[Cite as The Chapel v. Testa, 129 Ohio St.3d 21, 2011-Ohio-545.]




         THE CHAPEL, APPELLANT, v. TESTA, TAX COMMR., APPELLEE.
        [Cite as The Chapel v. Testa, 129 Ohio St.3d 21, 2011-Ohio-545.]
Real property tax — Charitable-use exemption — R.C. 5709.12 — Holding land
        open to public for recreational use — Religious motivation not
        incompatible with charitable-use exemption.
 (No. 2010-0562 — Submitted February 2, 2011 — Decided February 10, 2011.)
               APPEAL from the Board of Tax Appeals, No. 2007-V-2.
                                 __________________
        Per Curiam.
        {¶ 1} This is an appeal from a decision of the Board of Tax Appeals
(“BTA”) in a real-property-tax-exemption case. Appellant, The Chapel, is a
nonprofit corporation organized in 1953 that operates two churches: the older
church at 35 Fir Hill Avenue in Akron and a newer one in the city of Green, south
of Akron, built on property that was acquired in 2000 and 2001. The latter church
and its surrounding acreage are the subject of The Chapel’s exemption
application, which relied partly on the house-of-public-worship exemption at R.C.
5709.07(A) and partly on the charitable-use exemption at R.C. 5709.12(B). The
tax commissioner granted the portion of the application relating to the “house of
public worship” pursuant to R.C. 5709.07(A)(2) and denied exemption to the
remainder of the property. On appeal, the BTA affirmed the commissioner’s
determination and modified the dividing line between taxable and exempt
portions of the church-owned tract.
        {¶ 2} Specifically at issue in The Chapel’s appeal to this court is land
improved for and devoted to recreational activities in which the general public
participates. The BTA affirmed the commissioner’s denial of exemption for this
land based on its finding that the use of the land was ancillary to the public
                            SUPREME COURT OF OHIO




worship performed on the parcel that the commissioner held exempt pursuant to
R.C. 5709.07(A).     On appeal, The Chapel renews its contention that the
recreational land should be split-listed and exempted under R.C. 5709.12(B)
because holding the land open to the public for recreation constitutes a charitable
use of real property. We agree, and we therefore reverse.
                                      Facts
       {¶ 3} Founded in 1934, The Chapel established itself as a nonprofit
corporation in 1953 and holds certification as a tax-exempt entity pursuant to
Section 501(c)(3) of the Internal Revenue Code. It moved its worship services to
35 Fir Hill Avenue in Akron in 1953, and after many years of expanding its
congregation and activities, The Chapel decided to open a second church. In
2000 and 2001, it acquired property in the city of Green south of Akron for that
purpose. That acquisition encompassed 79.8389 acres.
       {¶ 4} The Chapel then built a large church building with classrooms on
part of the property in 2001. The original site plan prepared in 2000 indicates
areas to be devoted to recreation, which currently include two softball diamonds,
a soccer field, and a jogging path that follows the circumference of the property.
The playing fields were developed some time after construction of the church
building. The jogging path was available for use in the fall or late summer of
2005. The recreational facilities were generally usable as of 2006. Although one
area is intended to be developed into a ball field, it had not been developed as of
the July 9, 2008 hearing before the BTA, because The Chapel was waiting for the
settling of newly graded ground.
       {¶ 5} The Chapel views itself as conducting a sports ministry in
connection with the recreational portions of the property and holds 14 events,
including church-sponsored soccer teams and flag football games. Most of the
participants in those events are community members who are not congregants of
The Chapel.




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       {¶ 6} The city of Green also has sports leagues that use the property.
FedEx and Chick-Fil-A conduct company events on the fields.              During the
summer months, the church stages a day camp called Straight Street for children
age six through eighth grade with several hundred participants. The jogging path
is used by the general public without restriction. An estimated 3,000 people
participated in activities on the recreational property (including use of the jogging
path) in 2008, most of whom were not congregants of The Chapel.
       {¶ 7} The Chapel had paid all costs to develop and maintain the property
but did not charge the public to use the recreational facilities. In the church’s
softball league a $25 registration fee is required for uniforms and umpire fees.
The property does not generate income for the church. The mayor of the city of
Green testified that the city itself benefited because the church developed and
made the property available for public use, thereby providing public recreational
facilities that the city would otherwise have to pay for itself.
       {¶ 8} On December 30, 2002, The Chapel filed an application that
sought to exempt three parcels that total 78.8963 acres. The application asked for
an exemption of 57.9768 acres under R.C. 5709.07 as land associated with a
house of public worship and sought exemption for another 20.9195 acres under
R.C. 5709.12 as land used exclusively for a charitable use.            In his final
determination, the commissioner granted the exemption to part of the property
pursuant to R.C. 5709.07(A)(2), but held that the recreational portion of the
property did not qualify for a charitable-use exemption under R.C. 5709.12(B).
The Chapel appealed, and the BTA affirmed the denial of the exemption to the
recreational property.
                                       Analysis
       {¶ 9} When a BTA decision is appealed, this court looks to see if that
decision was “reasonable and lawful.” R.C. 5717.04. Under this standard, we
acknowledge that “ ‘[t]he BTA is responsible for determining factual issues and,




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if the record contains reliable and probative support for these BTA
determinations,’ ” we will affirm them. Satullo v. Wilkins, 111 Ohio St.3d 399,
2006-Ohio-5856, 856 N.E.2d 954, ¶ 14, quoting Am. Natl. Can Co. v. Tracy
(1995), 72 Ohio St.3d 150, 152, 648 N.E.2d 483. On the other hand, we “ ‘will
not hesitate to reverse a BTA decision that is based on an incorrect legal
conclusion.’ ” Id., quoting Gahanna-Jefferson Local School Dist. Bd. of Edn. v.
Zaino (2001), 93 Ohio St.3d 231, 232, 754 N.E.2d 789.
       {¶ 10} In the present case, the commissioner found that the primary use of
the recreational property was by the public, not by The Chapel itself. The BTA
did not disturb that factual finding, and it is supported by the record. We must
therefore determine whether the property is exempt under R.C. 5709.12(B) in
light of that finding. Our review of this question of law is not deferential but de
novo. Akron Centre Plaza, L.L.C. v. Summit Cty. Bd. of Revision, 128 Ohio St.3d
145, 2010-Ohio-5035, 942 n.E.2d 1042, ¶ 10.
   Under R.C. 5709.12(B), property owned by an institution that is accessible
            without charge to the public for recreational use is exempt
       {¶ 11} Under R.C. 5709.12(B), “[r]eal and tangible personal property
belonging to institutions that is used exclusively for charitable purposes shall be
exempt from taxation * * *.” In Highland Park Owners, Inc. v. Tracy (1994), 71
Ohio St.3d 405, 644 N.E.2d 284, we held that to qualify for exemption under R.C.
5709.12(B), the property must belong to an institution and be used exclusively for
charitable purposes. Id. at 406.
       {¶ 12} It is undisputed that The Chapel qualifies as an “institution” for
purposes of R.C. 5709.12(B). Nor is there dispute concerning the commissioner’s
decision   to   grant   the   house-of-public-worship   exemption     under   R.C.
5709.07(A)(2) to approximately 57 acres of The Chapel’s contiguous parcels.
       {¶ 13} We have held that making property accessible to institution
members and to the general public for recreational purposes without charge is a




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charitable use of property. Highland Park Owners at 407. According to the
commissioner’s final determination in this case, the evidence shows that “the
primary users of the recreation fields are outside parties, including independent
sports leagues, baseball clinics, cycling clubs and youth sports programs
conducted through the City of Green. Additionally, the applicant allows the
public to use its walking and jogging trails.”1 This factual finding describes a
charitable use of property under Highland Park Owners. Because The Chapel is
incontestably an institution, the commissioner’s own factual findings compel the
conclusion that the property is exempt under Highland Park Owners.
        {¶ 14} Against this straightforward reasoning, the commissioner denied
the exemption on the grounds that “merely holding the property open to the public
and allowing various third parties to use it” is not a charitable use and “does not
qualify [the property] for exemption under R.C. 5709.12.”                     The passage is a
clear error of law under Highland Park Owners.
        {¶ 15} However, once his determination had been appealed to the BTA,
the commissioner took a different tack by arguing that The Chapel “should be
precluded from seeking exemption under R.C. 5709.12(B) [the charitable-use
exemption] for property that would not otherwise qualify under R.C.
5709.07(A)(2) [the public-worship exemption].” The Chapel v. Levin (Mar. 2,
2010), BTA No. 2007-V-2, at 11. The BTA concluded that the commissioner had
properly denied the exemption because the “recreational fields and jogging path
are ancillary to appellant’s primary use for public worship” of the contiguous



1. At oral argument the commissioner’s counsel suggested that the evidence at the BTA showed a
division of use “about half” between recreational activities organized by The Chapel (which are
aimed at involving the general public) and direct public use of the facilities. But the distinction
plainly does not matter under the commissioner’s analysis, because making the property available
for public use cannot, in the commissioner’s view, qualify the property for exemption so long as
the “overarching” or primary purpose in doing so is to support The Chapel’s mission of spreading
the Christian faith.




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parcels owned by The Chapel. Id. at 13. Both the commissioner’s argument and
the BTA’s decision are predicated on a misreading of the case law.
      Neither church ownership nor religious motivations defeat a claim of
               exemption for charitable use under R.C. 5709.12(B)
       {¶ 16} As already noted, the commissioner’s finding leads to the
conclusion that the property is exempt pursuant to Highland Park Owners.
Nonetheless, the BTA denied exemption because the property use was “ancillary”
to the church’s public-worship use of adjacent acreage.         The commissioner
defends the BTA’s decision by arguing that church ownership and the church’s
motivation to use its property in accordance with its faith-based sense of mission
are consequential elements of the exemption claim.
       {¶ 17} The case law establishes that they are not. To be sure, we have
stated that “uses which are merely supportive of public worship may not be
exempted.” Faith Fellowship Ministries, Inc. v. Limbach (1987), 32 Ohio St.3d
432, 436, 513 N.E.2d 1340; accord Moraine Hts. Baptist Church v. Kinney
(1984), 12 Ohio St.3d 134, 137, 12 OBR 174, 465 N.E.2d 1281.               But that
statement occurs only in the context of a claim of exemption under R.C.
5709.07(A)(2), which exempts “[h]ouses used exclusively for public worship * *
* and the ground attached to them that is not leased or otherwise used with a view
to profit and that is necessary for their property occupancy, use, and enjoyment.”
       {¶ 18} “[M]erely supportive of public worship” characterizes land use that
is not sufficiently linked by necessity to public worship and therefore does not
qualify the land for the house-of-public-worship exemption under R.C.
5709.07(A)(2). We have never employed that phrase to deny a charitable-use
exemption where, as in this case, the use is of a kind that has already been held to
constitute an exempt use under R.C. 5709.12(B). Quite simply, the fact that a
church is the institution that owns property and that puts it to an established




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charitable use is usually irrelevant to a claim for exemption under R.C.
5709.12(B).
       {¶ 19} Indeed, our recent cases have insisted that religious ownership and
motives are not inimical to a charitable-use claim.            In True Christianity
Evangelism v. Tracy (1999), 87 Ohio St.3d 48, 716 N.E.2d 1154, we addressed a
claim of exemption under R.C. 5709.12(B) with respect to a house used as an
office for preparing tracts involving religious and spiritual themes that were
distributed free of charge at various events.         The BTA had affirmed the
commissioner’s denial of the charitable-use exemption on the grounds that
“appellant’s purpose is religious rather than charitable.”         True Christianity
Evangelism v. Tracy (Sept. 25, 1998), BTA No. 96-K-904, 1998 WL 683022, at
*3. We reversed, holding that the BTA “went astray” when it predicated the
denial of exemption on the appellant’s “purpose * * * to disseminate a religious
message.” True Christianity, 87 Ohio St.3d at 51, 716 N.E.2d 1154. We rejected
the BTA’s decision in light of the well-settled principle that an “institution need
not be charitable to be eligible for exemption under R.C. 5709.12(B)” and that “
‘any institution, irrespective of its charitable or noncharitable character, may take
advantage of a tax exemption if it is making exclusive charitable use of the
property.’ [Emphasis sic.]” Id. at 51 and 50, quoting White Cross Hosp. Assn. v.
Bd. of Tax Appeals (1974), 38 Ohio St.2d 199, 203, 67 O.O.2d 224, 311 N.E.2d
862 (Stern, J., concurring).
       {¶ 20} On remand, the BTA acknowledged that “aspects of [the
organization’s president’s] activities, and those of the institutions with which he is
associated, may arguably be considered charitable in nature,” but nonetheless
denied exemption because “the primary use to which the property is devoted is an
evangelistic one.” True Christianity Evangelism v. Tracy (Jan. 14, 2000), BTA
No. 96-K-904, 2000 WL 31781, at *2. Again we reversed. True Christianity
Evangelism (2001), 91 Ohio St.3d 117, 742 N.E.2d 638. Because the case law




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established that the “ ‘dissemination of useful information to benefit mankind is,
traditionally, charity,’ ” and because the “information disseminated by appellant
attempts to encourage people to read the Bible and to live up to its moral
standards,” the use of the property qualified as charitable under R.C. 5709.12(B).
Id. at 120, quoting Herb Soc. of Am., Inc. v. Tracy (1994), 71 Ohio St.3d 374,
376, 643 N.E.2d 1132.
       {¶ 21} Taken together, our two decisions in True Christianity establish
that religious institutions may not be discriminated against in the consideration of
a claim for exemption under R.C. 5709.12(B). Namely, if the use to which
property is put otherwise qualifies as charitable, neither the fact of ownership by a
religious organization nor the existence of religious motives in connection with
the charitable use will defeat the claim of exemption. See also First Baptist
Church of Milford, Inc. v. Wilkins, 110 Ohio St.3d 496, 2006-Ohio-4966, 854
N.E.2d 494, ¶ 17 (“Ownership by a religious institution does not disqualify
property from being considered for exemption under R.C. 5709.12”); NBC-USA
Hous., Inc.—Five v. Levin, 125 Ohio St.3d 394, 2010-Ohio-1553, 928 N.E.2d
715, ¶ 17 (under R.C. 5709.12(B), “we have emphasized that the entitlement of a
particular parcel to exemption depends on the use of the property, not the nature
of the institution”). Indeed, in our recent decision in Church of God in N. Ohio v.
Levin, 124 Ohio St.3d 36, 2009-Ohio-5939, 918 N.E.2d 981, ¶ 32, the majority
opinion emphasized that a church “would stand on equal footing with any other
institution in applying to exempt” property devoted to an activity that “actually
constitutes charitable use.”
       {¶ 22} Given the reassertion of the True Christianity doctrine in Church
of God, the commissioner’s attempted reliance on the latter case is anomalous.
The commissioner charges that The Chapel has “strategically postured its claim”
so as to avoid the limitations imposed with respect to R.C. 5709.07(A)(2). But
unlike the applicant in Church of God, The Chapel actually puts the property at




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issue to a use that has been established to be charitable in other contexts. By
contrast, the applicant in Church of God attempted to establish its claim of
exemption by arguing that the administrative use of the building (not a charitable
use in itself) was ancillary to another activity that was charitable: the public-
worship activity of the denomination’s local congregations.      In rejecting the
exemption claim in Church of God, we held that public worship does not by itself
constitute a charitable use. We predicated our holding on the longstanding
distinction between the public-worship and charitable-use exemptions, as well as
the doctrine that the limitations on the public-worship exemption ought not to be
evaded by an expansive construction of the charitable-use exemption. Church of
God, 124 Ohio St.3d 36, 2009-Ohio-5939, 918 N.E.2d 981, ¶ 26-30.
       {¶ 23} The exemption claim in this case is the opposite of what we
confronted in Church of God. Here the applicant argues not that the property’s
use is exempt by being ancillary to activities conducted elsewhere, but that the
very activity on the property itself entitles it to exemption. And unlike the
claimant in Church of God, The Chapel does not seek to expand the scope of the
charitable-use exemption; it asks only to be granted the same exemption that any
nonreligious entity would plainly qualify for pursuant to Highland Park Owners,
71 Ohio St.3d 405, 644 N.E.2d 284. Because the denial of the exemption claim
by the commissioner and the BTA rests upon legal error, the BTA’s decision must
be reversed.
         The tax commissioner has waived his objections to The Chapel’s
      prospective-use argument, and the case will be remanded to the BTA
       {¶ 24} Reversing the decision below requires us to consider two
additional matters.
       {¶ 25} First, the BTA acknowledged that it did not “reach the question of
whether or not the contested acreage was used for an exempt purpose on January
1 of the year for which exemption was requested, as the law requires.” The




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Chapel v. Levin (Mar. 2, 2010), BTA No. 2007-V-2, at 1, fn. 1. As a general
matter, the claimant must bear the burden to show that it meets the statutory
prerequisites for the tax exemption or reduction. Key Servs. Corp. v. Zaino
(2002), 95 Ohio St.3d 11, 15-16, 764 N.E.2d 1015; accord Anderson/Maltbie
Partnership v. Levin, 127 Ohio St.3d 178, 2010-Ohio-4904, 937 N.E.2d 547, ¶ 16,
quoting Ares, Inc. v. Limbach (1990), 51 Ohio St.3d 102, 104, 554 N.E.2d 1310
(in an exemption case “the onus is on the taxpayer to show that the language of
the statute ‘clearly express[es] the exemption’ in relation to the facts of the
claim”).
         {¶ 26} On the other hand, the commissioner’s final determination in this
case did not make any findings concerning the relationship between the tax-lien
date and when recreational use was intended or actually begun.                                     The
commissioner did not state that the time lapse constituted a ground for denying
the exemption, nor did the commissioner mention the issue in his brief at the
BTA. The latter omission is especially significant in light of the fact that The
Chapel argued its entitlement under the prospective-use doctrine to the BTA.2
Moreover, we have observed that when the commissioner fails to raise a
particular issue in a BTA brief, the BTA can reasonably conclude that the issue
has been waived. See HealthSouth Corp. v. Levin, 121 Ohio St.3d 282, 2009-
Ohio-584, 903 N.E.2d 1179, ¶ 18, fn. 2.
         {¶ 27} Under all these circumstances, we hold that the commissioner has
waived any reliance on arguments that the recreational use started at a later date
than that requested in the exemption application. Once the commissioner’s final



2. The commissioner’s counsel stated at oral argument that The Chapel mentioned prospective
use for the first time in the reply brief at the court. That is mistaken. At page 18 in its brief before
the BTA, The Chapel cited Episcopal School of Cincinnati v. Levin, 117 Ohio St.3d 412, 2008-
Ohio-939, 884 N.E.2d 561, and argued that the evidence showed that the prospective-use test was
satisfied.




                                                  10
                                      January Term, 2011




determination omitted to address the issue as a ground for denying the exemption,
that official incurred the burden to timely notify The Chapel that it must prove the
existence of a previously unaddressed element of the exemption claim. Cf. Key
Servs. Corp., 95 Ohio St.3d at 16, 764 N.E.2d 1015 (BTA could not refuse to
consider elements of a tax-reduction claim where during the BTA appeal “the
commissioner wanted to show that Key did not provide the services eligible for a
refund under R.C. 5739.071” and “attempted to inquire into the facts to support
                                           3
his decision to deny the refund”).             By omitting any mention of the issue in its
BTA brief, the commissioner failed to give notice and thereby waived the
argument.
         {¶ 28} As a result of his omissions the commissioner, not The Chapel, is
bound by waiver. On remand, the exemption will be granted with respect to the
recreational acreage as of the tax-lien date to which the original exemption
application relates.4




3. At oral argument, the commissioner took the position that the tax-lien-date issue was
jurisdictional and could not be waived. Apparently the commissioner relies on Sylvania Church of
God v. Levin, 118 Ohio St.3d 260, 2008-Ohio-2448, 888 N.E.2d 408, in which we affirmed a
decision of the BTA that upheld the commissioner’s denial of an exemption on the grounds that he
lacked jurisdiction because the applicant neither owned nor used the property on the lien date. Id.
at ¶ 9. That case is not apposite, because the focus in that case was ownership on the lien date, not
use. See Sylvania Church of God v. Wilkins (May 4, 2007), BTA No. 2006-B-48, at 1, 4, 2007
WL 1366327, affirmed, 118 Ohio St.3d 260, 2008-Ohio-2448, 888 N.E.2d 408. We have held that
the applicant’s status as owner constitutes a jurisdictional prerequisite to filing an exemption
claim. See Performing Arts School of Metro. Toledo, Inc. v. Wilkins, 104 Ohio St.3d 284, 2004-
Ohio-6389, 819 N.E.2d 649. By contrast, we are not aware of any case that has held that the issue
of the use of property on the lien date poses a jurisdictional question. To the contrary: the issue of
how the property is used on the tax-lien date is a substantive issue that constitutes part of the
merits of the exemption claim. Accordingly, issues relating to that use can be waived.

4. The application seeks exemption for three parcels for tax year 2002, with a tax-lien date of
January 1, 2002. Remission is sought for two of the three parcels for tax years 2001 and 2000,
and The Chapel did not seek additional remission beyond this. On remand, the BTA may furnish
whatever additional clarification may be necessary concerning the amount of remission that
pertains to the recreational acreage.




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                            SUPREME COURT OF OHIO




       {¶ 29} The second remaining issue is that of the precise metes and bounds
of the recreational acreage. The BTA concluded its decision with an extensive
discussion of how to draw the line between taxable and exempt portions of The
Chapel’s property. Based on its analysis and representations by the parties, the
BTA stated that it would “treat the recreational areas as 18.6795 acres” but had no
need to further delineate the acreage. We hold that 18.6795 acres are subject to
exemption based on recreational use by the public, and we remand to the BTA to
effectuate that holding. On remand, the BTA will have jurisdiction to perform
whatever further delineation of the exempt acreage may be necessary.
                                   Conclusion
       {¶ 30} For the foregoing reasons, the BTA acted unreasonably and
unlawfully when it affirmed the denial of The Chapel’s claim for charitable-use
exemption. We therefore reverse the decision of the BTA and remand for further
proceedings.
                                                                Decision reversed
                                                             and cause remanded.
       O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,
LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.
                              __________________
       Leiby, Hanna, Rasnick, Towne & Evanchan and Stephen P. Leiby, for
appellant.
       Michael DeWine, Attorney General, and Ryan P. O’Rourke and Sophia
Hussain, Assistant Attorneys General, for appellee.
                           ______________________




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