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02-0699 Columbus Park Housing Corp. v. City of Kenosha (58191)

By: dmc-admin//November 25, 2002//

02-0699 Columbus Park Housing Corp. v. City of Kenosha (58191)

By: dmc-admin//November 25, 2002//

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“Thus, the proper inquiry is not whether an individual property shows a profit, but rather, it is whether the benevolent organization earns a profit from all of its leasehold property and fails to use the income for the specified exempt purposes. We therefore hold the preamble’s rent use condition requires an aggregate analysis of the tax-exempt entity’s use of its leasehold income. …

“Columbus Park leases all of its properties solely in furtherance of its exempted benevolent activities. Columbus Park endeavors to improve the living conditions of Kenosha’s poor and underprivileged by directly leasing the rehabilitated homes to its low-income tenants who otherwise could not afford decent housing. Despite the positive net income shown on four of its properties, Columbus Park does not earn a profit by leasing its properties overall and devotes all of its rental income to the maintenance and debt retirement of all the properties it leases. If the City wished to challenge this fact, it should have filed an affidavit refuting Columbus Park’s assertions. We therefore hold that Columbus Park has demonstrated that it satisfied the rent use element of the preamble to Wis. Stat. § 70.11.”

Further, even though the names on the leases are those of the tenants, not plaintiff corporation, we conclude that the corporation nevertheless qualifies for the exemption.

“Columbus Park’s tenants would not be able to rent the properties but for the Authority’s subsidies. Even though the name on the lease is that of the low-income tenant, to pretend that Columbus Park’s tenants are independent lessees ignores the role of the Authority in administering and subsidizing the tenants. … It would be an unreasonable construction of the term ‘lessee’ in the context of this statute to apply it to the very individuals who are the objects of the tax-exempt activity. Consequently, we conclude that the term ‘lessee’ should not be so technically defined so as to preclude the applicability of the tax exemption to Columbus Park. We therefore affirm the decision of the trial court and hold that Columbus Park is entitled to tax exemptions for the properties in question.”

Judgment affirmed.

Recommended for publication in the official reports.

Dist II, Kenosha County, Bastianelli, J., Brown, J.

Attorneys:

For Appellant: Robert I. DuMez, Kenosha

For Respondent: David L. Kinnamon, Milwaukee; Anthony A. Tomaselli, Madison; David C. Swanson, Milwaukee

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