442 Mass. 812 | Mass. | 2004
This case raises an issue of first impression: whether G. L. c. 121A contains an implicit cap on the amount developers must pay a city or town in lieu of taxes pursuant to their urban redevelopment contracts. We granted the plaintiffs’ application for direct appellate review to consider whether a Superior Court judge erred in granting summary judgment to the defendants, holding that the plaintiffs are bound by their contracts created under G. L. c. 121A, § 6A, even though they are paying more than they would if they were not exempted from property taxes assessed pursuant to G. L. c. 59.
Facts and Procedural Background.
We begin by briefly discussing the general statutory scheme of G. L. c. 121A. Designed to eliminate conditions that cannot be alleviated by the ordinary operation of the real estate market, G. L. c. 121A encourages private developers to foster urban redevelopment projects. G. L. c. 121A, § 2. A developer initiates and designs the project before applying for approval from the appropriate government agencies. G. L. c. 121A, §§ 5, 6. Under G. L. c. 121A, § 10, a developer is exempt from ordinary real estate and property taxes under G. L. c. 59, but instead pays a statutory excise. Pursuant to G. L. c. 121A, § 6A, the developer of a redevelopment project must enter into a written contract with the city or town, agreeing to be bound by the provisions of the statute. Additionally, § 6A allows for a
There are no material facts in dispute. We take our facts from the judge’s memorandum of decision, supplemented by undisputed facts in the record. The plaintiffs, Anderson Street Associates (Anderson) and Marcus Garvey Apartments (Garvey), are owners of low-to-moderate income housing developments governed by G. L. c. 121A. The defendants are the city of Boston (city) and the Boston Redevelopment Authority (authority), a public body originally organized under G. L. c. 121, § 26QQ, a precursor statute to G. L. c. 121B, § 4, and an “urban renewal agency” pursuant to G. L. c. 121B, § 46.
In March, 1978, pursuant to G. L. c. 121A, § 6A, Anderson entered into a written contract with the city, agreeing to be bound by the provisions of G. L. c. 121A. Garvey entered into a similar written contract in July, 1979. The contracts, which by the plaintiffs’ choice have forty-year terms, obligate the plaintiffs to carry out the projects in accordance with the statute, the terms required by the city, and the regulatory agreements into which they entered under G. L. c. 121 A, § 18C. The contracts require the plaintiffs to pay the Commonwealth an “urban redevelopment excise tax” mandated by a formula in G. L. c. 121A, § 10.
However, at some point following the enactment of Proposition 2Va in 1980 (G. L. c. 59, § 21C, inserted by St. 1980, c. 580, § 1), which limited property tax increases to two and one-half per cent of the previous year’s tax revenue based on full and fair cash value, the plaintiffs’ G. L. c. 121A payments exceeded the payments required under G. L. c. 59.
In April, 1999, Anderson and Garvey filed virtually identical complaints against the city and the authority, asserting claims based on common-law principles, public policy and constitutional violations, and requesting declarations that the G. L. c. 121A contracts were unenforceable both prospectively and
Discussion.
1. Standard of review. “The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991), citing Mass. R. Civ. P. 56 (c), 365 Mass. 824 (1974). “An order granting or denying summary judgment will be upheld if the trial judge ruled on undisputed material facts and his ruling was correct as a matter of law.” Commonwealth v. One 1987 Mercury Cougar Auto., 413 Mass. 534, 536 (1992), citing Community Nat’l Bank v. Dawes, 369 Mass. 550, 556 (1976). Because we conclude that the motion judge’s rulings on undisputed material facts were correct as a matter of law, we affirm the judgments of the Superior Court.
2. Interpretation of G. L. c. 121 A. “[T]he primary source of the insight into the intent of the Legislature is the language of the statute.” International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 853 (1983). “Where the language of a statute is plain, it must be interpreted in accordance with the usual and natural meaning of the words.” Gurley v. Commonwealth, 363 Mass. 595, 598 (1973). Accord ROPT Ltd. Partnership v. Katin, 431 Mass. 601, 603 (2000); Weitzel v. Travelers Ins. Cos., 417 Mass. 149, 153 (1994); Commonwealth v. One 1987 Mercury Cougar Auto., supra at 537. Absent a clear indication to the contrary, statutory language is to be given its “ordinary lexical meaning.” Surrey v. Lumbermens Mut. Cas. Co., 384 Mass. 171, 176 (1981). “While a court must normally follow the plain language of a statute, it need not adhere strictly to the statutory words if to do so would lead to an absurd result or contravene the clear intent of the Legislature.” Commonwealth v. Rahim, 441 Mass. 273, 278 (2004). Contrary to the plaintiffs’ argument, the result in this case is far from “absurd.”
General Laws c. 121A, § 10, provides in relevant part that
To interpret G. L. c. 121A to include a cap on the amount developers must pay would require this court to read words into the statute that are not there.
Similarly, in G. L. c. 121A, § 15, the Legislature required ad
Although our previous cases state that tax concessions were envisioned, it is undisputed that the plaintiffs received such tax concessions after signing the agreements. The fact that the concessions did not continue for the entire term of these contracts does not violate them.
Moreover, the plaintiffs’ contracts under § 6A are unambiguous and must be enforced in accordance with their plain terms. Freelander v. G. & K. Realty Corp., 357 Mass. 512, 515-516 (1970). The terms of the contracts are clear in that they require annual payments based on specific and straightforward formulas under § 10 and the additional monies the plaintiffs contracted to pay under § 6A. There is no basis for arguing that the clear contractual terms of the contracts cannot be enforced. See Opinion of the Justices, 341 Mass. 760, 787 (1960) (because additional payments under § 6A are obtained by contract, anyone undertaking project has “no ground for complaint”). In negotiating their contracts, the plaintiffs could have insisted on a provision assuring that their payments under the contract would never exceed local property taxes. They did not do so and cannot now attempt to insert or imply such a provision.
Although the calculations of the plaintiffs’ payments have
The plaintiffs argue that our interpretation of G. L. c. 121A will deter developers from entering into urban redevelopment contracts with municipalities. However, this argument is without merit, as any new project will involve its own negotiation and the municipality will need to offer a deal that provides sufficient incentive to the potential developer. Thus, any contract created pursuant to § 6A will reflect a deal beneficial to the public and the developer. If the § 10 formula has become onerous because of the passage of Proposition 2lli, it is the responsibility of the Legislature to address the issue, not the court. Moreover, we disagree with the notion that holding parties to their contracts violates public policy, particularly in this case where the plaintiffs will own the projects debt-free in fifteen years.
3. Common-law contract theories. The plaintiffs assert that the judge also erred in granting summary judgment in favor of the defendants on the plaintiffs’ common-law contract claims. There was no error because the common-law claims are based on the assumption that the Legislature clearly intended G. L. c. 121A to provide tax benefits throughout the forty-year commitment.
In any event, our previous cases have upheld the constitutionality of the G. L. c. 121A payments on the ground that the public interest served by urban redevelopment justifies the separate classification and treatment for tax purposes. Dodge v. Prudential Ins. Co., 343 Mass. 375, 383-384 (1961); Opinion of the Justices, supra at 778; Opinion of the Justices, 334 Mass. 760, 763 (1956). There has been no material change to the statute itself that requires us to take a second look at its constitutionality. We agree with the motion judge that the fact that the G. L. c. 121A tax concessions ultimately were not advantageous for the entire term of the contract does not make the taxation scheme unconstitutional.
The plaintiffs further argue that the city’s failure to renegotiate with them violates their right to equal protection because the city has renegotiated with other G. L. c. 121A developers.
Equal protection claims will succeed only if the decision to treat the plaintiffs differently from those similarly situated is wholly “arbitrary or irrational.” Wojcik v. Massachusetts State Lottery Comm’n, 300 F.3d 92, 104 (1st Cir. 2002), quoting Maine Cent. R.R. v. Brotherhood Maintenance of Way Employees, 813 F.2d 484, 492 (1st Cir.), cert. denied, 484 U.S. 825 (1987). The plaintiffs failed to put forth any specific facts to support the assertion that they were similarly situated to the other G. L. c. 121A developers that renegotiated their contracts with the defendants or that the renegotiations were arbitrary. In fact, the evidence indicates that the defendants renegotiated with developers based on their projects’ needs. Indeed, despite being questioned repeatedly at oral argument, the plaintiffs were unable to articulate a specific hardship the project would suffer if their contracts were not modified. Thus, the plaintiffs’ equal protection claims cannot succeed.
Conclusion.
For the reasons set forth above, we conclude that G. L. c. 121A does not include a cap on payments requiring that the tax burden under G. L. c. 121A, §§ 6A and 10, must always be less than or equal to taxation amounts otherwise required under G. L. c. 59.
Judgments affirmed.
We acknowledge the amicus brief submitted by the Massachusetts Affordable Housing Alliance.
The excise imposed by G. L. c. 121A, § 10, is the sum of an amount equal to five per cent of the corporations’ gross income from all sources and an amount equal to ten dollars per thousand on the fair market value of the property as determined on January 1 of the year in which the excise becomes payable.
The Anderson percentages are now twenty-three per cent of the gross market rate residential collections, twenty-five per cent of the gross commercial rent collections, and a percentage of the subsidized residential rents calculated on a described tax-based analysis, not to exceed twenty per cent of the gross subsidized rent collections (including both tenant and subsidy payments), or thirteen per cent of such collections if the United States Depart
The Garvey percentages are now thirty per cent of the gross commercial income and a percentage of the residential rents calculated on a described tax-based analysis, not to exceed fifteen per cent of the gross subsidized rent collections (including both tenant and subsidy payments), or twelve per cent of such collections if HUD does not approve a greater payment in certain circumstances.
The plaintiffs provided data only for the years 1997 through 2001, and it is not clear whether the plaintiffs’ G. L. c. 121A payments exceeded tax payments in earlier years.
We acknowledge, but need not discuss, all of the plaintiffs’ arguments. Moreover, we do not address arguments made without citation to authority. Zora v. State Ethics Comm’n, 415 Mass 640, 642 n.3 (1993), and cases cited.
The plaintiffs’ argument that the statement “in lieu of taxes” is a term of art that means less than or equal to actual taxes is without merit. The statutes and case relied on by the plaintiffs do not support this argument. Moreover, we were unable to find any authority to support this argument. Rather, every statute or case mentioning this phrase or terminology either explicitly stated in a definition that payments in Ueu of taxes must not exceed regular tax payments or was silent on the issue. Neither § 1 nor § 6A of G. L. c. 121A defines “in lieu of taxes,” and the statute is otherwise silent as to its meaning.
General Laws c. 121C, § 9, was inserted by St. 1972, c. 725. The Legislature amended G. L. c. 121A, § 10, numerous times between 1975 and 1978. We must presume that the Legislature was aware of pre-existing law, Prudential Ins. Co. v. Boston, 369 Mass. 542, 546 (1976), including G. L.
General Laws c. 121 A, § 15, provides in relevant part:
“Should the gross receipts . . . exceed [various expenses,] the amount remaining shall be applied to the payment to the city ... of the amount, if any, by which the taxes would have been assessed upon the real estate and tangible personal property of the corporation in such year if [they] had not been exempt from taxation, exceeded the excise paid by such corporation and distributed to [the] city... in such year under [G. L. c. 121A, § 10].”
The plaintiffs conceded at oral argument that the additional payments in lieu of taxes to which they agreed pursuant to G. L. c. 121A, § 6A, are the real issue, not the formula under G. L. c. 121A, § 10.
“[F]or the purpose of equal protection analysis, [the] standard of review under the cognate provisions of the Massachusetts [Constitution] is the same as under the Fourteenth Amendment to the Federal Constitution.” Opinion of the Justices, 408 Mass. 1215, 1223 (1990), quoting Dickerson v. Attorney Gen., 396 Mass. 740, 743 (1986).