Union Street Realty Trust v. Board of Assessors of the Town of Holbrook (November 3, 2009)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


  
UNION STREET REALTY TRUST   	v.	   BOARD OF ASSESSORS OF 
		   THE TOWN OF HOLBROOK

Docket Nos.: F283385		   		   		 
		   F288853			   Promulgated:
		  					   November 3, 2009


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 appellee to abate taxes on real estate located in the Town of Holbrook, owned by and assessed to the appellant under G.L. c. 59, §§ 11 and 38, for fiscal years 2006 and 2007.  
Commissioner Rose heard these appeals.  Commissioners Scharaffa and Egan joined him in the decision for the appellee. 
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Edmund A. Allcock, Esq. for the appellant.
	
	James F. Sullivan, Esq. for the appellee.





FINDINGS OF FACT AND REPORT

On January 1, 2005 and January 1, 2006, Joseph R. Mullins and Michael Mullins, Trustees, Union Street Realty Trust ("appellant"), was the assessed owner of a 78.6-acre parcel of real estate located at 229 Union Street ("subject property") located in the Town of Holbrook.  For fiscal year 2006, the assessors valued the subject property at $3,500,700 and assessed a tax at the commercial rate of $22.48 per thousand in the total amount of $78,695.74.  In accordance with G.L. c. 59, § 57C, the appellant paid the tax due without incurring interest.  On January 24, 2006, in accordance with G.L. c. 59, § 59, the appellant timely filed an Application for Abatement with the assessors, which the assessors denied on April 5, 2006.  The appellant seasonably filed an appeal with the Appellate Tax Board ("Board") on May 1, 2006.
For fiscal year 2007, the assessors valued the subject property at $7,053,600 and assessed a tax at the commercial rate of $22.88 per thousand in the total amount of $161,386.38.  In accordance with G.L. c. 59, § 57C, the appellant paid the tax due without incurring interest.  On January 30, 2007, in accordance with G.L. c. 59, § 59, the appellant timely filed an Application for Abatement with the assessors, which the assessors denied on April 25, 2007.  The appellant seasonably filed an appeal with the Board on May 24, 2007.  On the basis of these facts, the Board found and ruled that it had jurisdiction over these appeals.
The sole issue raised in these appeals is the proper classification of the subject property.  The appellant maintained that the assessors erred by classifying the subject property as commercial property and applying the commercial tax rate for the fiscal years at issue and argued that the subject property should be classified and taxed as residential property.  The appellant did not challenge the assessed value of the subject property for the fiscal years at issue.  
The appellant purchased the subject property in August of 2002.  At that time, the only improvement on the subject property was a 13,000 square-foot building situated on the northern 8.6 acres of the parcel, which had been used as a bowling alley. The entire parcel was zoned business/commercial. Subsequent to the purchase, the appellant prepared a master development plan which proposed to develop the northern 8.6 acres with a mix of retail and office space, and the remaining 70 acres with a 211-unit residential condominium complex and a four-lot residential subdivision.
In early 2004, the appellant filed a petition with the Planning Board of Holbrook ("Planning Board") to re-classify the northern 8.6 acres as "Business/Village District" and 52.8 acres of the remaining 70 acres as "Residence IV."  At a special town meeting on May 17, 2004, the appellant's petition was approved.  At that time, the appellant also filed a plan with the Planning Board dividing the subject property into two lots, an 8.6-acre lot and a 70-acre lot, in connection with the master development plan.  
In late 2005, the appellant petitioned the Planning Board to rezone the remaining 17.2 acres of the 70-acre lot as "Residence III."  On January 9, 2006, the appellant's petition was allowed and the southern 17.2 acres of the subject property were rezoned Residence III.  
On August 22, 2006, subsequent to the relevant assessment dates for the fiscal years at issue, the Holbrook Planning Board approved a definitive subdivision plan for the subject property, which divided the entire 78.6 acres of the subject property into five lots.  In keeping with the appellant's master development plan, the subdivision plan created a large 74.459-acre lot for the proposed retail and condominium complex, and also four smaller house lots totaling approximately 4 acres.  
Based on the evidence presented, the Board found that for the fiscal years at issue, 52.8 acres of the subject property had been rezoned for residential use and the remaining 25.8 acres continued to be zoned for commercial use.  However, as of the relevant dates of assessment, none of the newly zoned residential acreage had been subdivided into residential lots.  Therefore, for the reasons explained in the following Opinion, the Board found that the assessors properly classified the subject property as commercial property and applied the commercial tax rate.
Accordingly, the Board issued a decision for the appellee in these appeals.

OPINION
General Laws c. 59, § 2A(b) requires the assessors of each city or town to classify all real property according to its particular usage.  See Meachen v. Board of Assessors of the Town of Sudbury, Mass. ATB Findings of Fact and Reports 2001-211, 215-16.  Section 2A(b) provides four distinct usage classifications, two of which are at issue in this appeal:  "Class one, residential" and "Class three, commercial."  The descriptions of these property classifications are as follows:
"Class one, residential", property used or held for human habitation containing one or more dwelling units including rooming houses with facilities designed and used for living, sleeping, cooking and eating on a non-transient basis . . . .  Such property shall include: (i) land that is situated in a residential zone and has been subdivided into residential lots . . . .

. . .
"Class three, commercial", property used or held for use for business purposes and not specifically includible in another class, including but not limited to any commercial, business, retail, trade, service, recreational, agricultural, artistic, sporting, fraternal, governmental, educational, medical or religious enterprises, for non-profit purposes.  Such property may be expressly exempt from taxation under other provisions of this chapter.

(emphasis added).  
The appellant argued that since the acquisition of the subject property, and as evidenced by the appellant's master development plan, 70 acres have been held by the appellant for residential use.  Moreover, the appellant maintained, subsequent to the May 17, 2004 rezoning of the subject property, which rezoned the northern 8.6 acres as business/village and the middle 52.8 acres as residential, the southern 17.2 acres, which were only accessible via the residential land, could not be used for anything other than residential use.  Therefore, the appellant argued, only 8.6 acres of the subject property should be classified and taxed as commercial land and the remaining 70 acres should be classified and taxed as residential land.
The first part of § 2A(b) defines residential property as "property used or held for human habitation containing one or more dwelling units."  G.L. c. 59, § 2A(b).  As of the relevant dates of assessment, the subject property did not "contain[] one or more dwelling units" as required by statute.  Accordingly, the subject property does not meet the requirements of the first part of § 2A(b).  
Section 2A(b) goes on to provide that property may be classified as residential if it is located in a residential zone and is subdivided into residential lots.  First, the southern 17.2 acres were not rezoned as residential until January 9, 2006, after the relevant assessment dates of January 1, 2005 and January 1, 2006.  Further, a definitive subdivision plan for the subject property was not approved until August 22, 2006, well after the relevant assessment dates.  
Accordingly, although the appellant intended to develop a residential condominium complex and a significant portion of the subject property was rezoned residential, no portion of the subject property had been "subdivided into residential lots" as of the relevant dates of assessment as required by G.L. c. 59, § 2A(b).
	The Board therefore found and ruled that the assessors properly classified the subject property as commercial land and assessed taxes for the years at issue at the commercial rate.  Accordingly, the Board issued a decision for the appellee in these appeals.

						THE APPELLATE TAX BOARD

				   By: ________________________________
					   Thomas W. Hammond, Jr, Chairman                  
				
			

A true copy:

Attest: ____________________________
           Clerk of the Board

ATB 2009-1023