts f or living at VL make clea

r–adva ncing relig ion was not VL ’s primary purpose. ¶ 36 We understand and appre ciate FC’s ar gu m en t t h at t h e S isters’ primary purpose wa s relig ious, in the sense that their motivation was relig ious, but the issue is not whether VL was

an apostolate of the Sist ers. I t unque stionably was. FC insistently frames the issue in te rms of the Sist ers’ relig ious beliefs and values: “[T] he manifest weig ht of the evidenc e shows that the Sist ers believe their activities at VL are relig ious and that they use VL for those relig ious
purp o s es

. ” No one–not the DOR, the school district, or the AL J–questioned the Sist ers’ beliefs. For that rea son, FC’s relianc e on case s such as University of Great Falls v. National Labor Re lations Board
, 278 F.3d 1335 (D.C. Cir. 2002), and Corporati on of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos
, 483 U.S. 327 (1987) (dea ling with the line be tween relig ious and secular activities), is unavailing . Her e, we are not called upon to decide whether the Sist ers eng ag e in relig ious activities. I t is a g iven that they do, but the evidenc e overwhelmingly showed that the opera tion of VL was businesslike and char acte ristic of a c ommercia l enterpr ise. VL was not giving car e to the elder ly ; it was selling car e to the elder ly
, as well as a cer tain lifestyle for those in i n d ep en d ent living, at competitive mark et ra t es. The DOR’s deter mination that VL was operated with a view to profit was not clea

rly err oneous. Consequently
, even if FC had proved that the use of the subject property was ex clusively for relig ious purposes, it could not avail it s el f in 2007 of

a re ligious-use tax ex emption.

I n 2007, VL had em

pty ac comm oda ti ons yet di d no t h ous e e lde rl y in ne ed who could not 7 af for d t he e ntr anc e f

ees and m ont hly se rvice pac kag es.

-13-¶ 37 2. FC’s Char itable Exempti on Claim

¶ 38 We turn now to FC’s contention that it was entitled to a char itable tax exemption for the
y ear 2007. The finding s and conclusions of an administrative ag ency on questions of fac t are considere d prima facie true and corr ect, an d we may not interfe re with the ag ency ’s discretionar

y authority unless it is exercised in an arbitra ry or capr ici o u s m an n er or the administrative decision is ag ainst the manifest weig ht of the evidenc e. Gumma v. W hite
, 345 I ll. App. 3d 610, 615 (2003). Th e appellate court may not reve rse the ag ency ’s decision simply beca

use it would have ruled differ ently or beca use the oppo s i t e co n cl usion is

rea sonable. Boom Town Saloon, Inc. v. City of Chicago
, 384 I ll. App. 3d 27, 32 (2008). “I f there i s an y ev i d ence in the rec ord that fairly supports the ag ency ’s decision, then the decision is not ag ainst the manifest weig ht and the decision must be aff irmed on appea l.” Boom Town , 384 I ll. App. 3d at 32. ¶ 39 In Methodist Old Peoples Home v. Korzen
, 39 I ll. 2d 149 (1968), our supreme court set forth six criter ia or gu i d el i n es for deter mining whether proper

ty is exclusively used for char itable purp o s e s : ( 1 ) th e c h a r it a b le in s ti tution bestows benef its upon an indefinite number 8 of persons, reduc ing the burdens of g overnme nt; (2) the char itable instit ution has no capital, capital stock or share holders, and ear ns no profits or dividends; (3) the instit ution’s funds are derive d mainly from private and public char ity and ar e h el d i n trust for the purposes expressed i n the charter; (4) charity is dispensed to all who nee d it and apply for it; (5) the instit ution puts no obstacles in the way of those seeking the char itable benef its; and (6) the primary use of the proper

ty is for char itable purposes. Korzen
, 39 I ll. 2d at 156-57; Provena I
, 384 I ll. App. 3d at 742. Her e, the AL J found that FC failed to satisfy all six of the Korzen fac tors. 9 ¶ 40 FC contends that the ALJ err ed by limit ing “cha rity ” to almsg iving or “g iving money

awa y .” FC arg ues that char ity includes relieving suffe ring and attending to persons’ spiritual and phy sical well-be ing. For the Church, FC explains, diakonia (a Gre ek word meaning service or char ity) “is to bring love and reme dy wher ever there is brokenne ss.” I n the
proper ty -tax are na, our supreme court has not so broa d l y d efine d char ity or, more particula rly
, char itable use. The leg islature, which has the power to tax , also has the power to exempt from tax ation. Eden Retirem en t Center, Inc. v. Departme nt of Rev enue , 213 I ll. 2d 273, 285 (2004). The leg islature has deter mined (consistent with the I llinois Constit ution) that the exemption is limit ed to proper ty that is exclusively used for char itable purposes, and

T he cou rt exp la ine d tha t the st at uto ry te rm “ex cl usi vely use d” m ean s the “pr imary purpos e 8 for whic h the pro per ty is use d an d n o t any sec onda ry or inc ide nta l pur pos e.” Korz en , 39 I ll

. 2d at 157.

T he DOR and the sch ool dis tr ic t–e sp eci al ly the DOR–bas e the ir cha ri ta ble

- exe m pti on 9

ar gum ent s la rgely on Prov ena II ’s cha ri table

- use ana lysis
, whic h, a s J u s ti ce Burke not ed in her
par ti al dis sen t, is not bin din g on lowe r cou rt s unde r the doc tr ine of st are dec is is

. Prov ena II
, 236 I ll

. 2d at 416-17 (Bur ke, J
., con cur ri ng in par t and dis sen ti ng in par t, j oin ed by Fre eman, J .). T her ef ore , ourana lysis is pr e-Prov ena II

.
-14-o u r s u p reme court in Korzen articulated the g uidelines for resolving the question o f

char itable use. Eden
, 213 I ll. 2d at 287. The AL J employ ed the g uidelines. Consequently
, the AL J ’s appr oach w as not impermissibly narr ow. ¶ 41 In applying the Korzen fac tors, we are mindful that the fac tors are g uidelines, not strict require ments, that courts consider and balanc e by examining the fac ts of eac h case

. Du Page County B o a r

d o f R e v ie w v

. J

o int Comm’n on Acc reditation of Healthcare Organizations
, 274 I ll. App. 3d 461, 469 (1995). Her e, the AL J analy zed the fac tors in a differ ent order from that outlined in Korzen , so, for c onsistency , we will employ the AL J ’s blueprint.

¶ 42 A. The O rg anization’s Funds Are Der ived Mainly
Fr om Private and Public Charity ¶ 43 The AL J found that FC failed to prove that VL ’s funds wer e derive d mainly from private and public charity and held in trust for the objects and purposes expressed in its char ter. The evidenc e showed that VL deri v ed i t s operating income almost exclusively from residents’ fee s. In 2007, resident reve nue was $15.6 milli on, and total opera ting reve nue was $15.7 milli on. Fur

ther, there was testimony that VL rec eived almost no donations or g ifts in 2007. Ken Wiberg
, the community controller in 2007, testified that donations to VL in 2007 wer e “may be” $1,000. FC maintains that the S i s t er s gave money to VL
, but there was no documentation showingtransfe rs of money from F C to VLin 2007. ¶ 44 In W

yndem ere Re tirement Community v. D epartment of Rev enue , 274 I ll. App. 3d 455 (1995), Wy

ndemer e, a “life- car e co m munity for the elder ly ,” soug ht a char itable-use exemption from reta iler’s occupation taxes and use taxes. W yndem ere , 274 I ll. App. 3d at 456. In aff

irming the Depa

rtment’s denial of the exemption, this court examined the Korzen fac tors. Wit h respe ct to how Wy ndemer e derive d its funds, the evi d ence showed that its initial construction funds wer e provided by a char itable org anization but that the balanc e of its funds for operation wer e provided by “substantial” entra nce and monthly fee s char g ed “to those who can aff

ord to avail themselves of Wy ndemer e’s service s.” W

yndem er e , 2 7 4 I l l. App. 3d at 460. In Alivio Medic al Center v. Departm en t o f R eve nue , 299 I ll. App. 3d 647 (1998), 59% of the medical cente r’s income was derive d from patient fee s, which milit ated
ag ainst its claimed char itable status. Alivio
, 299 I ll. App. 3d at 651-52. Her e, the perc entag e of VL ’s i ncome from residents’ fee s was much highe r, nea rl y 1 0 0 %. T he present case fits within the holdings of W

yndem ere and Alivio
, which followed our supreme court’s prec edent in Small v. Pangle
, 60 I ll. 2d 510 (1975), wher e the court held that an old people’ s home was not entitled to a char itable exemption, in part beca use its “g reatest source of funds [was] not from either private or public charity ” but from monthly resident renta l char g es. Small
, 60 I ll. 2d at 517.

¶ 45 B. The Org anization Has No Capital, Capital Stock or Share holders and D oes Not Provide Ga in ¶ 46 Whil e the AL J acknow ledg ed that FC had no capital stock or share holders, he conclude d that this fac tor weig hed in favor of taxation, beca use FC purcha sed and opera ted VL with a

-15-view to pr ofit, there was no evidenc e that VL ’s highe st-compensated employ ees wer e paid

salarie s commensurate with other nonprof its, and VL

paid s ubstantial manag ement fees to FC. Thus, the AL J conclude d that FC provided g ain o r p ro fi t in a private sense to persons

connec ted with it. See Korzen
, 39 I ll. 2d at 157 (“[A] char itable instit ution is one which *** does not provide g ain o r p ro fit in a private sense to any person connec ted with it.”). FC contends that the AL J ’s conclusion was ag ainst the manifest weight of the evidenc e, arguing that VL actua lly lost money , the money it took in from residents’ fee s was used to maxi miz e FC’s char ity
, testimony that VL ’s salarie s wer e in the rang e of other n o n p ro fi t s was unrebutted, and any manag ement fee s VL might have paid to FC wer e used to fu rther the Sist ers’ char itable mission. The evidenc e supported the AL J ’s finding that FC purcha sed and
operated VL with a view to profit. Documents in evidenc e made it clear t hat marke t consi derations went into the decision to purcha se VL and that, upon purcha se, ra t es we re incre ased in an eff

ort to achie ve a “bre ak-e ven” position. FC there afte r was conce rned about maintaining competitive marke t rate s. That VL did not actua lly turn a profit is not t he criter ion for deter

mining wh ether it is elig ible for a charitable exemption. The leg islature provided that an entity is ineligible for the exemption wher e it is used with a view to profit,
not wher e it make

s a profit. Nor are we persua ded by FC’s argument that it would have used
any g ains to further the Sist ers’ mission. I t is the use to which the proper ty is put, rathe r than the use to which income from the proper ty is put, that is decisiv e. S a l va t ion Army v. Departme nt of Reve nue , 170 I ll. App. 3d 336, 344 (1988). ¶ 47 FC prese nted t es t i m o n y t h at VL d et er mined compensation for its executives and employ ees in 2007 by compar ing salarie s to something called the “Mer cer Study ,” a rese arc h tool for institutions compar able to FC. Although FC’s witnesses testified that ex ec u t i ve salarie s fell within the “Mer cer rang e,” or fell below marke t rate s, FC did not introduce the study itself into evidenc e, leaving the AL J unable to c onclude that VL did not provide g ain

or profit in a private sense to pe rsons connec ted with it. The absenc e of evidenc e reg arding

rea sonable salarie s weig hs in favor of tax at ion. Arts Club of Chicago v. Departme nt of R ev en u e , 334 I ll. App. 3d 235, 246 (2002). FC argues that it prese nted testimony that t h e ALJ was bound to acc ept, beca use it was unrebutted. FC ignor es that the trier of fa ct i s alway s fre e to disbelieve any witness. See Sorenson v. Industrial Comm’n
, 281 I ll. App. 3d 373, 384 (1996). ¶ 48 Wit h respe ct to ma nag ement fee s VL paid to FC, the AL J found that the testimony was confusing and contra dictory and, there fore
, must b e co n s t rued ag ainst FC and in favor of taxation. Sister Diane Marie testified that there wer e no mana g ement fe es, but Wiberg
, the community controller, testified that there wer e “substantial” man agement fee s. The AL J likened any manag ement fee s to those paid by a condominium as s o ci at ion to a proper ty manag er. The DOR conce des that any manag ement fee s t h at VL might have paid to FC would not favor taxation, beca use contra cts with third-par ty vendors are a rea lity of modernday life. We do not think that the issue of manag ement fe es is dispositi ve of whether VL provided private g ain to anyone associate d with it, beca use the evidenc e was overwhelming that VL was opera

ted with a view to profit and was, there fore
, not entitled to a char itable-use exemption. Quad Citi es Open, Inc. v. City of Silvis
, 208 I ll. 2d 498 (2004), upon which FC relies, is inapposite, beca use the issue in Quad Citi es was not exemption but whether an

-16-enabling statute applied to char i t ab l e o rg anizations that operate an athletic event with the

specific purpose of promoting the common g ood and g ener al welfa re. Quad Citi es , 208 I ll. 2d at 507.

¶ 49 C. The B enef its Derived Ar e for

an Indefinite Numbe r of Per sons ¶ 50 The AL J fou n d t h at t he testimony and documentar y evidenc e offe red at the hea ring showed “conc lusively ” that VL char g ed substantial en t ranc e and “up-f ront” fee s for the independe nt living units, assisted car e units, and continuing car e cente r in 2007. This finding

was not ag ainst the manifest we i gh t of the evidenc e. For the independe nt living g arde n homes, VL require d residents to pay a 9 0 % ref undable entra

nce fee
, which rang ed from $244,18 6 t o $ 3 3 2 ,608. Residents in independe nt living apartments paid a 90% ref undable
entra nce fee –rang ing from $127,596 to $252,525–depending on the square footag e. Monthly fee s for assisted living we re f rom $3,881.36 up to $4,741.16, depending on the sty le of the unit, and two months’ fee s wer e d u e in advanc e. The continuing car e center charg ed daily fee s up to $197 plus extra fee s for cer tain service s and amenities. VL did not waive or reduc e the entra nce fee s for any resident in 2007. FC contends that VL bestowed its be nefits upon an i ndefinite number of persons, beca use i t did not restric t admission to Catholics or deny
persons admission based u p o n ra ce or other invidious criter ia. This misses the point. The require ment of a siz eable ent r a n c e f ee cannot be rec onciled with the require ment that benef its be applied to a

n indefinite number of

people. Small , 60 I ll. 2d at 516. ¶ 51 Courts have been consistent in denying exemptions wher e institutions char g e substantial
entra nce fee s. In Eden
, our supreme court held that substantial entra nce fe es and monthly

m ai n t enanc e fee s place d obstacles in the way of those seeking the benef its of Eden’s independe nt living units. Eden
, 213 I l l

. 2 d at 293-94. In People ex rel. Nordlund v. Association of t h e W

i n n eb a g o Home for the Aged
, 40 I ll. 2d 91 (1968), the corpor ation
operating the home cl ai m ed that the proper ty was exclusively used for char itable and benef icent purposes and was, there fore
, exempt from taxation. Nordlund
, 40 I ll. 2d at 92. Our
supreme c ourt disag ree d, saying, “[The home’s] insis tence upon the pay ment of a sizeable admission fee
, the assig nment by a resident of his assets and t h e h ea l t h require ments imposed, constitute [a] *** serious impediment to the tax exempt status it seeks.” Nordlund
, 40 I ll. 2d at 101. In Good Samaritan Home of Quincy v. Departme nt of R ev enue , 130 I ll. App. 3d 1036 (1985), the home was denied an exemption wher e the residents wer e require d
to pay a substantial amount of “pre paid rent.” Good Samaritan
, 130 I ll. App. 3d at 1041. In Plymouth Place, Inc. v. Tully
, 54 I ll. App. 3d 657 (1977), in denying an exemption, the court took into considera

tion, in addition to the entra nce fee s char g ed, that an applicant had to be in good phy sical and me ntal health for his or her ag e and of good m oral chara cter and that residents paid more for larg er suites. Plymouth
, 54 I ll. App. 3d at 658. In denying a char itable exemption, this court has also taken into consider at i o n t he fact t hat charg es vary based on the size of the unit. W

yndem ere , 274 I ll. App. 3d at 460. ¶ 52 Her e, VL require d hefty entra nce fee s and monthly

char g es, which va

ried a ccor ding to the siz e of the home, apar tment, or unit. VL also scre ened independe nt living applicants for phy sical and mental health. L ikewise, the absenc e of a leg al obligation to keep and maintain

-17-any person who become s unable to fulfill his or her financ ial obl i g ation or otherwise

become s sick or unmanag eable is inconsistent with a char itable purpose. Small
, 60 I ll. 2d at 516. VL ’s residenc y ag ree ments for the independe nt living units sta t ed t h at VL could terminate residenc y for cer tain medical conditions or when the resident filed for bankruptc y protec tion or was otherwise u n ab le to meet his or her financ ial obligations to VL

. We conclude
, like the court in Plymouth
, t h at VL’s purpose and function was not primarily char itable, but rathe r was desig ned “to cate r to those persons who [could] pay for the service s rende red.” Plymouth , 54 I ll. App. 3d at 659.

¶ 53 D. Charity I s Dispensed to All Who Need a nd Apply for I t ¶ 54 The AL J analy zed what char ity VL provided in 2007. F C c h a r a cter ized VL ’s “c ontrac tual allowanc es” as char itable. A contractua l allowanc e was the di ffe renc e between what VL ’s char g es were and what pay ments it acc epted. For inst ance , FC cla imed that it ga ve mar ket discounts consisting of acc epting less than marke t rate s for the independe nt living units and that it absorbe d unreimburse d costs of Medica re. Howeve r, the rec ord showed that, in some

case s, residents paid room and board char ges t hat wer e highe r than the marke t rate , and Medica re discounts are not char ity ( Riversi d e Medic al Center v. Departme nt of Rev enue , 342 I ll. App. 3d 603, 610 (2003)). ¶ 55 FC included the “Gift of Care” prog ram in its contra ctual allowanc es. The rec ord showed that FC provided a “Gift of Ca re ” p rogram for new and exis ting residents afte r they exhaust ed al l other resour ces. A “Gift of Care” was subject to the financ ial resour ces available at VL an d could be withdrawn if VL ’s financ ial resour ces beca me depleted. Residents were required to spend down their assets befor e being considere d for a “Gift of Care,” and residents who rec eived a “Gift of Care” could be asked to downsiz e their living

arr ang eme nts

. F in a

n c ia l a s s is ta

n c e r e je c tion letters included languag e stating that the resident would have to leave VL if financ ial assistance funds wer e unavailable

. Docu m en t s i n evidenc e showe d that not ever y one who a

pplied for a

“Gift of Ca

re” in 2007 was ac cepte d into the progra

m. In 2007, the t otal amount of “Gift of C are ” assistanc e for the continui ng

car e an d assi sted living units was $520,294 (contra sted with resident reve nue of $15.6 milli on). Moreove r, those who qualified for a “Gift of Care” wer e re q u i re d to repa y the assistance from the 90% ref undable e ntranc e fe e either upon leavingVL

or upon death. ¶ 56 Under W

yndem ere , the “Gift of Care” prog ram was not char ity
, beca us e, ra t h er t h an dispense the assistance to a ll who neede d it, VL conditioned a “Gift of Care” on VL ’s own financ ial circ umstances, and beca use the numb er of persons rec eiving assistance was minimal. See W

yndem ere , 274 I ll. App. 3d at 460. “Charg ing fee s and rende ring benef its to persons not poverty -s t ri ck en does not destroy the charitable nature of an orga nization, but this is true only to t he extent that the org anization admits persons who need and seek the benef its offe red but are unable to pay .” W yndem ere , 274 I ll. App. 3d at 460. In our case , the evidenc e showed that VL was at 75% capa city in 2007, y et it did not take in anyone who was unable to pay . A g ift is a transfe r of pr operty by one to another

“without any

consideration
or compe nsation theref

or.” In re Estate of Berbec ker
, 277 I ll. App. 201, 205 (1934). He re, VL wa s s el ling car e to those who could aff ord it, and, as in W

yndem ere , VL ’s primar y

-18-purpose was not to provide char ity
, but to “provide a cer tain enhanc ed lifestyle to the elder ly who ca n aff ord to pay for it.” W yndem ere , 274 I ll. App. 3d at 461.

¶ 57 E. The Or g anization Does Not Appea r to Place O bstacles ¶ 58 The AL J conclude d that VL place d obstacles in the way of those who neede d and would have availed themselves of cha rity , beca use VL ’s brochure did not state t he availability of the “Gift of Care” prog ra m , nor did the g ener al public know of the program’s exis tence

. Fur ther, the AL J conclude d that, beca use a “Gift of Care” was d ep en d en t upon VL ’s financ ial resour ces, there was no g uara ntee of its availabilit y , making it speculative. The

rec ord supports the AL J ’s conclusions. Moreove r, the siz eable entra nce fe es and the require ment that residents repa y the “Gift of Care” are obstacles. See Small
, 60 I ll. 2d at 516.

¶ 59 F. The Ex clusive Use of the Property

I s for Char itable Purposes ¶ 60 The term “exclusively used” me ans the primary purpose for which the proper ty is use d

an d n o t any seconda

ry or incidental purpose. Nordlund
, 40 I ll. 2d at 101. In 2007, ev en assuming that the “Gif

t of Care” prog ram was char ity
, VL dispensed such charity to 12
persons. VL d i d n o t ad m it anyone who could not pay the substantial entra nce fee s and monthly assessments. VL ’s contra cts provided for the termination of residenc y in the event of bankruptc y or non pay ment. In sum, the rec ord showed that VL was purcha sed and
operated with a view t o p rofit, and its primary purpose was to house and serve upscale seniors. Applying the Korzen fac tors to the inst an t fac ts, all six fac tors weig h in favor of taxation.

¶ 61 3. FC’s Due Process Ar g ument ¶ 62 FC ’s fi n al co n t en t i o n is that this court should reve rse on the basis that t h e ALJ “evide nced a deep- seate d antag onism ag ainst FC and a predisposition” in favor of the DOR and the school district so that FC’s due proce ss rig hts wer e infring ed. Fundamental principles and require ments of due proce ss g over n ad m i nistrative hearings. W illiams v. Board of Trustees of the Morton Grove Firefighters’ Pension Fund
, 398 I ll. App. 3d 680, 691 (2010). On administrative revie w, the court examines the proce dures employ ed at the administrative hear ing to deter

mine whether they wer e fair and impartial. W illiams
, 398 I ll. App. 3d at 691. Due proce ss is a flexibl e conce pt and require s only s u ch p rocedural protec tions as fundame ntal principles of justice and the particula

r situation demand. W

illiams
, 398 I ll. App. 3d at 691. In an administrative proce eding
, due proce ss does not requ ire a full judicial
proce eding

. W

illiams
, 398 I ll. App. 3d at 691. A fair hear ing befor e an administrative ag ency includes the rig ht to cross-e x amine adver se witnesses and impartial ruling s on the evidenc e. W illiams , 398 I ll. App. 3d at 692. ¶ 63 The DOR claims that FC has forf ei t ed t h is issue by not citing to pag es of the re cord wher e such antag onism and predisposition wer e manifested. FC provided rec ord citations in its stateme nt of fac ts but not in the argument section of its openingbrief. While FC should h a v e in cluded rec ord citations in its argument ( Scoggin v. Roche lle Community Hospital
, 1 7 6

-19-I ll. App. 3d 648, 650 (1988)), w e choose to overlook the violation and a ddress the issue.

¶ 64 FC argues that the AL J cut short its counsel’s opening statement and limit ed much of its planned evidenc e, thus preve nting FC from making an ad eq u ate rec ord. This asser tion is without merit. Wh en co u n s el was 50 minutes into his opening statement and had not y et touched upon the issue to be tried–the use to which VL was put in 2007–the AL J interrupted and g ave counsel 10 minutes more to complete his opening statement. Arguing with the AL J
, counsel stated that he would take 15 minutes. Much of the t es t i m o n y FC prese nted was repe titious and irrele vant. Despite the DOR’s and the school district’s repe ated stipulations 1 0 that the Church and the Sist ers wer e relig ious org anizations, FC pres en t ed ev i dence of Church history and doctrine from its founding

. Counsel quarr eled with the AL J over almost

ever y adver se evidentiar

y ruling or simply ignor ed the AL J ’s ruling s. The AL J had set aside

cer tain day s to acc ommodate the hear ing, y et FC prese nted witnesses for direc t examination who wer e then unavailable for cross-e x amination. The AL J al l o wed FC additional day s 1 1 beyond those he orig inally schedule d, and he allowed FC to make written o ff er s of proof. T h e ALJ had the discretion to control the hear ing in the best manner und er t h e circ umstances. Sudzus v. Departme nt of Employme nt Security
, 393 I ll. App. 3d 814, 825 (2009). In some 8,000 pag es, F C advanc ed its theory that VL was the Church, and counsel have ably argued the theory on appea l. We have not found the rec ord wanting in any respe ct. FC has not shown any prejudice in the proce ed i n g, an d wi thout a showing of prejudice a claimed due proce ss violation will not be sustained. Sudzus
, 393 I ll. App. 3d at 825. Fur ther, the voluminous rec ord does not support FC’s asser tion that the AL J was biased ag ainst Catholicism. According ly
, the administrative proce eding did not deny FC’s due proce ss rig hts.

¶ 65 I I I . CONCL USI ON ¶ 66 For the foreg oing r easons, we aff irm the judg ment of the c ircuit court of L ake County
, which upheld the DOR’s decision to deny FC’s reque st for a proper ty tax exemption, except for the c hapel.

¶ 67 Affir

med.

A his tor y of the Urs uli nes ’ m is si on to New Orl ean s in 1727 and the ir est abl is hm ent of an 1 0 herb garde n was notre le vant, a s on e e xample.

T his was not ent ir el y wit hin cou nse l’ s con tr ol. For ins ta nce , Fat her Pla ce’ s m oth er was il l 1 1 in the hos pit al , an d Fa the r Pl ace was ca ll ed t o he r b eds ide to admini st erla st ri te s.

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