Court Opinion

ID: 6755274
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:26:28.880604+00
Date Added: 2024-06-11T16:02:10.481910
License: Public Domain

Stern, J.,
concurring. I concur in the judgment, even though I have serious misgivings about the majority’s attempt to harmonize past pronouncements of this court with the judgment rendered today. Because of the frequent litigation arising out of the application of R. C. 5709.12, and because of the financial reliance that many institutions place on the tax-exempt classification of their property, I feel it necessary to state my interpretation of the rule of law contained in R. C. 5709.121.2 That statute, in its entirety, reads:
“Real property and tangible personal property belonging to a charitable or educational institution or to the state or a political subdivision, shall be considered as used exclusively for charitable or public purposes by such institution, the state, or political subdivision, if it is either:
“(A) Used by such institution, the state, or political subdivision, or by one or more other such institutions, the state, or political subdivisions under a lease, sublease, or other contractual arrangement:
“ (1) Asa community or area center in which presentations in music, dramatics, the arts, and related fields are made in order to foster public interest and education therein;
“(2) For other charitable, educational, or public purposes;
*203“(B) Otherwise made available under the direction or control of such institution, the state, or political subdivision for use in furtherance of or incidental to its charitable, educational, or public purposes and not with the view to profit. ’ ’
Initially, it is important to observe that, although R. 0. 5709.121 purports to define the words used exclusively for "charitable” or “public” purposes, as those words are used in R. C. 5709.12, the definition is not all-encompassing. R. C. 5709.12 states: “* * * Real and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation.” Thus, any institution, irrespective of its charitable or non-charitable character, may take advantage of a tax exemption if it is making exclusive charitable use of its property. See Wehrle Foundation v. Evatt (1943), 141 Ohio St. 467, 49 N. E. 2d 52. The legislative definition of exclusive charitable use found in R. C. 5709.121, however, applies only to property “belonging to,” i. e., owned by, a charitable or educational institution, or the state or a political subdivision. The net effect of this is that R. C. 5709.121 has no application to noncharitable institutions seeking tax exemption under R. C. 5709.12. Hence, the first inquiry must be directed to the nature of the institution applying for an exemption. Since it appears that The White Cross Hospital Association is a nonprofit charitable and educational institution, it is appropriate to examine the applicability of R. C. 5709.121.
In my view, the overall purpose of R. C. 5709.121 is to declare that the ownership and use of property need not coincide for that property to be tax exempt. If a qualified institution, or governmental unit, owns property, that property is exempt from taxation if (1) the institution or governmental unit itself uses the property as specified in R. C. 5709.121(A)(1) or (A)(2); (2) the institution or governmental unit contractually allows another qualified institution or governmental unit to use the property as specified in R. C. 5709.121(A)(1) or (A)(2); or, (3) the institution or governmental unit makes the property available to any*204one besides another qualified institution or governmental unit, for a nonprofit use that is in furtherance of, or incidental to the owner-institution’s (or owner-governmental unit’s) charitable purposes. Appellant’s property herein must qualify for tax exempt status, if at all, under R. C. 5709.121(B).
Plainly, the use to which appellant’s medical office building is primarily put is to provide office space wherein hospital staff members can conduct their private practices. Equally clear is that the convenient proximity of the office building to the hospital improves and facilitates patient care, and thereby furthers appellant’s primary raison d’etre. Yet, the improved patient care is the immediate result, not of the use to which the medical facility is put but of the physical location of the building. Move the office building down the road two miles and a serious question arises, even under the most liberal statutory construction, as to whether it would then significantly further, or be incidental to the operation of appellant’s hospital.
The tax exempt status of property cannot primarily depend upon its geographical location. Appellant’s medical facility is used to provide office space for the private practice of its staff physicians. This use is not “in furtherance of or incidental to” appellant’s charitable purpose of operating a hospital, and the property cannot, therefore, be tax exempt under R. C. 5709.12.
The majority considers Galvin v. Masonic Toledo Trust (1973), 34 Ohio St. 2d 157, 296 N. E. 2d 542, to be reconcilable with its judgment in the present case. In Galvin, at page 159, this court quoted with approval the following statement by the Board of Tax Appeals:
“ * # * such use [renting an auditorium and hall for private or commercial noncharitable uses] must be considered incidental to the overall purpose behind the acquisition and construction of the property— and it is doubtful if the facility could long continue in operation as a community or area center for the presentation of theatrical events if there was no use for private or commercial purposes * * (Emphasis added.)
*205The purpose behind acquiring and. constructing property is irrelevant to a determination of whether the actual use of that property conforms to the requirements of R. 0. 5709.12. To say otherwise would necessitate a judicial inquiry into intent that is totally out of step with the statutes governing tax exemption.3

 133 Ohio Laws, Pt. III, 2646, effective October 24, 1969.

Parenthetieally, I note that Galvin dealt with the application of R. C. 5709.121. Whether or not it was correct to use that definitional statute when, as the facts showed, appellant Masonic Toledo Trust was not the fee owner of the property involved, but rather was the lessee under a 99-year lease, is of no importance in the instant ease.