Beacon South Station Associates, LSE v. Board of Assessors of Boston (Lawyers Weekly No. 11-048-14)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us 13‑P‑739 Appeals Court BEACON SOUTH STATION ASSOCIATES, LSE[1] vs. BOARD OF ASSESSORS OF BOSTON. No. 13‑P‑739. Suffolk. February 12, 2014. ‑ May 14, 2014. Present: Kafker, Milkey, & Sullivan, JJ. Taxation, Abatement, Exemption, Leased property, Real estate tax: abatement, exemption. Massachusetts Bay Transportation Authority. Boston. Contract, Lease of real estate. Real Property, Lease. Appeal from a decision of the Appellate Tax Board. Anthony M. Ambriano for the defendant. Stephen H. Oleskey for the plaintiff. KAFKER, J. The principal issue in this case is whether certain real estate in Boston owned by the Massachusetts Bay Transportation Authority (MBTA) and leased to a private, for-profit entity was exempt from taxation pursuant to G. L. c. 161A, § 24, in fiscal years 2009 and 2010.[2] The property in question is the South Station Headhouse (Headhouse), which the MBTA leases to Beacon South Station Associates, LSE, also known as EOP-South Station, LLC (EOP). The Headhouse consists of an enclosed concourse through which the public passes to access MBTA and Amtrak train platforms, an underground subway connection, office and retail space, a surface facility and parking area, and the surrounding sidewalks. The real estate taxes assessed on the Headhouse were $ 1,439,974.76 in 2009, and $ 1,135,463.55 in 2010. EOP filed challenges to the 2009 and 2010 fiscal year assessments on the property with the board of assessors of Boston (assessors), and then appealed to the Appellate Tax Board (board) following the assessors’ refusal to abate the taxes. The board ruled that G. L. c. 161A, § 24, “expressly exempted the property of the MBTA from taxation, whether or not leased for business purposes,” and granted the abatements. The assessors appealed. On appeal, the assessors’ primary argument is that the board erred in its conclusion, and the § 24 exemption did not apply to the Headhouse at all because EOP, a private entity, leased the Headhouse from the MBTA and operated it for profit in the tax years in question. Alternatively, the assessors argue that even if the Headhouse was not subject to a blanket assessment for the years in question, EOP could be taxed on the tenant improvements made to the property because EOP owned these improvements according to the terms of the lease, and they were therefore not property of the MBTA. Examination of G. L. c. 161, § 24, as […]