Opinion ID: 1726781
Heading Depth: 4
Heading Rank: 1

Heading: Mitchell Aero, Inc. v. City of Milwaukee

Text: ¶ 37 In Mitchell Aero, we held that Mitchell Aero was the beneficial owner of property it leased from Milwaukee County and was thus not tax-exempt. Mitchell Aero, 42 Wis.2d at 665, 168 N.W.2d 183. Mitchell Aero operated a noncommercial aviation business out of General Mitchell Field. [9] It leased part of the airport grounds from Milwaukee County. Id. at 658, 168 N.W.2d 183. The lease extended for 20 years with an option to renew for five years. Id. at 663, 168 N.W.2d 183. ¶ 38 Mitchell Aero paid rent to Milwaukee County for the land and attached buildings it had leased. Id. However, at that time it did not pay rent for two hangars that Mitchell Aero built with permission on leased land, [10] even though, upon completion of construction, legal title to the two hangars vested in Milwaukee County. Id. Furthermore, any alterations to the hangars required prior approval by Milwaukee County and would not be made at Milwaukee County's expense. Id. ¶ 39 Mitchell Aero was responsible for maintaining the hangars, though Milwaukee County remained responsible for the maintenance of all other structures on the land. Id. Mitchell Aero had to acquire fire and extended insurance coverage for one of the hangars to the extent of 80 percent of the insurable value, and it was required to use all insurance proceeds to immediate[ly] repair any damage to the hangar. Id. at 664, 168 N.W.2d 183. The lease provided that if Milwaukee County condemned the land, abandoned the land as an air terminal, or breached the lease, Milwaukee County was required to pay Mitchell Aero an amount equal to Mitchell Aero's unamortized investment in the hangars. Id. If the land was condemned by either the state or federal government, Mitchell Aero's only recourse was against the condemning government. Id. ¶ 40 This court concluded that, under the terms of the lease, some of the rights usually associated with ownership were in Mitchell Aero and others were in Milwaukee County. Id. at 665, 168 N.W.2d 183. However, Milwaukee County's control over the hangars was not indicative of true ownership but concern[ed] the operation of the airport. Id. In other words, the county's control over the hangars concerned its broad oversight of the airport's operation and did not impede Mitchell Aero's ability to use the hangars in its business, to the exclusion of the county, for the lease term. This court concluded that Mitchell Aero's arrangement with Milwaukee County did not pass sufficient incidents of ownership with the paper title to constitute the county the true owner of the hangars within the meaning of `owned' in sec. 70.11(2), Stats. Id. We therefore held Mitchell Aero to be the beneficial owner of the hangars and subject to taxation. Id.