Justice Carol Hunstein (John Disney / ALM )
The Georgia Supreme Court has reversed a trial judge and another appellate court over whether an upscale assisted living and continuing care development for seniors should qualify as public property in order to avoid taxes.
The high court said no Monday.
Justice Carol Hunstein wrote a unanimous opinion saying the fact that Spring Harbor at Green Island benefited from a $75 million Medical Center Hospital Authority construction bond issue does not automatically make it exempt from property taxes.
“The question of whether a hospital authority’s property interest qualifies for ad valorem tax exemption as ‘public property’ is a separate and distinct question from the issues presented in a bond validation proceeding,” Hunstein wrote. The relevant question, she said, is whether the lease interest is “in furtherance of the legitimate functions of the hospital authority” rather than for “private gain or income.”
The high court reversed the Muscogee County Superior Court and the Georgia Court of Appeals and sent the case back for further proceedings, changing the outcome of a decade-old dispute. The Hospital Authority sued the Columbus Board of Tax Assessors, the City of Columbus and the tax commissioner for Muscogee County in May 2007, seeking a declaration that its interest in Spring Harbor under a $10, 40-year lease was not subject to ad valorem property taxation. The hospital authority contended its interest was “public property,” that the use and income from the interest furthered its legitimate functions as a hospital authority.
The Hospital Authority won the point in superior court. The Court of Appeals affirmed the lower court’s ruling, finding that it was bound by the earlier superior court bond validation orders. The Board of Tax Assessors then appealed to the Georgia Supreme Court, which agreed to review the case to determine whether the Court of Appeals was wrong in determining that the bond validation orders conclusively determined that the property is tax exempt.
“The bond validation proceedings did not conclusively establish whether the leasehold interest of the Hospital Authority is ‘public property’ for tax purposes, and the superior court below should have drawn its own conclusions about taxability,” Hunstein wrote.
The tax assessors’ winning legal team includes: Charles Palmer and Kevin Meeks of Troutman Sanders, and Robert Lomax of Columbus.
The hospital authority legal team includes: Jerome Rothschild and Andrew Rothschild of Rothschild & Rothschild in Columbus; J. Randolph Evans and Keshia Lipscomb of Dentons; and Scott Crowley of Columbus.
The case is Columbus Board of Tax Assessors v. Medical Center, No. S17G0091.