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14-P-283                                            Appeals Court

 RUSSELL BLOCK ASSOCIATES    vs.   BOARD OF ASSESSORS OF WORCESTER.


                            No. 14-P-283.

     Suffolk.     November 10, 2014. - September 16, 2015.

            Present:   Rubin, Brown, & Maldonado, JJ.


Taxation, Real estate tax: abatement, classification of
     property. Real Property, Tax.


    Appeal from a decision of the Appellate Tax Board.


     John F. O'Day, Jr., Assistant City Solicitor, for board of
assessors of Worcester.
     Daniel I. Cotton for the taxpayer.


    BROWN, J.   The board of assessors of Worcester (assessors)

challenges a decision of the Appellate Tax Board (board)

granting the taxpayer an abatement of the fiscal year (FY) 2012

tax on its parking garage.    The issue for consideration is

whether the board erred by finding and ruling that the subject

property was a multiple-use property appropriately classified as
                                                                    2


part residential and part commercial.1   See G. L. c. 59, § 2A(b).

We conclude that the board's classification determination was a

reasonable interpretation of the statutory language.

Accordingly, we affirm the decision of the board.

     1.   Facts.   We summarize the board's findings.2   In 1992,

the taxpayer, Russell Block Associates, constructed a twenty-

four story residential building (Tower) in the city of

Worcester.   The Tower development project was conditioned on the

construction of a parking garage.3   The five-story garage in

issue contains 300 parking spaces and is located across a small

side street from the Tower.    There are no dwelling units in the

garage.   By contract entitled "Agreement to Provide Parking

Spaces," the taxpayer agreed to reserve a minimum of one hundred

spaces and up to a maximum of 250 spaces for exclusive use by

the tenants of the Tower.


     1
       The assessors have not disputed either the board's
reduction of the property's fair cash valuation or the
percentage allocations of valuation assigned to each
classification.
     2
       The board based its findings of fact on the testimony and
the exhibits presented at the evidentiary hearing. None of the
evidence was provided to this court. In fact, the sole document
provided from the proceedings below was a copy of the board's
"Decision with Findings." We have confined our analysis to the
facts contained in that decision.
     3
       Sufficient off-street parking for the proposed use was
necessary to comply with city zoning requirements and to meet
financing requirements.
                                                                    3


     For the next nineteen years, the assessors classified the

garage as a mixed-use property, taxing a large percentage of its

value at the lower residential rate.4   In classifying the

property in this manner, the assessors followed the guidelines

issued by the Commissioner of Revenue (commissioner).5      See G. L.

c. 58, § 3; McNeill v. Assessors of W. Springfield, 396 Mass.

603, 606 (1986).   Beginning in FY 2012, however, the assessors

classified the property as entirely commercial.

     2.   Standard of review.   Our task is to embrace an

interpretation "consistent with the purpose of the statute and

in harmony with the statute as a whole."    Adams v. Assessors of

Westport, 76 Mass. App. Ct. 180, 183-184 (2010), quoting from

Sudbury v. Scott, 439 Mass. 288, 296 n.11 (2003).    We give a

measure of deference to the board's expertise in interpreting

the tax statutes it is charged with administering.   See French

v. Assessors of Boston, 383 Mass. 481, 482 (1981); Raytheon Co.

v. Commissioner of Rev., 455 Mass. 334, 337-338 (2009).



     4
       In 2010, for example, the taxpayer derived eighty-five
percent of its total income from the residential tenants of the
Tower. The board also found that at all material times, the
tenants occupied "significantly more than the minimum number of
spaces."
     5
       In FY 2011, the assessors, applying the commissioner's
three-digit coding system, classified part of the garage as code
106 (residential "accessory land with improvement - garage,
etc.") and part as code 336 (commercial parking garage).
                                                                      4


     3.    Discussion.   Classification determinations for taxation

purposes turn on the use of the real property.    See G. L. c. 59,

§ 2A(b).   The statute sets forth four distinct use classes:

residential, open space, commercial, and industrial.    The

statute also recognizes the existence of a fifth, mixed-use

category of real property, providing in pertinent part, "Where

real property is used or held for use for more than one purpose

and such uses result in different classifications, the assessors

shall allocate to each classification the percentage of the fair

cash valuation on the property devoted to each use according to

the guidelines promulgated by the commissioner."     G. L. c. 59,

§ 2A(b), as amended through St. 2008, c. 522, § 3.

     To start, we agree with the assessors that the doctrine of

estoppel has no application in the case.     See Cameron Painting,

Inc. v. University of Mass., 83 Mass. 345, 350 (2013).     Turning

to the merits, the primary question in dispute is whether the

garage qualified in part for residential classification.      See

G. L. c. 59, § 2A(b).6    The assessors first contend that the

parking garage is not "used or held for human habitation


     6
       General Laws c. 59, § 2A(b), provides, in relevant part,
"The assessors . . . shall classify such real property according
to the following uses: - 'Class one, residential', property
used or held for human habitation containing one or more
dwelling units . . . . Such property includes accessory land,
buildings or improvements incidental to such habitation and used
exclusively by the residents of the property or their guests
. . . ."
                                                                        5


containing one or more dwelling units," G. L. c. 59, § 2A(b),

see note 6, supra, and thus cannot satisfy the definitional

requirements of § 2A(b).     We disagree.   This argument ignores

the second sentence of the definition, providing that "accessory

land, buildings or improvements incidental to such habitation"

are included in the definition of residential property.      G. L.

c. 59, § 2A(b).   See McNeill v. Assessors of W. Springfield, 396

Mass. at 606 (describing the statutory definition of residential

property as "extremely broad and general").      Compare Salem &

Beverly Water Supply Bd. v. Assessors of Danvers, 63 Mass. App.

Ct. 222, 222-224, 226-227 (2005) (reservoir and surrounding

watershed land did not fit within the definition of accessory

residential property).

    Applying the statutory language to the facts of the case,

the board concluded that for the tax year in question, eighty-

five percent of the garage served an "accessory" use for the

residential tenants of the Tower.    The assessors, we think,

cannot show that the conclusion was erroneous.      The parking

garage was part and parcel of the Tower development plan.         The

residents of the Tower, as all city dwellers, need a place to

park their vehicles.     The garage was designed and built to serve

the tenants' parking needs and indeed was required to do so to

meet zoning and lending requirements for the development of the

Tower.   On these facts, the board was warranted in concluding
                                                                     6


that the garage was an accessory building "incidental to . . .

habitation" within the meaning of the statute.    Cf. St. Paul's

Sch. v. Concord, 117 N.H. 243, 257 (1977) (applying analogous

New Hampshire tax exemption for schools) ("The tax status of

. . . parking lots should be determined according to the status

of the buildings which they serve.   Where a building is

partially taxed, or where one or more buildings served are

taxed, a proportionate value of the parking lot should also be

taxed"), quoted with approval in Lynn Hosp. v. Assessors of

Lynn, 383 Mass. 14, 19 (1981).    Compare also in the zoning

context Henry v. Board of Appeals of Dunstable, 418 Mass. 841,

844 (1994), quoting from 6 Rohan, Zoning and Land Use Controls

§ 40A.01, at 40A-3 (1994) (for zoning purposes, "[a]n accessory

or 'incidental' use is permitted as 'necessary, expected or

convenient in conjunction with the principal use of the land'").

    The second, more difficult question raised by the assessors

is whether the property satisfies the exclusive use requirement

of the definition in § 2A(b):    "Such property includes accessory

land, buildings or improvements incidental to such habitation

and used exclusively by the residents of the property or their

guests" (emphasis supplied).    G. L. c. 59, § 2A(b).   The

assessors contend that where, as here, the entire garage was not

used exclusively by the tenants of the Tower or their guests, it

did not qualify for residential status.
                                                                   7


     Although the plain text may be construed in the manner

suggested by the assessors, the phrase "used exclusively" is not

defined by statute,7 and in the context of a multiple-use

property, the statutory language in issue is amenable to a

second interpretation.   As noted above, after setting out the

four distinct classes based on use, § 2A(b) recognizes the

existence of a fifth, mixed-use category.   That is, the

Legislature recognized that a single property may be used for

more than one purpose and that such uses result in different

classifications.8   The garage, as the board justifiably found,



     7
       By way of contrast, until June 15, 1988, Florida statutory
law defined "exclusive use of property" for tax exemption
purposes to mean "used one hundred percent for exempt purposes";
thereafter, the definition was amended to mean "use of property
solely for exempt purposes." See Fla. Stat. § 196.012(2); Saint
Andrew's Sch. of Boca Raton, Inc. v. Walker, 540 So.2d 207, 207-
209 (Fla.Dist.Ct.App. 1989) (holding that notwithstanding its
residential quality, faculty housing was used exclusively for
educational purposes and entitled to exemption).
     8
       The Legislature expressly directed local assessors making
mixed-use classification determinations to follow the
commissioner's guidelines. G. L. c. 59, § 2A(b). As the board
noted in support of its decision, the commissioner's coding
system contains codes for multiple-use properties, including
code 013 for "Multiple-use, primarily Residential" property.
See Department of Revenue's Division of Local Services Property
Type Classification Codes (revised March, 2012), at 3. The
example given by the commissioner of a code 013 property is "a
building with a retail store on the first floor, apartments on
the upper floors, and a major portion of the related land . . .
reserved for tenant parking." The high-rise residential Tower,
which we are informed has (1) commercial business on the first
floor and (2) a dedicated parking garage, a major portion of
which is reserved and, as the board found, actually used for
                                                                    8


was one of them.    Reading § 2A(b) as a harmonious whole, as we

are required to do, the exclusive use language is appropriately

read in this context as referring to that portion of the

property used exclusively for residential accessory purposes.

Any ambiguities that exist must be resolved in favor of the

taxpayer.   See Adams v. Assessors of Westport, 76 Mass. App. Ct.

at 184.

    The use of the property is the critical criterion for

classification purposes.    Adopting the interpretation urged by

the assessors would require us to disregard the use restriction

on the garage, the statute's provision for mixed-use

classifications, and the commissioner's guidelines, which were

followed by the assessors for nineteen years.    We prefer an

interpretation that is "the most reasonable and sensible in the

circumstances."    Bridgewater State Univ. Foundation v. Assessors

of Bridgewater, 463 Mass. 154, 160-161 (2012) (rejecting literal

interpretation that would lead to absurd or unreasonable

consequences).    See Adult Home at Erie Station, Inc. v. Assessor

& Bd. of Assessment Review of Middleton, 10 N.Y.3d 205, 214

(2008) (word "exclusively" for tax exemption purposes should not

be read literally, but rather means principally or primarily).

Contrast Sisterhood of Holy Nativity v. Tax Assessors of


residential tenant parking, could be found to fall within this
code. See note 4, supra.
                                                                   9


Newport, 73 R.I. 445, 447-448 (1948) (building must be used

exclusively for religious purposes to entitle owner to

exemption; primary use is not sufficient).

    We agree with the assessors that in the sense of being

operated for profit the parking garage is strictly commercial.

However, their argument that the taxpayer's prospective customer

base was not relevant to the use inquiry is mistaken.    In Lynn

Hosp. v. Assessors of Lynn, 383 Mass. at 15-16, the facts

established that the adjacent parking garage owned by the

hospital, a charitable organization granted tax-exempt status

under G. L. c. 59, § 5, Third, was used not only by parkers on

their way to the hospital (an exempt use), but also by parkers

going to a nonexempt private medical building as well as by the

general public.   The Supreme Judicial Court held that the

taxpayer was entitled to a partial exemption for the percentage

of the parking garage actually used for exempt purposes.     Id. at

17-19.   Compare Vassar Bros. Hosp. v. Poughkeepsie, 97 A.D.3d

756, 759 (N.Y.App.Div. 2012) (law provided exempt property must

be "used exclusively" for exempt purposes; as only portion of

garage was allocated for use reasonably incidental to purpose of

hospital, parking garage was partially exempt).

    The Lynn Hospital case falls within a long line of cases

supporting, notwithstanding the absence of express statutory

authority, the practice of carving out, based on actual use,
                                                                   10


portions of real property for partial exemption and partial

taxation.   See Milton Hosp. & Convalescent Home v. Assessors of

Milton, 360 Mass. 63, 70 (1971), and cases cited; WB&T Mort. Co.

v. Assessors of Boston, 451 Mass. 716, 717-718, 724-725 (2008);

Mount Auburn Hosp. v. Assessors of Watertown, 55 Mass. App. Ct.

611, 613, 620 (2002).   Although the Lynn Hospital case arose

under a different tax statute, the facts of that case support

the board's application of the apportionment principle by

analogy.

    In sum, the board was warranted in classifying the parking

garage as a multiple-use property subject to taxation under the

allocation method specified by § 2A(b).   The decision of the

Appellate Tax Board is affirmed.

                                    So ordered.
    RUBIN, J. (dissenting).    The statute in this case is

unambiguous, and because it is a fundamental rule of statutory

construction in our Commonwealth that the words of an

unambiguous statute should be interpreted according to their

plain meaning, I respectfully dissent.   See Bridgewater State

Univ. Foundation v. Assessors of Bridgewater, 463 Mass. 154, 158

(2012).

    The words used by the Legislature in the definition of

"residential" property set out in G. L. c. 59, § 2A(b), as

amended through St. 2008, c. 522, § 3, are clear.   "Class one,

residential" property status is limited to "property used or

held for human habitation containing one or more dwelling units

. . . .   Such property includes accessory land, buildings or

improvements incidental to such habitation and used exclusively

by the residents of the property or their guests. . . ."

(Emphasis added.)   The garage here of course is not used for

human habitation, but is an "accessory . . . building[]"; the

board's findings establish, and it is conceded by the taxpayer,

that it has never been used exclusively by the Tower residents

and their guests.   Therefore, the garage is not residential

property within the meaning of the statute.

    In an attempt to get around this, the court majority

argues, at least at first, that the statute is ambiguous, and

that the exclusive use language can refer in this context "to
                                                                        2


that portion of the property used exclusively for residential

accessory purposes."     Ante at        .   But the statutory

language is clear.     The garage is an accessory building, and an

"accessory . . . building[]" must be "used exclusively" by the

residents or guests of the residential property to which it is

an accessory to be entitled to classification as residential

property.   To say that only a portion of the building must be

"used exclusively" by residents or guests is not to construe an

ambiguous clause about exclusive use.       It is to read it out of

the statute.

    To be sure, the statute also contains a "mixed use"

provision that states, "Where real property is used or held for

use for more than one purpose and such uses result in different

classifications, the assessors shall allocate to each

classification the percentage of the fair cash valuation of the

property devoted to each use according to the guidelines

promulgated by the commissioner" (emphasis added).       G. L.

c. 59, § 2A(b).   But in this case the use of a part of the

garage for residents of the Tower does not result in a

"different classification[]" of that portion of the garage from

the commercial classification of the rest of the garage.         None

of the garage is residential property because the garage is

neither used for human habitation nor is it used exclusively by

residents of the Tower or its guests.       Rather, the entire garage
                                                                    3


-- the parts used by Tower residents and the parts available to

the public -- is all properly classified as "'Class three,

commercial', property used or held for use for business purposes

and not specifically includible in another class . . . ."     G. L.

c. 59, § 2A(b).   The majority would rely on Lynn Hosp. v.

Assessors of Lynn, 383 Mass. 14, 17-19 (1981), in support of a

mixed-use classification, but that case holds only that under a

different statute that does not contain an "exclusive use"

provision, that portion of a garage owned by a hospital and

which it used itself can be exempt from taxation even though

another portion is not.   It has no bearing on the issue in this

case.

    Of course there are debates about the proper way to

construe statutes.   Indeed, there is some indication that

questions concerning the proper canons of statutory construction

are becoming more pronounced in our legal culture. Compare,

e.g., King v. Burwell, 135 S.Ct. 2480, 2495 (2015)

("Petitioners' arguments about the plain meaning of [the

Affordable Care Act] are strong.   But while the meaning of the

phrase [relied upon by Petitioners] may seem plain 'when viewed

in isolation,' such a reading turns out to be 'untenable in

light of [the statute] as a whole.' . . .   In this instance, the

context and structure of the Act compel us to depart from what

would otherwise be the most natural reading of the pertinent
                                                                  4


statutory phrase"), with id. at 2497 (Scalia, J., dissenting)

("Let us not forget . . . why context matters:   It is a tool for

understanding the terms of the law, not an excuse for rewriting

them").

    This debate may in part be reflected here:   The court

majority begins by saying the statute is ambiguous, but then,

perhaps a bit more candidly, it acknowledges that it is not

reading the statute "literally."   Rather, it says that it is

construing it in the way that is "the most reasonable and

sensible in the circumstances."    Ante at       , quoting from

Bridgewater State Univ. Foundation v. Assessors of Bridgewater,

463 Mass. 154, 160-161 (2012).

    But the Supreme Judicial Court has instructed that

statutory language that is clear and unambiguous is conclusive

as to legislative intent, see Commissioner of Correction v.

Superior Ct. Dept. of the Trial Ct., 446 Mass. 123, 124 (2006),

and that this rule "has particular force in interpreting tax

statutes."   Gillette Co. v. Commissioner of Revenue, 425 Mass.

670, 674 (1997), quoting from Commissioner of Revenue v.

AMIWoodbroke, Inc., 418 Mass. 92, 94 (1994).   We are bound to

apply these rules.   Is the clear construction of the statute I

put forth "absurd or unreasonable" such that it may be ignored

under the Supreme Judicial Court's decision in Bridgewater State

Univ. Foundation v. Assessors of Bridgewater, 463 Mass. at 158?
                                                                      5


I am not persuaded.   In fact, I don't see how one can even make

the case.   Taxing a garage used by residents of a building

across the street as "commercial" property rather than taxing a

portion of it as "residential" property obviously isn't

"absurd," and I can't see how a choice either way could be

called "unreasonable."   These are context-specific lines created

in order to balance all the various interests that go into

providing property with tax classifications.    They are

archetypical decisions of legislatures that, when expressed

clearly, should not -- really cannot -- be subject to judicial

second guessing.

    Do I think it is utterly unfair that the board of assessors

of Worcester taxed this garage at a mixed-use rate for some

twenty years, then changed its mind and upended the taxpayer's

reasonable expectations?   You bet.   But as the court majority

correctly notes, ante at         , under settled law, the city

cannot be estopped by its prior action.

    So that leaves me where I began:      with a clear statute that

requires reversal of the Appellate Tax Board decision.     With

respect, I dissent.
