Forges Farm, Inc. v. Board of Assessors of the Town of Plymouth (October 18, 2007)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD

FORGES FARM, INC.			v.	  BOARD OF ASSESSORS OF
							  THE TOWN OF PLYMOUTH
Docket Nos.: F283127                 
             F283128
		   F283129			  Promulgated:
							  October 18, 2007
				 
These are related appeals filed 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 grant exemptions and abate taxes on certain real estate in the Town of Plymouth, assessed to the appellant under G.L. c. 59, §§ 11 and 38 for fiscal year 2006.
Commissioner Egan heard these appeals and was joined by Chairman Hammond and Commissioners Scharaffa, Rose, and Mulhern in the decisions 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. 
 
Lothrop Withington III, Esq., for the appellant. 
Catherine M. Salmon, Assessor, for the appellee.  
FINDINGS OF FACT AND REPORT
On the basis of the exhibits and testimony offered into evidence at the hearing of these appeals, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2005, the relevant assessment date for fiscal year 2006, Forges Farm, Inc. ("Forges") was the assessed owner of a parcel of real estate consisting of three contiguous lots -- two located off Russell Mills Road, and one located off Jordan Road -- in the Town of Plymouth, Massachusetts (collectively, the "subject property").  The Board of Assessors of the Town of Plymouth ("assessors") valued the subject property at $128,600 for fiscal year 2006, and assessed a tax at the rate of $9.88 per thousand, in the amount of $1,289.63, which Forges timely paid.  
Forges filed its Form 3 ABC for fiscal year 2006 on February 28, 2005.  On January 18, 2006, Forges timely filed applications for abatement with the assessors.  The assessors denied the applications on March 14, 2006, and on April 10, 2006, Forges seasonably filed its Petitions with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction over the subject appeals.
The three contiguous lots that comprise the subject property have a total area of 11.219 acres, and frontage on Hayden Pond.  There is no direct access to the subject property by road, since it is surrounded on all sides by lots belonging to other landowners.  The subject property is primarily held in its natural state.
Forges was formed in 2001 as a Massachusetts Chapter 180 non-profit corporation, and has been granted 501(c)(3) status by the Internal Revenue Service.  According to its Articles of Organization, Forges was created to:
participate in scientific research and educational activities related to conservation and the environment in and around the Town of Plymouth, Plymouth County, Massachusetts; to build commitment, involvement and financial support for the scientific research, conservation programs and educational activities of the Corporation, to act as a coordinating organization for agencies active in the fields of scientific research, conservation, and environmental protection and education, to acquire by purchase, gift, lease, restriction, easement, exchange, or otherwise such real or personal property, both tangible and intangible, of every kind, and to use such property in any manner deemed by the Corporation to be consistent with such purposes: to hold, operate, manage, develop, construct, mortgage, lease, sell, assign or otherwise acquire or dispose of such property; and to engage in such other activities as may be incidental thereto[.] 

On July 9, 2003, Forges purchased lots A and C from William S. Brewster, and on October 16, 2003, Forges purchased lot B from Ralph Oehme.   
Forges argued that the subject property should be exempt from taxation under G.L. c. 59, § 5, Third.  Forges claimed that the land is held for conservation purposes; specifically, Forges alleged that it is holding the parcels to reduce use pressure on the Eel River watershed, which Forges believes is threatened by a nearby sewer treatment plant.  In support of its claims, Forges offered: a copy of its Articles of Organization; copies of its Petitions; a copy of the Board's Findings of Fact and Report in Nature Preserve, Inc. v. Assessors of the Town of Pembroke, Mass. ATB Findings of Fact and Reports 2000-796; and two maps of the subject property.
The assessors argued that the subject property was not exempt under G.L. c. 59, § 5, Third, because the use of the subject property did not benefit a large or indefinite class of beneficiaries, but benefited Forges and other surrounding landowners.  In support of the subject assessments, the appellee offered into evidence: the Forges's Articles of Organization; correspondence between the assessors and Forges regarding its exemption claim; correspondence between the assessors and the Department of Revenue's Division of Local Services regarding the Forges's exemption claim; a document labeled "PRECEDENT" listing four prior cases where exempt status was denied to various conservation organizations; several maps showing the subject property; an owners list for all property in the Town of Plymouth; a series of photographs showing that there is no public access to the subject property; the necessary jurisdictional documents; property record cards; and Forges's applications for statutory exemption, both past and present.
The Board found that, by Forges' own admission in its March 14, 2005, correspondence with the assessors, the subject property was not accessible to the public.  Rather, as the correspondence states, "[members of the public] would have to contact the officers of Forges Farm, Inc. in order to gain access."  Although Forges claimed that it would allow access to those who contacted its officers, the land is not marked with any sort of sign indicating that access can be attained in this manner, and Forges has not made any other attempt to inform the public that the subject property is accessible.  Further, Forges offered no evidence that it had ever been engaged in the charitable purposes listed in its Articles of Organization -- "scientific research and educational activities related to conservation and the environment" -- on the subject property.  Forges offered no educational programs or classes, maintained no trails, engaged in no research, and generally provided no public service of any kind on the subject property.
On this basis, to the extent it is a finding of fact, the Board found that Forges was not a charitable organization for purposes of G.L. c. 59, § 5, Third and did not occupy the subject property for its stated charitable purposes.  Accordingly, the Board issued decisions for the appellee in these appeals.       

OPINION
"All property, real and personal, situated within the commonwealth, . . . unless expressly exempt, shall be subject to taxation."  G.L. c. 59, § 2.  Section 5 of Chapter 59 specifies classes of property that "shall be exempt from taxation."  The clause relevant to these appeals, § 5, Third, exempts from taxation all "real estate owned by or held in trust for a charitable organization and occupied by it or its officers for the purposes for which it is organized[.]" 
	"An exemption from taxation is recognized 'only where the property falls clearly and unmistakably within the express words of a legislative command,' and it is the taxpayer who bears the burden of proof on the claim of exemption."  Lasell Village, Inc. v. Assessors of Newton, 67 Mass. App. Ct. 414, 419 (2006)(quoting Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712, 716 (1944)).  "Any doubt in the application of an exemption statute operates against the party claiming tax exemption."  Mount Auburn Hospital v. Assessors of Watertown, 55 Mass. App. Ct. 611, 616 (2002)(citing Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248, 257 (1936)). 
For purposes of the exemption under G.L. c. 59, § 5, Third, a "charity" has been traditionally defined as:
a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government.  

Jackson v. Phillips, 96 Mass. (14 Allen) 539, 556 (1867).  Accord Western Massachusetts Lifecare Corp. v. Assessors of Springfield, 434 Mass. 96, 102 (2001); Brady v. Ceaty, 349 Mass. 180, 181-82 (1965); Massachusetts Medical Society v. Assessors of Boston, 340 Mass. 327, 331 (1960); Boston Chamber of Commerce, 315 Mass. at 716; Boston Symphony Orchestra v. Assessors of Boston, 294 Mass. at 254-55.  While Massachusetts courts have recognized "the manifold new forms in which charity may find expression," it has also been long held that "the more remote the objects and methods become from the traditionally recognized objects and methods the more care must be taken to preserve sound principles and to avoid unwarranted exemptions from the burdens of government."  Boston Chamber of Commerce, 315 Mass. at 718. 
The fact that Forges was formed as a Massachusetts Chapter 180 non-profit corporation, and has been granted 501(c)(3) status by the Internal Revenue Service, is not dispositive.  An organization claiming an exemption under clause Third cannot succeed simply by proving that it was "organized as a charitable organization[,] [but] [r]ather . . . 'must prove that it is in fact so conducted that in actual operation it is a public charity.'"  Western Massachusetts Lifecare, 434 Mass. at 102 (quoting Jacob's Pillow Dance Festival, Inc. v. Assessors of Becket, 320 Mass. 311, 313 (1946)).  
Although Forges' Articles of Organization lists purposes appropriately classified as charitable, namely to provide educational programs and conduct scientific research in the area of conservation, Forges failed to prove that it ever engaged in these activities, much less on the subject property.  Forges provided no classes or seminars, printed no pamphlets of other educational materials, and conducted no scientific research.  Rather, Forge's true purpose, as stated in its correspondence to the assessors dated March 14, 2006, was to hold the property as vacant, natural land.  This fact alone bars exemption since a public charity is "'not entitled to tax exemption if the property is occupied by it for a purpose other than that for which it is organized.'" Lynn Hospital v. Board of Assessors of Lynn, 383 Mass. 14, 18 (1981) (quoting Milton Hospital & Convalescent Home v. Assessors of Milton, 360 Mass. 63, 69 (1971)).
	Further, the dominant purpose of an organization claiming a charitable exemption must be for the public good, "and the work done for its members [must be] but the means adopted for this purpose."  Massachusetts Medical Society, 340 Mass. at 332.  This requirement remains the case even where "[t]here can be no doubt that the work of the [organization] is most laudable" and the public clearly benefits from the work done by the organization for its members.  Id. at 332-33.  Public access is often a key factor in this analysis.  This Board has consistently ruled that where public access is restricted, the subject property is being held primarily for the benefit of organization members, and not the public.  See, e.g., The Skating Club of Boston v. Assessors of Boston, Mass. ATB Findings of Fact and Reports 2007-193; Wing's Neck Conservation Foundation, Inc. v. Bourne, Mass. ATB Findings of Fact and Reports 2003-329; Nature Preserve, Inc. v. Assessors of the Town of Pembroke, Mass. ATB Findings of Fact and Reports 2000-796; Animal Rescue League v. Assessors of Boston, Mass. ATB Findings of Fact and Reports 2000-96; Marshfield Rod & Gun Club, Inc. v. Assessors of Marshfield, Mass. ATB Findings of Fact and Reports 1998-1130.  
In the case at hand, there was no public access to the subject property.  Private property surrounded the subject property on all sides, providing no method of access from any public way.  Although Forges claims that the public was free to view the property, and could arrange such a viewing by contacting an officer of Forges, there were no signs or other means to convey this information to the public.  Further, there was no evidence that any member of the public was ever granted access to the subject property.
Despite the case law cited above, Forges argued that the lack of public access to the subject property should not affect its eligibility for a charitable exemption.  Forges maintained that allowing public access to the subject property would be contrary to its charitable purpose of conservation and that its officers only entered on the land twice per year to perform inspections.  In contrast, the foregoing cases involved entities that were actively using the property on a regular basis.  
However, as this Board has previously held, "simply keeping the land open . . . is not enough to satisfy the requirement of 'occupying' the property within the meaning of the statute."  Nature Preserve, Inc. v. Assessors of Pembroke, supra at 808 (citing Animal Rescue League v. Assessors of Boston, supra at 102).  Rather, there must be an "active appropriation to the immediate uses of the charitable cause for which the owner was organized."  Board of Assessors of Boston v. The Vincent Club, 351 Mass. 10, 14, (1966)(quoting Babcock v. Leopold Morse Home for Infirm Hebrew & Orphanage, 225 Mass. 418, 421 (1917)).
Private owners who wish to conserve land in its natural state are afforded property tax relief under statutes other than G.L. c. 59, § 5, Third.  For example, G.L. c. 61B provides that land retained in its natural state may be taxed at no more than 25% of its fair market value, if certain requirements are met.  In addition, a taxpayer may also attain property tax relief by placing a conservation easement on land pursuant to G.L. c. 184, § 31.  See Parkinson v. Board of Assessors, 398 Mass. 112, 116 (1986).  These statutory provisions, and not the charitable exemption under G.L. c. 59, § 5, Third, are the appropriate vehicles through which owners of conservation land may be relieved of their property tax burden.  Further, these provisions evidence a legislative intent that owners of land kept in its open and natural state receive a significant tax benefit, but not a total exemption from tax.

On this basis, the Board found that Forges did not meet its burden of proving that it was a charitable organization that occupied the subject property to further its stated charitable purposes.  Accordingly, the Board issued a decision for the appellee.  

					   THE APPELLATE TAX BOARD
  
					
                     By: ________________________________
					Thomas W. Hammond, Jr., Chairman






								
A true copy,


Attest:  _________________________________
               Clerk of the Board

  The lot referenced in Docket No. F283127 ("lot A") was valued at $62,700; the lot referenced in Docket No. F283128 ("lot B") was valued at $31,100; and the lot referenced in Docket No. F283129 ("lot C") was valued at $34,800. 

  The tax assessed includes Community Preservation Act charges.

  Because the tax due for the fiscal year for each parcel was less than $3,000, timely payment of the tax was not required to establish the Board's jurisdiction.  See G.L. c. 59, § 64.
 Lot A is 6.56 acres, lot B is 1.019 acres, and lot C is 3.64 acres.

 The tax bill for lot B also includes a $1,700 valuation for buildings.  Neither party offered evidence concerning any buildings on the subject property.
  An organization's Articles of Organization are an appropriate means by which to determine its charitable purposes.  See Board of Assessors v. Vincent Club, 351 Mass. 10, 12 (1966).

1209


ATB 2007-1197