| Matter of Lackawanna Community Dev. Corp. v Krakowski |
| 2008 NY Slip Op 03739 [50 AD3d 1469] |
| April 25, 2008 |
| Appellate Division, Fourth Department |
| In the Matter of Lackawanna Community DevelopmentCorporation, Respondent, v Frank E. Krakowski, as Assessor of the City of Lackawanna, et al.,Appellants. |
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Appeal from an order of the Supreme Court, Erie County (Rose H. Sconiers, J.), enteredJanuary 16, 2007 in a proceeding pursuant to RPTL article 7. The order, inter alia, grantedpetitioner's motion for summary judgment.
It is hereby ordered that the order so appealed from is unanimously reversed on the lawwithout costs, the motion is denied, the cross motion is granted and the petition is dismissed.
Memorandum: Petitioner, a not-for-profit corporation, commenced this proceeding seekingreview of respondents' determination that, commencing with the 2006 tax year, petitioner'sproperty located in the City of Lackawanna (City) is not tax exempt pursuant to RPTL 420-a.Based on that determination, the property was placed on the City's real property tax rolls. It isundisputed that the property in question is improved by a building containing warehouse, officeand light manufacturing space and is leased by petitioner to a for-profit corporation that uses theproperty exclusively for its manufacturing business. We agree with respondents that SupremeCourt erred in granting petitioner's motion for summary judgment and instead should havegranted respondents' cross motion for summary judgment dismissing the petition on the groundthat the property in question is taxable.
Although pursuant to RPTL 420-a (1) (a) real property owned by a corporation organizedexclusively for charitable purposes is exempt from taxation if the property is "used exclusively"for such purposes, RPTL 420-a (2) expressly provides in relevant part that, "[i]f any portion ofsuch real property is not so used exclusively . . . but is leased or otherwise used forother purposes, such portion shall be subject to taxation and the remaining portion only shall beexempt . . . ." The issue in determining the taxable status of property is "whether thenature of its primary activities is consistent with an exempt purpose" (Matter of SyracuseUniv. v City of Syracuse, 92 AD2d 46, 50 [1983], lv dismissed 59 NY2d 668[1983]). Here, as noted, petitioner's for-profit [*2]tenant is usingthe property exclusively for manufacturing purposes, and that use is neither primarily consistentwith nor exclusively in furtherance of the corporate purpose for which petitioner was formed, i.e.,economic development in the City. Rather, the purpose of the manufacturing use is to generate aprofit for petitioner's tenant, and the property thus is not tax exempt (see RPTL 420-a [2];Matter of Genesee Hosp. v Wagner, 47 AD2d 37, 43-45 [1975], affd 39 NY2d863 [1976]; Matter of Ellis Hosp. v Assessor of City of Schenectady, 288 AD2d 581,582-583 [2001]).
We note in any event that it is immaterial whether the property is being used infurtherance of petitioner's corporate purpose, in view of the concession of petitioner that therental income received from the tenant far exceeds its carrying charges and maintenanceexpenses for the property (see RPTL 420-a [2]; see generally Sisters of St. Joseph vCity of New York, 49 NY2d 429 [1980]). Present—Martoche, J.P., Lunn, Fahey,Peradotto and Pine, JJ.