| Congregation Rabbinical Coll. of Tartikov, Inc. v Town ofRamapo |
| 2010 NY Slip Op 03267 [72 AD3d 869] |
| April 20, 2010 |
| Appellate Division, Second Department |
| Congregation Rabbinical College of Tartikov, Inc.,Appellant, v Town of Ramapo et al., Respondents. |
—[*1] Michael L. Klein, Town Attorney, Suffern, N.Y. (Janice Gittelman of counsel), forrespondents.
In an action for a judgment declaring that the plaintiff's real property is exempt from realproperty taxation pursuant to Real Property Tax Law § 420-a (1) for tax years 2006, 2007,and 2008, the plaintiff appeals, as limited by its brief, from so much of a judgment of theSupreme Court, Rockland County (LaCava, J.), dated April 15, 2009, as, after a nonjury trial onsubmitted facts, declared that the defendants properly revoked the tax exemption of the plaintiff'sreal property pursuant to Real Property Tax Law § 420-a (1) for tax years 2006, 2007, and2008.
Ordered that the judgment is reversed insofar as appealed from, on the facts, with costs, andit is declared that the plaintiff's real property is exempt from real property taxation pursuant toReal Property Tax Law § 420-a (1) for tax years 2006, 2007, and 2008.
The plaintiff, a religious corporation, challenges the revocation by the Town of Ramapo ofits real estate tax exemption for land it licensed to a for-profit corporation to operate a religioussummer camp. The plaintiff charged that corporation a licensing fee in the sum of $60,000 to$70,000 per year, which the plaintiff used to finance plans for future construction of a religiouscollege on the site. Pursuant to an agreement between the plaintiff and the operator of the camp,the operator was required to maintain the facilities. The agreement stated that the plaintiff'spurpose in operating the camp on the site was "generating funds for its educational and religiouspurposes."
In the judgment appealed from, the Supreme Court, inter alia, determined that the plaintiffwas not entitled to a real estate tax exemption pursuant to Real Property Tax Law § 420-afor tax years 2006, 2007, and 2008, on the grounds that the property was used by a for-profitcorporation, the plaintiff's annual income from the property exceeded the carrying, maintenance,and depreciation charges of the property, and the plaintiff "did not use the real propertyexclusively for carrying out thereupon one or more of its religious purposes." We reverse thejudgment insofar as appealed from.
Real Property Tax Law § 420-a (1) (a) provides, in pertinent part, that:[*2]"Real property owned by a corporation or association organized orconducted exclusively for religious, charitable, hospital, educational, or moral or mentalimprovement of men, women or children purposes, or for two or more such purposes, and usedexclusively for carrying out thereupon one or more of such purposes either by the owningcorporation or association or by another such corporation or association as hereinafter providedshall be exempt from taxation as provided in this section."
The crucial issue in determining whether property is tax exempt pursuant to Real PropertyTax Law § 420-a (1) is whether the primary or principal use of the property is atax-exempt purpose of its owner. The fact that the property is leased or licensed to other parties,or the fact that the owner derives some profit from the use of the property, does not defeat a taxexemption pursuant to Real Property Tax Law § 420-a (1), so long as the primary orprincipal use of the property is for a tax-exempt purpose of its owner (see Matter of Lackawanna CommunityDev. Corp. v Krakowski, 12 NY3d 578 [2009]; Gospel Volunteers v Village ofSpeculator, 29 NY2d 622, 623-624 [1971]; Sephardic Congregation of S. Monsey v Town of Ramapo, 47 AD3d915, 917-918 [2008]; Matter of Scenic Hudson Land Trust v Sarvis, 234 AD2d 301,305 [1996]). "The question is how the property is used, not whether it is profitable" (Matter of Adult Home at Erie Sta., Inc. vAssessor & Bd. of Assessment Review of City of Middletown, 10 NY3d 205, 216[2008]). A tax-exempt property will generally retain its tax-exempt status even where anon-exempt, for-profit independent contractor conducts commercial operations on the property,so long as those operations are in furtherance of the property's tax-exempt purposes (seeMatter of Pace Coll. v Boyland, 4 NY2d 528 [1958]; Matter of Scenic Hudson LandTrust v Sarvis, 234 AD2d at 305; cf. Young Women's Christian Assn. v City of NewYork, 217 App Div 406 [1926], affd 245 NY 562 [1927]).
Here, the conclusion reached by the Supreme Court was not warranted by the facts. Thedefendants failed to meet their burden of proof for revocation of the tax exemption (seeMatter of Lackawanna Community Dev. Corp. v Krakowski, 12 NY3d at 581; Matter ofNew York Botanical Garden v Assessors of Town of Washington, 55 NY2d 328, 334; Otrada, Inc. v Assessor, Town ofRamapo, 41 AD3d 678, 680 [2007]) in that they failed to prove that the operation of thereligious summer camp was inconsistent with the plaintiff's intended principal use of theproperty as a religious college (see Matter of Scenic Hudson Land Trust v Sarvis, 234AD2d at 305). Specifically, the plaintiff was closely involved in the operation of the religioussummer camp, as evidenced by its approval of the camp's personnel, religious curriculum, andpurveyors of Kosher food. The operation of the religious summer camp was in furtherance of theprincipal use of the property for the plaintiff's corporate purposes, as expressly set forth inParagraph Second, subdivisions (c) and (d), of the plaintiff's Certificate of Incorporation (seeMatter of Pace Coll. v Boyland, 4 NY2d at 533-534; Gospel Volunteers v Village ofSpeculator, 29 NY2d at 623; Otrada, Inc. v Assessor, Town of Ramapo, 41 AD3d at680).
Accordingly, the Supreme Court incorrectly determined that the defendants properly revokedthe tax exemption of the plaintiff's real property pursuant to Real Property Tax Law §420-a (1) for tax years 2006, 2007, and 2008, and we declare that the real property is exemptunder that statute for those years. Dillon, J.P., Santucci, Balkin and Sgroi, JJ., concur. [PriorCase History: 23 Misc 3d 1117(A), 2009 NY Slip Op 50797(U).]