[Cite as Anderson/Maltbie Partnership v. Levin, 127 Ohio St.3d 178, 2010-Ohio-4904.]




        ANDERSON/MALTBIE PARTNERSHIP ET AL., APPELLEES, v. LEVIN,
                              TAX COMMR., APPELLANT.
                  [Cite as Anderson/Maltbie Partnership v. Levin,
                       127 Ohio St.3d 178, 2010-Ohio-4904.]
Real property tax — R.C. 5709.07 — Property cannot be exempted from taxation
        as a public schoolhouse when the owner leases the property to the school
        for profit.
   (No. 2009-1671 — Submitted May 25, 2010 — Decided October 12, 2010.)
              APPEAL from the Board of Tax Appeals, No. 2007-A-11.
                                 __________________
                               SYLLABUS OF THE COURT
Property cannot be exempted from taxation as a public schoolhouse when the
        owner leases the property to the school for profit. (R.C. 5709.07(A)(1),
        construed.)
                                 __________________
        LANZINGER, J.
        {¶ 1} This is an appeal from a decision of the Board of Tax Appeals
(“BTA”) concerning a real property tax exemption. Appellee Anderson/Maltbie
Partnership (“AMP”) is a for-profit entity that leases property to an Ohio
community school. Appellee LKH Victory Corporation is a nonprofit entity that
runs the school under the name Cincinnati College Preparatory Academy
(“CCPA”).       AMP and CCPA sought to exempt the parcel under R.C.
5709.07(A)(1), the “public-schoolhouse exemption.”              The Tax Commissioner
denied the exemption because of the for-profit nature of the lease, but the BTA
reversed. Applying its analysis from the earlier case Performing Arts of Metro.
Toledo, Inc. v. Wilkins (Dec. 20, 2002), BTA No. 2001-J-977, reversed on other
                                  SUPREME COURT OF OHIO




grounds, 104 Ohio St.3d 284, 2004-Ohio-6389, 819 N.E.2d 649, the BTA held
that the property was entitled to a tax exemption based on the lessee’s nonprofit
use of the property as a public school.1
        {¶ 2} The Tax Commissioner appealed, and we now reverse.
                                              Facts
        {¶ 3} On December 30, 2002, AMP and CCPA jointly filed their
exemption application, which sought to exempt the property for tax year 2002 and
to obtain remission of taxes for tax years 1999, 2000, and 2001. The application
cited R.C. 5709.07(A)(1) as the basis for exemption and explained its claim as
follows:
        {¶ 4} “[CCPA] is a public community school established under the
authority of O.R.C. Chapter 3314, and was incorporated as an Ohio non-profit
corporation on December 14, 1998. [CCPA] was incorporated for educational
purposes and operates as a community school.                    As an entity organized for
educational purposes, [CCPA] has applied for and received Internal Revenue
Code §501(c)(3) tax-exempt status from the Internal Revenue Service as a public
charity. * * * In accordance with O.R.C. §3314.02, [CCPA] entered into a
charter contract with the State of Ohio Department of Education in 1999, which
formally established [CCPA] as a public community school under Ohio law.”
        {¶ 5} At the BTA, the parties agreed to a set of stipulations based upon
the documents in the record. The stipulations included the following:
        {¶ 6} ●         Since its inception in 1998, CCPA has operated as a
community school for children in kindergarten through eighth grade.



1. The BTA granted the exemption in Performing Arts, but on appeal, this court reversed on other
grounds, holding that the exemption application had to be dismissed for lack of jurisdiction
because the lessee, but not the owner, had applied. Performing Arts, 104 Ohio St.3d 284, 2004-
Ohio-6389, 819 N.E.2d 649, ¶ 13, 15, 20. Consistent with the holding of Performing Arts, only
AMP as owner had standing to file the application in this case, and this opinion will usually refer
to the appellants collectively as “AMP.”




                                                2
                                January Term, 2010




       {¶ 7} ●       On July 28, 1999, CCPA entered into a triple-net lease with
AMP as lessor, and occupied the property under that lease and its amendments
from October 7, 1999 through October 6, 2004.
       {¶ 8} ●       AMP had purchased the property leased by CCPA in 1987
for $1,325,000.
       {¶ 9} ●       The monthly rental for the leased property was $22,958.04.
       {¶ 10} ●      CCPA is contractually obligated under the triple-net lease to
pay all real estate taxes and assessments during the lease term.
       {¶ 11} ●      AMP did not conduct any business at the property during the
lease term, other than leasing it to CCPA.
       {¶ 12} For its part, AMP stipulated that it was an “entity of two or more
persons to carry on as co-owners a business for profit pursuant to O.R.C. §
1775.05(A),” i.e., a for-profit partnership.
                                      Analysis
       {¶ 13} This case presents a significant issue that arises in the context of
Ohio’s community schools. By statute, a community school “is a public school,
independent of any school district, and is part of the state’s program of
education.” R.C. 3314.01(B); see State ex rel. Ohio Congress of Parents &
Teachers v. State Bd. of Edn., 111 Ohio St.3d 568, 2006-Ohio-5512, 857 N.E.2d
1148, ¶ 7 (detailing aspects of community schools). Since 1852, Ohio law has
provided the exemption for “public schoolhouses” that is currently codified at
R.C. 5709.07(A)(1). 50 Ohio Laws 135, 137. The exemption has been applied to
public and private property: to public schools owned and operated by the public
school districts in Ohio, and to nonprofit private and parochial schools operated
for the public benefit.
       {¶ 14} Typically, public school districts own their own school buildings;
but as a community school, CCPA is not owned and operated by any school
district. Community schools raise novel issues of exemption because, by statute,



                                          3
                             SUPREME COURT OF OHIO




they qualify as public schools but often operate on privately owned property. And
in this case, the school occupies the property under a commercial, for-profit lease.
       {¶ 15} The Tax Commissioner in his final determination held that
although community schools are public schools, the fact that the property is
privately owned and is leased to the school under a for-profit lease makes the
property ineligible for the exemption.          Because we conclude that the
commissioner’s determination reflects a proper application of the standard for
exemption that we articulated in Gerke v. Purcell (1874), 25 Ohio St. 229,
paragraph eight of the syllabus, we reverse the decision of the BTA and reinstate
the commissioner’s denial of the exemption.
      Property leased to a school under a for-profit lease is not exempt as a
         “public schoolhouse,” because private property can qualify for
           the exemption only if it is used “without any view to profit”
       {¶ 16} When a property owner applies for an exemption, we consider an
overarching principle.    Because laws that exempt property from tax are in
derogation of equal rights, they must be strictly construed. First Baptist Church
of Milford v. Wilkins, 110 Ohio St.3d 496, 2006-Ohio-4966, 854 N.E.2d 494, ¶
10; Campus Bus Serv. v. Zaino, 98 Ohio St.3d 463, 2003-Ohio-1915, 786 N.E.2d
889, ¶ 8. The principle of strict construction requires that the statute’s language
be construed against the exemption, meaning that 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. Ares, Inc. v. Limbach (1990), 51 Ohio St.3d
102, 104, 554 N.E.2d 1310; Lakefront Lines, Inc. v. Tracy (1996), 75 Ohio St.3d
627, 629, 665 N.E.2d 662; H.R. Options, Inc. v. Wilkins, 102 Ohio St.3d 1214,
2004-Ohio-2085, 807 N.E.2d 363, ¶ 2; In re Estate of Roberts (2002), 94 Ohio
St.3d 311, 314, 762 N.E.2d 1001. The fact that the burden is on the taxpayer
means that “ ‘[i]n all doubtful cases exemption is denied.’ ” A. Schulman, Inc. v.
Levin, 116 Ohio St.3d 105, 2007-Ohio-5585, 876 N.E.2d 928, ¶ 7, quoting




                                         4
                                   January Term, 2010




Youngstown Metro. Hous. Auth. v. Evatt (1944), 143 Ohio St. 268, 273, 28 O.O.
163, 55 N.E.2d 122.
        {¶ 17} The statute we must consider is currently codified at R.C.
5709.07(A)(1) and provides: “The following property shall be exempt from
taxation: (1) Public schoolhouses, the books and furniture in them, and the
ground attached to them necessary for the proper occupancy, use, and enjoyment
of the schoolhouses, and not leased or otherwise used with a view to profit.”
        {¶ 18} The public-schoolhouse exemption was enacted along with other
exemptions in the wake of the adoption of the new constitution in 1851. 50 Ohio
Laws 135, 137. Before the adoption of the 1851 Constitution, “the whole matter
of taxation was committed to the discretion of the general assembly.” Zanesville
v. Richards (1855), 5 Ohio St. 589, 592. And the “right to make exceptions and
exemptions was unquestionable.” Id. But the 1851 Constitution circumscribed
that power through Article XII, Section 2, which required uniform taxation of
property and enumerated specific types of exemption the legislature could pass.
Id. The legislature’s power to pass exemptions was construed to be limited to
exemptions expressly authorized by the Constitution. Id. at 592-593; Denison
Univ. v. Bd. of Tax Appeals (1965), 2 Ohio St.2d 17, 24, 31 O.O.2d 10, 205
N.E.2d 896. 2
        {¶ 19} This court in Gerke, 25 Ohio St. 229, considered the claimed tax
exemption of Catholic parochial schools in view of the specific constitutional
authorizations and the statutory language of the exemptions. We determined that
the Constitution’s authorization of a public-schoolhouse exemption was
applicable only to school buildings that “belong to the public,” buildings that “are
designed for the school established and conducted under the authority of the

2. In 1931, an amendment restored to the General Assembly the plenary power to enact
exemptions: the power is limited only by the provisions of Article I of the Constitution. See
Denison Univ., paragraph three of the syllabus; Dayton v. Cloud (1972), 30 Ohio St.2d 295, 59
O.O.2d 370, 285 N.E.2d 42, paragraph one of the syllabus.




                                             5
                             SUPREME COURT OF OHIO




public.” Id. at 242. In contrast, we held that the statute’s reference to public
schoolhouses is “not used in the sense of ownership” but rather of the “uses to
which the property is devoted,” with the result that the exemption applies to
private property used to support instruction that is “for the benefit of the public.”
Id. at 246-247.
       {¶ 20} The term “public” was construed differently in the statute to make
sense of the statute’s limitation that the schoolhouse grounds must not be “leased
or otherwise used with a view to profit.” Because political subdivisions such as
public school districts are inherently nonprofit, the condition did not seem
“appropriate if intended to apply only to institutions established by the public.”
Id. at 247.   On the other hand, the prohibition against making a profit had
“marked significance when applied to private property,” and accordingly, the
statute was construed to reach private property. Id. The constitutional basis for
exempting private property when used as a school lay in the authorization of
exemptions for “institutions of purely public charity.” Id. at 243-244. As a result,
the “exclusion of all idea of private gain or profit” constitutes a basic condition
that private property must satisfy to qualify for this exemption. Id. at 247.
       {¶ 21} One dispute between the parties is therefore immaterial: the
question whether R.C. 5709.07’s limiting clause “not leased or otherwise used
with a view to profit” applies to the schoolhouse itself as well as the “ground
attached to” the schoolhouse. Ultimately, the dispute is inconsequential because
the holding of Gerke clearly establishes that the schoolhouse itself cannot qualify
for exemption unless it is used “without any view to profit.” Gerke, 25 Ohio St.
229, paragraph eight of the syllabus.
       {¶ 22} Gerke holds that the public-schoolhouse exemption does extend to
privately owned property, but only when that property is “appropriated to the
support of education for the benefit of the public without any view to profit,” an
essential element being the “exclusion of all idea of private gain or profit.” Gerke




                                          6
                                     January Term, 2010




at 247. By seeking to exempt a commercial office building that is leased to the
school for profit, AMP seeks a broader exemption, an application that we reject.
         {¶ 23} The Tax Commissioner’s final determination did not cite Gerke,
but he did deny AMP’s exemption because the property was subject to a for-profit
commercial lease. We hold this analysis to be correct under Gerke: property
cannot be exempted from taxation as a public schoolhouse when the owner leases
the property to the school for profit.3
           Cleveland State Univ. v. Perk does not authorize the grant of a
        public-schoolhouse exemption when land with permanent structures
               is leased to a school for profit under a commercial lease
         {¶ 24} Both the BTA decision and AMP’s brief heavily rely on Cleveland
State Univ. v. Perk (1971), 26 Ohio St.2d 1, 55 O.O.2d 1, 268 N.E.2d 577.
Cleveland State is inapposite for two reasons. First, Cleveland State involved
temporary modular structures installed on the university’s land.                        Both the
reasoning and the syllabus law of that case restrict Cleveland State’s holding to
that particular situation. Second, although the public-college exemption in R.C.
5709.07(A)(4) generally parallels the public-schoolhouse exemption at R.C.
5709.07(A)(1), the former expressly authorizes a broader exemption of
“buildings” so long as they are “connected with” the public college.




3. Although he did not properly raise the alternative argument, the Tax Commissioner cites cases
that allegedly overrule Gerke’s holding that a schoolhouse could be “public” even though
privately owned. We disagree. The later cases the Tax Commissioner cites in this regard do not
undermine Gerke. See Weir v. Day (1878), 35 Ohio St. 143 (granting injunction against private
school’s use of a public school building under a lease given the circumstances of the case; this
case does not address any issue of taxation or exemption); Gilmour v. Pelton (1877), 5 Ohio
Dec.Rep. 447 (although common pleas court exempted parochial schools based on a charitable
exemption rather than the public-schoolhouse exemption, according to the unofficial reporter’s
note on the history of the case in Ohio Decisions Reprint, the Supreme Court’s affirmance cited
and did not retreat from Gerke); Watterson v. Halliday (1907), 77 Ohio St. 150, 82 N.E. 962
(holding that parish houses used as residences by priests did not qualify for a charitable exemption
or an exemption for a house of worship; this case does not address the schoolhouse exemption).




                                                 7
                            SUPREME COURT OF OHIO




       {¶ 25} In Cleveland State, the university (an instrumentality of the state of
Ohio) enjoyed the exemption of a parcel of land under R.C. 5709.08, which
exempts “public property used exclusively for a public purpose.” Not having the
wherewithal to construct permanent buildings on the site, Cleveland State
University rented temporary modular buildings that were installed at the site and
used for classrooms and faculty offices. The narrow question was whether the
modular buildings could qualify for exemption from real property taxation under
the public-college exemption.
       {¶ 26} In answering affirmatively, we noted two significant predicates for
granting the exemption. First, this court had rejected the proposition that college
buildings were required to be used for “charitable purposes” to qualify for
exemption. Cleveland State, 26 Ohio St.2d at 6, 55 O.O.2d 1, 268 N.E.2d 577,
citing Denison Univ., 2 Ohio St.2d 17, 31 O.O.2d 10, 205 N.E.2d 896, paragraph
four of the syllabus. Second, given the structure of the public-college exemption,
the express limitation to property “not used with a view to profit” applied only to
the “lands connected with” public colleges, not to the separately mentioned
“buildings connected with” the institution. Cleveland State at 6-7, citing Kenyon
College v. Schnebly (Knox C.P.1909), 12 Ohio C.C.(N.S.) 1, affirmed, 81 Ohio
St. 514, 91 N.E. 1138.     R.C. 5709.07(A)(4) exempts “[p]ublic colleges and
academies and all buildings connected with them, and all lands connected with
public institutions of learning, not used with a view to profit”; the phrase “not
used with a view to profit” modifies “lands,” but not “buildings.”
       {¶ 27} Combining these principles, we concluded that the modular
buildings qualified as “buildings connected with” the university since they were “
‘with reasonable certainty used in furthering or carrying out the necessary objects
and purposes of the college.’ ” Cleveland State, 26 Ohio St.2d at 8, 55 O.O.2d 1,
268 N.E.2d 577, quoting Denison Univ., 2 Ohio St.2d at 21-22, 31 O.O. 2d 10,
205 N.E.2d 896. The syllabus states that an exemption could be allowed for




                                         8
                               January Term, 2010




“buildings located on the campus of a state university and used exclusively for
classrooms and faculty offices” even though the buildings were “leased for a term
of years, with provision for rental therefor, from a corporation for profit.”
Cleveland State, paragraph two of the syllabus. Cf. Athens Cty. Aud. v. Wilkins,
106 Ohio St.3d 293, 2005-Ohio-4986, 834 N.E.2d 804, ¶ 19-22 (public-college
exemption not available for off-campus private dormitories owned by a for-profit
company, when college did not lease the buildings and would not itself benefit
from the tax exemption).
       {¶ 28} In contrast, the present case raises the distinct issue whether the
“schoolhouse” itself and the land beneath it may qualify for a public-schoolhouse
exemption, when both are leased from a for-profit landlord. Cleveland State does
not control the present case, and we cannot extend its holding to the present facts
in light of the restrictive character of the public-schoolhouse exemption.
    Although leased property may sometimes qualify for exemption, property
     subject to a commercial lease with a for-profit landlord does not qualify
       {¶ 29} AMP also contends that a commercial lease is irrelevant to the
issue of exempt status so long as the lessee uses the property for exempt purposes.
AMP emphasizes certain decisions that allow the exemption of leased property.
       {¶ 30} This argument raises two questions.           The first is whether
ownership and use must coincide for a building to qualify as an exempt public
schoolhouse.   Gerke answers this question by declaring that the “public” in
“public schoolhouse” “is not used in the sense of ownership, but as descriptive of
the uses to which the property is devoted.” Gerke, 25 Ohio St. at 246-247. Thus,
property “appropriated to the support of education for the benefit of the public
without any view to profit” qualifies for exemption, id. at 247, and that standard
contains no requirement that the owner be the entity that operates the school. It
follows that a community school that leases its building may still receive the
benefit of tax exemption as a public schoolhouse.



                                         9
                                SUPREME COURT OF OHIO




        {¶ 31} But property subject to a commercial, for-profit lease is a different
matter. Gerke specifically limits the exemption of privately owned property to
property that is used “without any view to profit.” The second question raised by
AMP’s argument is whose use should be considered — the lessee’s, or both the
lessor’s and the lessee’s?
        {¶ 32} AMP relies on Bexley Village, Ltd. v. Limbach (1990), 68 Ohio
App.3d 306, 588 N.E.2d 246, to maintain that the commissioner and the BTA
must focus exclusively on the lessee’s use of the property. In Bexley Village, the
Tenth District Court of Appeals granted the public-college exemption for a
parking lot that was leased by a private developer to Capital University for a rent
of $1 per year. Instead of drawing the obvious conclusion that the nominal
character of the rent ensured that the lease was not for profit, the Tenth District
held that in deciding whether the property was “used with a view to profit,” one
entity must be considered, which in that case was the lessee, Capital University.
        {¶ 33} Because Bexley Village addresses the public-college exemption,
we regard the case as inapposite. We hold that under the public-schoolhouse
exemption, the restriction that the property not be used with a view to profit
requires examination of the total use of the property by both lessor and lessee. If
the lease is intended to generate profit for the lessor, the property does not qualify
for exemption; similarly, the property does not qualify if the lessee’s use is
intended to generate profit.4
        {¶ 34} It follows that because AMP leases the property to CCPA under a
for-profit lease, the public-schoolhouse exemption is not available in the present
case.
                  Case law interpreting the exemption for houses of

4. We note, however, that there may be situations in which an exemption could be allowed under
R.C. 5709.07 even though the property generated rental income for the owner. See R.C.
5709.07(B) (possibility of exemption for leased property when income goes to municipal
corporation or school district).




                                             10
                              January Term, 2010




                   public worship does not apply to this case
       {¶ 35} AMP also relies on BTA decisions in which the BTA reversed the
Tax Commissioner’s denial of exemption under R.C. 5709.07(A)(2), the house-
of-public-worship exemption. See Gary Clair/Christ United Church v. Tracy
(Sept. 11, 1998), BTA No. 97-K-306; Northcoast Christian Ctr. v. Tracy (July 18,
1997), BTA No. 96-M-811; Jubilee Christian Fellowship, Inc. v. Tracy (May 17,
2002), BTA No. 99-R-239. AMP argues that denying the exemption in this case
necessarily contradicts the grant of exemption in those cases.     We disagree.
Although each of the BTA cases that AMP cites involved a religious congregation
leasing a building for use as a place of worship under leases that were
commercial, or presumed to be commercial, these cases are not dispositive of the
issue before us.
       {¶ 36} The issue of whether buildings devoted to public worship that are
subject to a commercial lease are tax exempt is not before us, and we do not
decide it. But the analysis differs in cases involving houses of public worship
because Gerke’s requirement that a privately owned schoolhouse be operated
“without any view to profit” does not apply to them. Unlike schoolhouses, houses
of worship, by their nature, are privately owned. Moreover, the 1851 Constitution
explicitly authorized an exemption for houses of worship, whereas it did not
authorize exemption of private schools unless they were “institutions of purely
public charity.”
       {¶ 37} Furthermore, the exemption for houses of public worship as
currently codified does not expressly prohibit a for-profit use of the building
devoted to worship. Although for more than a century this exemption and the
public-schoolhouse exemption were closely linked, that link was broken in 1988
with the enactment of Am.S.B. No. 71. 142 Ohio Laws, Part I, 147 (“S.B. 71”).
S.B. 71 separately codified them at R.C. 5709.07(A)(1) (exemption for public
schoolhouse) and at R.C. 5709.07(A)(2) (exemption for house of public worship).



                                       11
                              SUPREME COURT OF OHIO




The latter exemption now provides the exemption for “[h]ouses used exclusively
for public worship, the books and furniture in them, and the ground attached to
them that is not leased or otherwise used with a view to profit and that is
necessary for their proper occupancy, use, and enjoyment.” R.C. 5709.07(A)(2).
That wording unambiguously applies the not-for-profit limitation only to the
“ground attached” to the building, not to the building itself. It follows that any
limitations on the exemption for the building must relate to the requirement that it
be used exclusively for public worship.
                  The Tax Commissioner’s argument that Gerke
                   has been overruled is jurisdictionally barred
       {¶ 38} Departing from the          analysis   he employed       in his final
determination, the Tax Commissioner’s briefs in this court insist that our case law
holds that the public-schoolhouse exemption applies only when the property is
publicly owned, i.e., owned by the state or a political subdivision such as a school
district. As indicated in footnote three of this opinion, the cases cited by the Tax
Commissioner do not overrule Gerke. But we lack jurisdiction to address this
assertion as a ground for reversal, because the Tax Commissioner did not assign
any error in the notice of appeal in relation to this argument. See Fogg-Akron
Assoc., L.P. v. Summit Cty. Bd. of Revision, 124 Ohio St.3d 112, 2009-Ohio-6412,
919 N.E.2d 730, ¶ 12, citing Newman v. Levin, 120 Ohio St.3d 127, 2008-Ohio-
5202, 896 N.E.2d 995, ¶ 28.
                                   Conclusion
       {¶ 39} The BTA erred by granting a public-schoolhouse exemption for
property owned by a commercial landlord and leased to a community school
under a for-profit lease. We therefore reverse the decision of the BTA and
reinstate the Tax Commissioner’s denial of the exemption.
                                                                   Decision reversed.




                                          12
                                  January Term, 2010




       BROWN,     C.J.,   and     PFEIFER,     LUNDBERG   STRATTON,    O’CONNOR,
O’DONNELL, and CUPP, JJ., concur.
                                __________________
       LUNDBERG STRATTON, J., concurring.
       {¶ 40} Case law constrains me to concur in the majority’s holding, but I
write to express my concern that our holding places community schools in a
conundrum as to how to pay property taxes on leased property, because
community schools are funded by state funds but are prohibited by law from
using those funds to pay taxes.
       {¶ 41} Cincinnati College Preparatory Academy (“CCPA”) is a
community school as defined in R.C. Chapter 3314. Pursuant to R.C. Chapter
3314, community schools are public schools and are part of the state’s program of
education. R.C. 3314.01(B). Thus, community schools receive state funding.
See R.C. 3314.08. However, community schools cannot use state funds to pay
any taxes that they owe. R.C. 3314.082.
       {¶ 42} CCPA leased property to use for its schoolhouse pursuant to a
triple-net lease, which is standard practice for commercial properties and requires
the lessee to assume certain obligations pertaining to the leased property,
including utilities, maintenance, insurance, and taxes. See, e.g., AEI Net Lease
Income & Growth Fund v. Erie Cty. Bd. of Revision, 119 Ohio St.3d 563, 2008-
Ohio-5203, 895 N.E.2d 830, ¶ 6. Thus, CCPA was obligated by the lease to pay
any taxes due on the property.
       {¶ 43} Generally, R.C. 5709.07 exempts property from taxation that is
used for certain charitable activities, and in particular, subsection (A)(1) exempts
from taxation “public schoolhouses” and “the ground attached to them” as long as
the property is “not leased or otherwise used with a view to profit.” In my
opinion, it is the lessee’s use of the property that should determine whether the
property qualifies for a tax exemption under R.C. 5709.07(A)(1). For example, if



                                          13
                              SUPREME COURT OF OHIO




the lessee uses property for a public schoolhouse and has no view to profit in
doing so, the property should be exempt from taxation. However, as the majority
opinion makes clear, case law does not support my view and instead supports our
holding that a public schoolhouse is not exempt from taxation if the owner of the
property leases it with a view to profit.
       {¶ 44} My concern is that our holding creates a predicament for
community schools that lease the property and buildings that they use to operate
the schools.    Under our holding, lessors who lease property for use as a
schoolhouse will fail to qualify for an exemption under R.C. 5709.07(A)(1) when
the lessor leases the property with a view to profit. The property-tax obligation is
passed on to the community school pursuant to the triple-net lease. However,
community schools are prohibited by law from using state funds to pay these
taxes. In my opinion, disqualifying property from the schoolhouse exemption
when it is used for a public schoolhouse merely because the property’s lessor has
a view to profit seems to run contrary to the general intent within R.C. 5709.07,
and causes community schools that lease property to face a conundrum as to how
they will pay the real estate taxes.
       {¶ 45} Accordingly, although I concur in the holding in this case, I invite
the General Assembly to amend R.C. 5709.07(A)(1) if its members share my
concerns. The General Assembly created an exemption for buildings that are
“connected with” colleges, irrespective of whether the lessor leases buildings with
a view to profit. See Cleveland State Univ. v. Perk, (1971), 26 Ohio St.2d 1, 55
O.O.2d 1, 268 N.E.2d 577.              The General Assembly could amend R.C.
5709.07(A)(1) to achieve a similar result.
       {¶ 46} Accordingly, I concur.
                               __________________
       Eastman & Smith, Ltd., Graham A. Bluhm, M. Charles Collins, and Amy
J. Borman, for appellees.




                                            14
                              January Term, 2010




       Richard Cordray, Attorney General, and Lawrence D. Pratt, Barton A.
Hubbard, and Sophia Hussain, Assistant Attorneys General, for appellant.
                          ______________________




                                       15
