Beacon So. Station Assocs. LSE, a/k/a EOP-South Station, LLC v. Board of Assessors of the City of Boston (March 22, 2013)

 COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD

BEACON SO. STATION ASSOCS. LSE,   v.	       BOARD OF ASSESSORS OF 
a/k/a EOP-SOUTH STATION, LLC	    		    THE CITY OF BOSTON
			

Docket Nos.: F301750 & F307421		    Promulgated: 					              March 22, 2013
             				  
       				 							
	These are appeals under the formal procedure, pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65, from the refusal of the Board of Assessors of the City of Boston ("assessors" or "appellee"), to abate real estate taxes assessed on certain real property located in Boston and assessed to Beacon So. Station Associates, LSE, a/k/a EOP-South Station, LLC under G.L. c. 59, § 11 for fiscal years 2009 and 2010 ("fiscal years at issue").  
	Commissioner Scharaffa heard these appeals and was joined by Chairman Hammond and Commissioners Mulhern and Chmielinski in the decisions for the appellant.
	These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Stephen H. Oleskey, Esq., and Seth B. Orkand, Esq. for the appellant.  

	Anthony M. Ambriano, Esq. for the appellee. 


			    FINDINGS OF FACT AND REPORT
Beacon South Station Associates, LP ("Beacon") was a for-profit Delaware limited partnership.  Beacon was acquired by Equity Office Properties and later became known as EOP-South Station, LLC, ("EOP" or "appellant") which is a for-profit limited liability company.  During the fiscal years at issue, EOP leased the property in dispute in these appeals, which is located at 195 Summer Street in Boston and is identified for assessing purposes as Map/Parcel No. 03-0536410-100 ("subject property").  The subject property is owned by the Massachusetts Bay Transportation Authority ("MBTA") and constitutes a portion of the property commonly known as South Station.  The subject property consists of the "Headhouse," which includes an enclosed concourse through which the public may pass to access MBTA and Amtrak train platforms and an underground subway connection; office and retail space; a service facility; a surface parking area; and portions of the surrounding sidewalks.   
Two issues were raised in these appeals: first, whether the subject property was exempt from taxation; and second, if the subject property was not exempt, whether its assessed value exceeded its fair cash value.  By its Order dated March 2, 2010, the Appellate Tax Board ("Board") bifurcated the issues and ordered the parties to proceed on the exemption issue first.  
The hearing of the exemption issue was held on April 26, 2011, and the parties entered into evidence a Statement of Agreed Facts with attached exhibits.  Based on those submissions, the Board made the following findings of fact.

Jurisdictional Facts
For fiscal year 2009, the assessors valued the subject property at $53,116,000, and assessed taxes thereon, at the rate of $27.11 per thousand, in the total amount of $1,439,974.76, which the appellant timely paid without incurring interest.  For fiscal year 2010, the assessors valued the subject property at $38,647,500, and assessed taxes thereon, at the rate of $29.38 per thousand, in the total amount of $1,135,463.55, which the appellant timely paid without incurring interest.  The following table contains additional relevant jurisdictional information:
	
Fiscal  Year	Docket No.	Assessed Value	Tax Bills Mailed	Abatement Application Filed	Abatement Application Denied	Appeal Filed		2009	301750	$53,116,000	12/31/08	01/29/09	03/13/09	06/12/09		2010	307421	$38,647,500	12/31/09	01/29/10	03/19/10	06/14/10		
Based on the foregoing, the Board found and ruled that it had jurisdiction to hear and decide these appeals.


Legislative History of the Taxation of Public and Transportation Properties

In 1928, the Legislature enacted "An Act relative to the taxation of real estate of a municipality used or occupied for other than a public purpose."  1928 Mass. Acts 73, Stat. 1928, ch. 111.  That act added § 3A ("§ 3A") of chapter 59 to the General Laws, which provided that:
Real estate owned or held in trust for the benefit of a city or town, if used or occupied for other than public purposes, shall be taxed to the lessee or lessees thereof, or their assigns, or to the occupant or person in possession thereof, in the same manner and to the same extent as if the said lessee or lessees or their assigns or the occupant or person in possession were the owners thereof in fee[.]  

In 1947, the Legislature enacted Stat. 1947, c. 544, creating the Metropolitan Transit Authority ("MTA"), the predecessor to the MBTA.  As enacted, § 14 of Chapter 544 ("§ 14") provided that the real estate of the MTA, except for the portions used for transportation services, "shall be subject to taxation by the city or town in which it is located in the same manner and to the same extent as if privately owned."  However, according to documents entered into the record by the parties, after just one year of operation, the MTA was facing such a "staggering deficit" that then-Governor Paul Dever asked the Legislature to exempt the MTA from "all taxes, excises, and fees."  The Legislature responded by amending Chapter 544, replacing § 14 with a provision stating that the MTA and "all its real and personal property shall be exempt from taxation and from betterments and special assessments; and the authority shall not be required to pay any tax, excise or assessment to or for the commonwealth or any of its political subdivisions[.]"  In 1964, the MBTA was created to replace the MTA, and this same exemption language was included by the Legislature in § 18 ("§ 18" or "the MBTA exemption statute") of the MBTA's enabling act, 1964 Mass. Acts 450, Stat. 1964, ch. 563.  
In 1973, the Legislature authorized the creation of regional transit authorities to operate in municipalities not served by the MBTA.  See 1973 Mass. Acts 1323, St. 1973, ch. 1141.  The following year, § 3A was modified in several respects.  Among the changes was the inclusion of language excluding from taxation uses "reasonably necessary to the public purpose of a public airport, port facility, highway, turnpike, transportation system, park, or similar property which is available to the use of the general public or to easements, grants, licenses or rights of way of public utility companies[.]"  1974 Mass. Acts 265, Stat. 1974, ch. 383, § 1.  The Legislature subsequently made additional minor modifications to § 3A before repealing it altogether in 1978, and then reenacting it in nearly identical form as G.L. c. 59, § 2B ("§ 2B") in 1979.  See 1978 Mass. Acts 999, Stat. 1978, ch. 580, § 16; 1979 Mass. Acts 874, Stat. 1979, ch. 797, § 11.  As enacted, § 2B provided:
Except as otherwise provided in section three E, real estate owned in fee or otherwise or held in trust for the benefit of the United States, the commonwealth, or a county, city or town, or any instrumentality thereof, if used in connection with a business conducted for profit or leased or occupied for other than public purposes, shall for the privilege of such use, lease or occupancy, be valued, classified, assessed and taxed annually as of January first to the user, lessee or occupant in the same manner and to the same extent as if such user, lessee or occupant were the owner thereof in fee, whether or not there is any agreement by such user, lessee or occupant to pay taxes assessed under this section . . . .

This section shall not apply to a use, lease or occupancy which is reasonably necessary to the public purpose of a public airport, port facility, Massachusetts Turnpike, transit authority or park, which is available to the use of the general public or to easements, grants, licenses or rights of way of public utility companies.  


Lastly, in 1999, the MBTA exemption statute was replaced by G.L. c. 161A, § 24 ("§ 24"), which stated "[n]otwithstanding any general or special law to the contrary, the [MBTA] and all its real and personal property shall be exempt from taxation and from betterments and special assessments[.]" Stat. 1999 c. 127, § 151.  

The History of South Station 
South Station opened to the public on January 1, 1899, combining four passenger rail terminals into one.  According to the Statement of Agreed Facts, the number of rail passengers using South Station declined dramatically after World War II as air and highway travel increased in popularity.  The departure of the New York, New Haven, and Hartford Railroad in 1959 prompted the closure of the station's restaurant, drugstore, and lunch counter.  
In 1965, South Station was sold to the Boston Redevelopment Authority ("BRA") for $6.9 million.  The BRA had been created by the Boston City Council and the Legislature in 1957 as the city's planning and redevelopment agency.  According to various reports issued between 1967 and 1969, which were among the stipulated exhibits entered into the record, the BRA concluded that South Station was "underutilized" and had become "a blighting influence on the neighboring districts and properties."  
In 1970, the Penn Central Transportation Company, which provided service from South Station to New York, declared bankruptcy, thereby contributing to South Station's bleak outlook.  At or around this time, according to the stipulated exhibits, South Station had "only one working elevator and one open staircase."  One of its floors had been closed after a fire, and another floor was completely "abandoned."  It had become a "home to vagrants."  The BRA began the demolition of South Station, planning to replace it with other structures, including a 5,000-car parking garage, a trade center, an office tower, and hotels.
In 1974, the demolition of the South Station Headhouse was halted in the interest of historic preservation by the administration of then-Governor Michael Dukakis.  South Station was listed on the National Register of Historic Places in 1975.   Over the next few years, the BRA, along with other federal, state, and local agencies, re-envisioned South Station's future as a "multi-use complex" and "intermodal transportation facility."  According to the stipulated exhibits, as envisioned, South Station would serve as a "public meeting place for all citizens of Boston" that "people feel good about using," which would in turn enhance the surrounding shopping and financial districts.  Its new uses would include office and retail space, parking, and most importantly, a "grand and spacious concourse" to be used by intra-city and inter-city travelers and commuters, which would be "bustling with activity and filled with light" so as to dispel "the dreary image of transit stations."  

The Lease
In 1979, the BRA conveyed South Station to the MBTA for $4.4 million.  In 1984, the MBTA commenced a $195 million restoration of the Headhouse, the financing of which would be accomplished in part through public-private partnerships.  To that end, on January 28, 1988, the appellant entered into a Lease Agreement ("Lease") with the MBTA to lease the subject property.  The Lease was meant to create a public-private partnership, whereby the appellant would expend a substantial amount of money to renovate and operate the subject property and in turn it would earn money by renting space to various sub-tenants.   The Lease, which was amended in 1988, 1989, and 1998, expires on December 31, 2024, but by its terms, the appellant has the option to exercise two fifteen-year lease extensions.  
The renovation of the subject property entailed interior improvements and the creation of retail and express food kiosks, as well as office space.  The Lease specified that the appellant would have title to any and all tenant improvements - including fixtures, furniture, equipment, appurtenances, and other improvements - installed at South Station, but that any tenant improvements not removed at the end of the lease term would become the property of the MBTA.  The renovation was completed in 1989, and the appellant then sublet the office and retail space to multiple tenants.  The parties stipulated that during the periods relevant to these appeals, all of the appellant's tenants were for-profit businesses, with the exception of Amtrak and the Commonwealth of Massachusetts.  
With respect to operating expenses, the Lease divided South Station into three categories: private space, building space, and railroad-related space.  Under the Lease, the appellant pays 100% of the operating expenses associated with the private space and 50% of the operating expenses associated with the building space, while the MBTA pays 50% of the operating expenses associated with the building space and a portion of the operating expenses associated with the railroad-related space.  Capital expenditures are likewise allocated according to these categories, as follows: 
	          Private	     Building	   Railroad
Appellant        100%	       62.5%           25%
MBTA              0%           37.5%           75%
Under the terms of the Lease as in effect during the fiscal years at issue, the appellant paid the MBTA the greater of: (a) a minimum guaranteed rent of $330,000 per year; or (b) 50% of the difference between Net Available Income and the annual capital improvement contribution.  The Lease included a formula for the calculation of Net Available Income, and according to that formula, real estate taxes were deducted from Net Available Income in calculating the potential annual rent payment to the MBTA.  From 2007 through 2009, the appellant paid the minimum annual rent payment of $330,000 to the MBTA, less any additional required capital reserve distributions.  As part of the Statement of Agreed Facts, the parties stipulated to the rent payments that would have been made to the MBTA had the subject property not been taxed for each of those years.  Those amounts are set forth below, along with the actual rent amounts paid in each year.
	          	   2007   	       2008    	      2009           

Actual Rent  	     $295,907.83      $318,558.85      $330,000.00     
Paid to MBTA      

Rent That Would Have   $598,469.83      $746,355.85      $791,936.71     
Been Paid to MBTA if
No Real Estate Taxes
Were Assessed	    


Based on these facts, the Board found that in 2007, 2008, and 2009, under the formula set forth in the Lease, the appellant paid significantly less actual rent to the MBTA than it would have if taxes had not been assessed upon the subject property.  As of the time of the hearing of these appeals, the rent payment for 2010 had not yet been made, and the actual rent amount was not available.  
Although the Lease included a specific provision requiring the appellant to use its best efforts to negotiate a Payment-in-Lieu-of-Taxes agreement ("PILOT agreement") with the City of Boston for the portions of the subject property leased for office use, no such agreement had been reached as of the time of the hearing of these appeals.  On the contrary, the assessors have assessed taxes on the subject property continuously since 1990.  However, the appellant was reimbursed in part for the real estate taxes which it paid by its sub-tenants, who, pursuant to their sublease agreements,  paid to the appellant a pro rata share of the real estate taxes based on the amount of square feet leased.  The parties stipulated that, for the fiscal years at issue, the appellant was reimbursed by its sub-tenants as follows:
			   Fiscal Year 2009 

Total Real Estate Taxes	$1,439,974.76	
Reimbursement from Retail/Food tenants:	   $79,356.68	
Reimbursement from Office Tenants:	   $66,184.32	
Total Real Estate Tax Reimbursement: 	  $145,541.00	

   Fiscal Year 2010
			
Total Real Estate Taxes	$1,135,463.55	
Reimbursement from Retail/Food tenants:	  $150,916.72             	
Reimbursement from Office Tenants:	   $44,122.28	
Total Real Estate Tax Reimbursement: 	  $195,039.00	


South Station Today and the Taxation of MBTA Property at Present

With the interior renovations completed, South Station has been ushered into the future that was envisioned for it.  Far from "abandoned" and "underutilized," by the time of the hearing of these appeals, South Station had become the busiest commuter rail station in the MBTA system, receiving nearly 100,000 commuters on each weekday.  In recent years, the MBTA expanded rail service to and from South Station, by extending existing lines like the Framingham, Old Colony, and Attleboro lines into more remote communities, and by adding the Greenbush line to Scituate in 2007.  At the time of the hearing of these appeals, the MBTA had plans to add South Coast commuter service from South Station to cities like Fall River and New Bedford.  
Similarly, South Station is the MBTA's busiest subway station, with nearly 22,000 riders embarking on the Red Line and 5,400 riders embarking on the Silver Line at South Station on the average weekday.  Furthermore, the 27 bus bays at South Station's bus terminal provide busing service throughout New England and beyond, through such companies as Peter Pan Bus Lines, Fung Wah Bus, and Greyhound Lines.  In addition, prior to and during the fiscal years at issue, South Station was a major hub for Amtrak interstate rail service. More than 1,367,000 passengers used Amtrak service to or from South Station in 2008 and more than 1,264,000 passengers used Amtrak service to or from South Station in 2009.  
Despite the expansion of commuter rail services from South Station and robust ridership, the indebtedness of the MBTA today is no less "staggering" than it was in 1947.  Among the stipulated exhibits was a 2009 independent report, created at the request of Governor Deval Patrick, which described the MBTA's financial outlook as "bleak," and concluded that a private sector firm faced with the same outlook "would likely fold or seek bankruptcy."  
Notwithstanding the assessors' position in the present appeals, the evidence entered into the record showed that, during the fiscal years at issue, the subject property was one of just three MBTA-owned train, subway, or bus stations in Boston upon which the assessors assessed taxes.  The evidence showed that the assessors did not assess taxes upon property located at the Ruggles MBTA Station in Roxbury which was leased for business purposes, or upon property located at the Back Bay MBTA station which was leased for business purposes, or upon property located at South Station's bus terminal which was leased for business purposes.  The stipulated exhibits further showed that in 2009 and 2011, the Mayor of Boston asked the Legislature to repeal § 24 to allow the taxation of the MBTA's real property when it is "leased, used, or occupied in connection with a business conducted for profit."  The Legislature, to date, has declined those requests. 
   
The Board's Conclusions on the Taxability of the Subject Property

On the basis of the Statement of Agreed Facts and attached exhibits, and the plain wording of the operative statute, the Board found and ruled that the subject property was exempt from taxation during the fiscal years at issue.  The Board ruled that § 24 expressly exempted the property of the MBTA from taxation, whether or not leased for business purposes.  Because the Board ruled that the subject property was exempt from taxation, it did not reach the issue of valuation.  Accordingly, the Board issued decisions for the appellant in these appeals and granted a full abatement of $1,439,974.76 in tax for fiscal year 2009 and a full abatement of $1,135,463.55 in tax for fiscal year 2010.  

				   OPINION 
All property, real and personal, situated within the Commonwealth is subject to local tax unless expressly exempted.  G.L. c. 59, § 2.  Exemptions from taxation are a privilege, and statutes granting such exemptions are strictly and narrowly construed.  See e.g. Milton v. Ladd, 348 Mass. 762, 765 (1965); see also Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712, 717 (1944) ("Exemption from taxation is a matter of special favor or grace.").  Any doubt must operate against the one claiming tax exemption, because the burden of proof is upon the one claiming an exemption from taxation to show clearly and unequivocally that he comes within the terms of the exemption.  Boston Symphony Orchestra v. Assessors of Boston, 294 Mass. 248, 257 (1936).  Thus, in the present appeals, the burden of proof was on the appellant to establish that the subject property was exempt from taxation.  The Board found and ruled that the appellant met that burden.  
It is well settled that "[s]tatutes specifying the tax treatment of particular property supersede more general tax statutes."  AMB Fund III v. Assessors of Boston, Mass. ATB Findings of Fact and Reports 2011-969, 982, aff'd, Mass. App. Ct. No. 11-P-2141, Memorandum and Order under Rule 1:28 (November 27, 2012) (citing Cabot v. Assessors of Boston, 335 Mass. 53, 63-65 (1956)).  Here, § 2B was the more general statute, as it applies to "real estate owned in fee or otherwise or held in trust for the benefit of the United States, the commonwealth, or a county, city or town, or any instrumentality thereof," and subjects such property to tax "if used in connection with a business conducted for profit or leased or occupied for other than public purposes."  G.L. c. 59, § 2B.  In contrast, § 24 is the more specific statute, as it applies only to property owned by the MBTA.  

By its plain terms, § 24 exempts property of the MBTA "from taxation and from betterments and special assessments," without regard to whether or for what purposes that property is leased.  G.L. c. 161A, § 24; see White v. Boston, 428 Mass. 250, 253 (1998) (holding that courts are constrained to follow the plain language of a statute).  It was undisputed in these appeals that the subject property was owned by the MBTA.  Therefore, based on the plain language of § 24, and applying established principles of statutory construction, the Board found and ruled that the subject property was exempt from taxation. Compare AMB Fund III, Mass. ATB Findings of Fact and Reports at 2011-982-83 (finding that property owned by the Massachusetts Port Authority, or Massport, and leased for business purposes was subject to taxation because Massport's enabling statute expressly subjected lessees of such property to taxation).  
The assessors' arguments to the contrary ignored established principles of statutory construction and the plain language of § 24, and therefore, their arguments failed.  Specifically, the Board rejected the assessors' arguments that § 2B governed the taxation of the subject property.  For decades, the taxation of MBTA property has been addressed in statutory schemes separate and distinct from the general taxation statutes. It is logical to infer that, if the Legislature wished to address the taxation of MBTA property leased for business purposes, it would have done so within the confines of § 24, and not in a wholly separate statute.  See The Gillette Company. v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2007-1064, 1090, aff'd, 454 Mass. 72 (2009) ("[I]f the Legislature . . . wanted to be so clear on this point, it follows that it would have included language to that effect within [the statute at issue] itself, rather than indicating its intent by implication in two other sections addressing entirely different credits."). Moreover, § 24 explicitly states that the property of the MBTA shall be exempt "notwithstanding any general or special law to the contrary[.]"   The Legislature was presumably aware of § 2B, enacted in 1979, when it enacted § 24 in 1999. Had the Legislature intended for § 2B to control the taxation of the MBTA's property, it is doubtful that the Legislature would have included such language in the preamble to § 24. See Selectmen of Topsfield v. State Racing Comm'n, 324 Mass. 309, 313 (1949) ("The Legislature must be assumed to know the preexisting law [.]"); see also The Gillette Company v. Commissioner of Revenue, 425 Mass. 670, 677 (1997).  
Furthermore, this precise issue has been addressed by the Supreme Judicial Court in Assessors of Newton v. Pickwick, LTD., Inc., 351 Mass. 621 (1967) ("Pickwick"), a case in which the Court considered §§ 14 and 3A, the statutory predecessors to §§ 24 and 2B, respectively.  In that case, the MTA - predecessor to the MBTA - leased real property located at the Newton Centre MTA station to a clothing company, which used the space to operate a clothing store.  Pickwick, 351 Mass. at 622.  The Newton assessors assessed taxes upon the property because it was being leased for business purposes.  Id.  
In ruling that the space leased to the clothing company was exempt, the Court held that the presence of the more specific statute exempting the property of the MTA from taxation, which did not carve out an exception to that exemption for property leased for business purposes, "render[ed] G.L. c. 59, § 3A inapplicable[.]"  Pickwick, 351 Mass. at 625-26, n.7.  The Court further noted that the Legislature's intent in enacting the exemption statute was to alleviate the "crushing financial burden" facing the MTA, while avoiding fare increases or similar measures.  Pickwick, 351 Mass. at 624-26.   The Court reasoned that, "by necessary implication," lessees of MTA property must also enjoy the exemption to prevent the possibility of reduced rental payments to the MTA, which would negate the Legislature's objective in enacting the exemption.  Pickwick, 351 Mass. at 624. 
The assessors' attempts to distinguish the present appeals from Pickwick were not persuasive.  The alleged distinctions included the fact that § 3A, now § 2B, was amended following Pickwick, and language was inserted into § 3A to allay the concerns of the Court in Pickwick.  Pickwick, 351 Mass. at 624-25.  Although § 3A may have been amended following Pickwick, it was not the controlling statute in that case and its successor, § 2B, is not the controlling statute in these appeals.  Rather, § 24 governs the result in these appeals and under that statute, the subject property was exempt from taxation.  
Further, notwithstanding the amendments to § 3A, the stipulated facts in these appeals showed that the primary concern of the court in Pickwick - the specter of decreased revenue to an already-ailing transportation agency - remains an issue at present.  As stipulated by the parties, and as found by the Board, the assessment of taxes upon the subject property did in fact diminish the rent payments made by the appellant to the MBTA in 2007, 2008, and 2009.  While the rent figures for 2010 were not available as of the time of the hearing of these appeals, under the formula contained in the Lease, any taxes assessed upon the subject property had the potential to reduce rent payments made by the appellant to the MBTA.  For this reason, the Board found unpersuasive the assessors' attempts to distinguish these appeals from Pickwick on the grounds that here, the appellant was the assessed party and the party responsible for the payment of the taxes, while in one of the years at issue in Pickwick, the taxes were directly assessed to the MTA, the party responsible for the payment of the taxes.  Pickwick, 351 Mass. at 622.  The Court in Pickwick was concerned not with the identity of the assessed party, but by the prospect of a decrease in revenue to the MTA resulting from the assessment of taxes on property which it leased for business purposes.  Pickwick, 351 Mass. at 624-26.  Accordingly, the Board in this case rejected the assessors' attempts to distinguish the present appeals from Pickwick and subsequent cases that have followed the Court's reasoning in Pickwick. See Martha's Vineyard Land Bank Comm'n v. Assessors of West Tisbury, 62 Mass. App. Ct. 25 (2004) (reversing the Board's denial of an abatement to a quasi-public entity whose enabling legislation provided that its property was exempt from taxation); Nantucket Islands Land Bank Comm'n v. Assessors of Nantucket, Mass. ATB Findings of Fact and Reports 2002-659, 674 (finding that a specific statute exempting the property of a quasi-public entity trumped more general taxing statutes).   Under the precedent established by Pickwick and its progeny, the Board found and ruled that the subject property was exempt from taxation.  
Lastly, the assessors attempted to assign significance to the fact that the terms of the Lease specifically called for the appellant to use its best efforts to negotiate a PILOT agreement with the City of Boston for the portions of the subject property leased for office use.  The assessors pointed to this fact as evidence that both the MBTA and the appellant understood at least those portions of the subject property to be subject to taxation in the absence of a PILOT agreement.  The assessors also pointed out that, despite this requirement in the Lease, the appellant did not attempt to negotiate a PILOT agreement with the City of Boston until 2009, and no such agreement had been entered into as of the time of the hearing of these appeals.  
The Board was not persuaded by this argument.  The presence or absence of a PILOT agreement relating to certain property is not determinative of whether such property is subject to or exempt from taxation, nor is a party's understanding of whether such property is subject to or exempt from taxation.  See AMB Fund III, Mass. ATB Findings of Fact and Reports at 2011-991 (finding that property at issue was subject to taxation notwithstanding the fact that the taxpayer made payments under a PILOT agreement relating to the property).  Id.  Rather, the taxability of any property is determined by reference to the relevant statutes and case law, which, in this case, dictated that the subject property was exempt from taxation.  See G.L. c. 161A, § 24; Pickwick, 351 Mass. at 624-26.  The Board therefore placed little weight on the Lease provision relating to the PILOT agreement, as this evidence was no more probative of the taxability of the subject property than was the assessors' failure to assess all but three MBTA-owned properties in Boston that were leased for business purposes during the fiscal years at issue.  

			 	CONCLUSION 
The Board ruled that § 24 expressly exempted property of the MBTA from taxation, whether or not that property is leased for business purposes.  Accordingly, the Board found and ruled that the subject property was exempt from taxation during the fiscal years at issue.  The Board therefore issued decisions for the appellant in these appeals, and granted a full abatement of $1,439,974.76 in tax for fiscal year 2009 and a full abatement of $1,135,463.55 in tax for fiscal year 2010.  

					  THE APPELLATE TAX BOARD


				    By: ___________________________________
				        Thomas W. Hammond, Jr., Chairman

A true copy,


Attest: ____________________________
	   Clerk of the Board

 Beacon was originally the appellant in Docket No. F301750, but the petition was later amended to replace Beacon with EOP so that EOP was the named appellant in both appeals, which were consolidated for hearing.  
 The provision in the Lease relating to the PILOT agreement stated that the parties to the Lease "contemplate that the City of Boston will be willing to enter into an In-Lieu Agreement, on the basis that the portions of the Building to be leased for retail use are ancillary to transportation services located at the Building and thus are part of the transportation uses being made of the Building by the public at large." 
 The Board notes that the Legislature has inserted language carving out exceptions for business lessees in numerous other taxing statutes, and if it wished to include such an exception in § 24, it knew precisely how to do so.  See G.L. c. 91 App., § 1-17; G.L. c. 59, § 2B; G.L. c. 59, § 5, Second; see also Commissioner of Revenue v. Cargill, Inc., 429 Mass. 79, 82 (1999) ("Had the Legislature intended to [create] limit[s]  . . . in the manner advocated by the [government], it easily could have done so.").  The Legislature inserted no such language into § 24, and the Board ruled that the Legislature's silence on this matter indicated its intent to exempt all property of the MBTA, whether or not leased for business purposes.  
 As discussed in the Facts above, the stipulated exhibits included a recent independent report showing that the financial burden of the MBTA is no less "staggering" than was the MTA's in 1947.  That same report described the MBTA's financial outlook as "bleak," and concluded that a private sector firm faced with a similar outlook "would likely fold or seek bankruptcy."  

ATB 2013-209