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Home My WebLink About124-90 RESOLUTIONRESOLUTION NO. 124-90 A RESOLUTION AUTHORIZING THE CITY ATTORNEY TO APPEAL THE CASE OF SUE PHILLIPS, ASSESSOR AND WASHINGTON COUNTY BOARD OF EQUALIZATION v. CITY OF FAYETTEVILLE AND THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ARKANSAS REGARDING AD VALOREM TAXES ON THE ART CENTER PROPERTY. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: t' Section 1. and directed to stating that exclusively for status for the attached hereto PASSED AND S":„ "CATTEST:sca ` 4 That the City Attorney is hereby authorized appeal the recent,decision.of Judge William Storey the Arts Center. 'property =would ' not be used public purposes, thereby denying the tax exempt Arts Center. A copy of the court's decision is "A" and made a. part hereof. marked Exhibit 1 4 ' APPROVED. this 7th day of A„,Gt , 1990. APPROVED: By: _ZZeedto-Pel, ea -a -4,y Mayor t:JUN 291990 CIRCUIT/CHANCERY COURT:1 LIAM A. STOREY Fourth Judicial Circuit c Judge Juvenile Division sup : 3 fle Division Washington and Madison Counties Courts Building • Fayetteville, Arkansas 72701 • 501-521-8400 Ext. 508 June 28; 1990 Ginger P. Crisp, EsqS. Associate General Counsel University of Arkansas -421 Ad inistrati.cn. Buildingr=A Fayetteville, AR 72701 Jerry E. Rose, Esq. Fayetteville City Attorney 113 West Mountain Street Fayetteville, AR 72701 George Butler, Esq. Washington County Attorney 207 E. Center Street Fayetteville, AR 72701 x Re:Sue Phillips, Assessor, et al. vs. City of Fayetteville, et al. Washington County Circuit No. CIV 89-1075 Dear Attorneys: - At the request of the parties, this case is submitted for decision on the stipulations of fact, exhibits, and briefs filed for record and appearing in the case file. I am advised by the parties that the matter is now ready for disposition. The primary issue before the court is whether the property, upon which the Walton Arts Center will be constructed is exempt from -ad vorum taxation in accordance with the provisions of Article XVI Sec. 5(b) of the Constitution of 1874. The exemption applies to property used "exclusively" for public purposes. As pointed out in the Defendants' excellent brief, two issues are disputed by the parties: one, whether the real estate EXHIBIT A r June 28, 1990 Page Two which has been purchased as the site for the Arts Center is being used for a public purpose during construction and, two, whether the Walton Arts Center willbe used exclusively for public purposes? The Supreme Court in Hilger v. Harding College, 231 Ark. 686 331 S.W. 2d 851 (1960), in Off -Street Parking Development District No. 1 v. City of Fayetteville, 284 Ark. 453, 683 S.W. 2d 229`"w(1985),'"anu ia':.: Car.li, Y -...ca Gv ,. .has made It .quite clear the property must "actually and directly and exclusively" be used for a public purpose to be entitled to an exemption from taxation. From an examination of the parties stipulation, more particularly the Affidavit of R. William Mitchell (Exhibit 7), many decisions relating to the use of and accessibility to the Center are yet to be made. It is also unclear whether the Center will in fact compete with similar facilities located in Northwest Arkansas. These are questions which, in my opinion, cannot be answered until such time as the facility is constructed and operating in accordance with yet to be determined policies. Therefore, I am in agreement with the Defendants' assertion to the effect that the issues relating to use of the facility are not ripe for decision by the court. As to the question relating to the tax-exempt status of the property prior to the opening of the Arts Center, a number of, cases are found touching on this issue. Although the contemplated use of the property by the entities seeking the exception is an important factor to be considered, it seems the actual ,type of use to which the property may ultimately be put, is _determinativeas to questions involving entitlement to an exemption. See Hudgins v. City of Hot Springs 168 Ark. 467, 270 S.W. 594 (1925), Foresee v. Board of Directors of Boraman Special School !District, 213 Ark. 567, 211 S.W. 2d 432 (1948). If the type of use contemplated by the entity seeking the exemption is exclusively public, as well as the actual character of the use to which the property can be put, the property will be entitled to tax-exempt status. Itappears the case before the court is distinguishable from Hudgins' and Foresee, supra. In those cases, the contemplated uses of the property as well as the actual use to which the property could be put, i.e., a city dump and school gymnasium, were clearly, by definition, public uses without any suggestion June 28, 1990 Page Three or possibility of non-public uses. Here, Defendants contemplate an exclusive public use of the facility when constructed, however', its actual use may not be exclusively public in nature. Simply stated, if a possibility exists that the .property can or will be used for non-public purposes and that issue is raised by the taxing authority, the exemption will not apply prospectively. Based on the foregoing, it is my opinion the Defendants, the _ City of Fayetteville and the Board of Trustees of the University -of..krkansas, who.seek the exemption for the property which is the site of the Walton 'Arts Center have failed to meet the strict burden of proof imposed upon entities seeking such exemptions. Accordingly, the property owned by the Defendants, more particularly described in Exhibit 1, of the parties' stipulations of fact, is subject to ad vorum taxation. I request that Mr. Butler prepare a precedent consistent with my ruling, submit same to Ms. Crisp and Mr. Rose for their approval, and to me for my signature. WAS:tst'. cc:Circuit Clerk County Clerk Yours s' erely, William A. Storey {y M IN THE CIRCUIT COURT OF WASHINGTON COUNTY, ARKANSAS . SUE PHILLIPS, ASSESSOR, AND WASHINGTON COUNTY BOARD OF EQUALIZATION VS. NO. CIV 89-1075 THE CITY OF FAYETTEVILLE, ARKANSAS, AND THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ARKANSAS _.<:- ORDtR On the 28th day of June, 1990, this matter P. co cnn PLAINTIFS` - C m c> -a o G,.. DEFENDANTS -I a Cc came on for con- sideration by the Court, the parties having submitted the matter for decision on the stipulations of fact, exhibits, and briefs filed for record and appearing in the case file, and the Court finds, for the reasons set out in its memorandum opinion dated June 28, 1990, and filed herein: 1. Property must be "actually and directly and exclusively" public purpose to be entitled to an exemption from used for a taxation. 2. The actual type of use to which property may ultimately be put is determinative as to questions involving entitlement to an exemption"during construction. If the type of use contemplated by the entity seeking the exemption is exclusively public, as well as the actual character of the use to which the property can be put, the property will be entitled to tax exempt status. 3. If.a possibilityexists that the property can or will be used for cion -public purposes and that issue is raised by the .r Phillips v. City of Fayetteville Order Page 2 taxing tively 4. authority, the tax exemption will not be applied prospec- du'ring construction of the facility. Issues relating to the use of the Walton Arts Center after construction are not ripe for decision by the court. 5. The defendants have failed to meet the strict burden of proof imposed,upon entities seeking an exemption from ad valorem taxation. IT IS THEREFORE ORDERED that the properties.on_whi:ch.the Walton Arts Center will be constructed, which is more particu- larly described in Exhibit i to the Complaint, be and hereby are subject to ad valorem taxation. ORDERED this g day of July, 1990 APPROVED: PL NTIFF' S?TTORN GEORGE E. BUTLER, JR. Washington County Attorney 207 E. Center Street Fayetteville, AR 72701 Judge Date 7 hfo Jury Thal Bench MA Non -Trial WILLIA. STO: EY CIRCUIT JUDGE DEFENDANTS' ATTORNEYS: JERfY_ E.IROSE Fayetteville City Attorney 113 West Mountain Street Fayetteville, AR 72701 GINGEE/ P. CRISP Associate General Counsel University of Arkansas 421 Administration Building Fayetteville, AR 72701