Kinnear Rd. Redevelopment, L.L.C. v. Testa (Slip Opinion)
2017 Ohio 8816
| Ohio | 2017Background
- Kinnear Road Redevelopment owned a 2.39-acre industrially contaminated parcel; remediation and construction of apartment buildings were completed in 2012.
- On the January 1, 2012 tax-lien date the auditor assessed land at $478,000 and improvements at $0; on January 1, 2013 land was $874,000 and new buildings were $4,076,000.
- The Ohio EPA issued a covenant not to sue and certified the remediation to the tax commissioner under R.C. 3746.12; the certification triggered R.C. 5709.87 procedures for a brownfield tax exemption.
- The tax commissioner granted a ten-year exemption for the increase in land value ($396,000) but denied exemption for the newly constructed apartment buildings.
- The Board of Tax Appeals reversed, holding the statute’s plain language authorizes exemption of increases in assessed value of improvements that are situated on the remediated land when the commissioner’s order is issued. The Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (Kinnear) | Defendant's Argument (Testa) | Held |
|---|---|---|---|
| Whether R.C. 5709.87 exempts increases in value of improvements newly constructed after remediation | Exemption covers increases in assessed value of both land and improvements so long as the improvements are situated on the land when the commissioner’s order is issued | Statute should be read to exclude improvements added after remediation (after the prior tax-lien date) | Exemption applies to improvements present when the order issued, including those newly constructed after remediation; BTA decision affirmed |
| Whether exemption statute must be strictly construed against taxpayer | Kinnear: apply the unambiguous statutory text; no heightened strict-construction against exemption beyond statute | Testa: ambiguities should be resolved against taxpayer, and related statutes limit exemption | Court: statute is unambiguous; no special strict-construction against Kinnear; plain text controls |
| Whether an ‘‘increase in assessed value’’ exists for improvements that had $0 base value on prior lien date | Kinnear: a $0 assessed value is still a numeric base that can increase to a positive assessed value | Testa: newly created improvements cannot show an ‘‘increase’’ because they had no assessed value before | Court: the stipulated $0 base constitutes a numeric base; increase exists and may be exempted |
| Whether Testa may raise statutory-definition and certification-content limitations on appeal (waiver) | Kinnear: Testa failed to raise these arguments before the BTA and thus waived them | Testa: statutory criteria cannot be waived; issues can be raised here | Court: Testa waived several legal arguments by not presenting them to the BTA; waiver applies and those arguments are disregarded |
Key Cases Cited
- Navistar, Inc. v. Testa, 39 N.E.3d 509 (Ohio 2015) (court rejects undeveloped arguments lacking citation or analysis)
- Columbus City School Dist. Bd. of Edn. v. Wilkins, 802 N.E.2d 637 (Ohio 2004) (interpreting scope of R.C. 5709.87; does not address post-remediation new construction at issue here)
- Newfield Publications, Inc. v. Tracy, 718 N.E.2d 420 (Ohio 1999) (exemption statutes are read by their plain language and not given qualifications beyond those in the statute)
- The Chapel v. Testa, 950 N.E.2d 142 (Ohio 2011) (waiver applies when an argument was not raised before the BTA)
- Oak View Properties, L.L.C. v. Franklin Cty. Bd. of Revision, 58 N.E.3d 1133 (Ohio 2016) (same waiver principle)
- Krehnbrink v. Testa, 69 N.E.3d 656 (Ohio 2016) (taxpayers are charged with knowledge of law but not the commissioner’s litigation theory; omission can result in waiver)