MATTER OF GREENTREE FOUNDATION v. ASSESSOR OF NASSAU COUNTY

Wednesday, February 6, 2002

Supreme Court

Nassau County

Justice Warshawsky

MATTER OF GREENTREE FOUNDATION v. ASSESSOR OF NASSAU COUNTY ” This proceeding is brought pursuant to Article 78 of the CPLR to challenge a determination by the Assessor and Board of Assessors of the County of Nassau that petitioner does not use its real property exclusively for the exempt purposes for which the organization is founded and therefore is not entitled to real property tax exemption. Petitioner seeks a declaration that it be granted exemption from real property taxes for the year 2001/2002 and a refund of taxes paid for that period, together with interest.

The Greentree Foundation, according to its charter, is a charitable organization formed, inter alia, to disperse monies to charitable, religious, educational, scientific organizations or organizations designed to prevent cruelty to children or animals, or to use its funds for the active conduct of such activities by other organizations. It was incorporated in 1982 under Article 402 of the Not For Profit Corporation Law and in October of 1998 it took title to the 420 acre parcel of land in Manhasset which is the subject of this lawsuit (The Property). The Property, which was the home of Mr. and Mrs. John Hay Whitney, is improved with a main house consisting of 60 rooms, 9 various ancillary houses, gardens, garages, a facility for playing court tennis, an old diary farm and has 300 unimproved acres.

The Foundation avers that it uses the 420 acre property for meetings, seminars and research encompassing programs designed to promote global peace, human rights and “the improvement of civil society.” The Foundation represents that it also uses the Property for more community based programs run by the Long Island Community Foundation, The Long Island Council of Churches, the Unitarian Universalists Church, certain police departments, the Long Island Funders, Manhasset High School, and the US Court Tennis Preservation Foundation and the Youth Foundation of New York Junior Tennis Foundation. Finally, the Foundation boasts ownership of a fine art collection and the archival papers of John Hay Whitney.

There is no evidence that any member, trustee or director or founder or officer of the Foundation profits or benefits in a pecuniary sense from the assets held and distributed by the Foundation.

Respondent denied petitioners application for real property tax exemption on the grounds that the application did not meet all the requirements of Real Property Tax Law ?§420-a. The issue to be determined by this court is whether the decision to deny tax exempt status for the real property is arbitrary and capricious or whether it is supported by substantial evidence in the record. Matter of Pell v. Board of Education, 34 N.Y.2d 222 (1974). The decision must be examined for a rational basis and the court must not substitute its judgment for that of respondents. More specifically, this court must determine whether respondent properly found that the Property is not used to carry out, exclusively, either religious, charitable, hospital, educational or activities for the moral or mental improvement of mankind.

Exemption from real property taxation is governed by section 420-a of the Real Property Tax Law. Of the three pronged test usually applied in real property exemption cases, only the second is contested; Greentree plainly is an organization founded for charitable purposes and there is no evidence that it is a pretense for a not-for-profit corporation or that members of the Foundation personally derive pecuniary benefit from its operation. Remaining, then, is the question, as parsed earlier, concerning whether it uses its 420 acre property, with nine buildings and a main house, greenhouses and carriage house ” exclusively ” for the charitable purposes stated in the statute.

The record supports respondent’s conclusion that it does not. In denying the application on April 3, 2001, petitioner was advised that it was not entitled to an exemption “due to the fact that the applicant does not meet all the requirements of Real Property Tax Law RPTL 420 and/or RPTL 462.” In the record before me respondents amplify their several reasons for denying tax exempt status.

Respondent argues that the property is not devoted to a charitable purpose because it is not devoted to a public purpose nor to the public good. It is not open to the public nor used and enjoyed by the public and the subject of the conferences and meetings held there are not consistent with charitable purposes within the meaning of RPTL ?§420-a. Second, the entire property is not used for a tax exempt purpose as evidenced by the 300 acres that remain vacant and unimproved. Therefore, at best petitioner could be granted a partial exemption. Third, use by other institutions does not constitute use by petitioner. Further, since the statute requires use by a charitable organization for charitable purposes there must be some showing that the organizations using and benefitting from the property satisfy those criteria. Finally respondent points out that the property is infrequently or sporadically utilized.

While certain of respondent’s contentions lack judicial support, see contra RPTL ?§420-a (property used by owning non profit corporation or another such corporation is tax exempt) and North Manursing Wildlife Sanctuary v. Rye, 48 N.Y.2d 135 (1979) (property used exclusively for charitable purposes not required to be completely open to public), or are as a practical matter non-persuasive, (judicial notice is taken that the majority of entities attending at the Property are charitable institutions), the focus of respondent’s denial is accurate. Greentree hosts a vast variety of organizations for very few days of the year without any evidence of what charitable purpose those groups are pursuing when using the Property or why the Property must be closed to the public 100 percent of the time for the safety of these groups. There is no explanation as to why any of the groups other than the United Nations need the privacy and security and isolation of 420 acres.

In countering the Assessor’s decision petitioner relies upon the exclusivity requirement of the statute while forgetting the second imperative that it be used. To justify tax exempt status it is not enough that the property be legitimately owned by a charitable organization, it must also be committed to fulfilling the stated mission of the organization. On this record the mission of the Foundation has not been clearly stated. It is variously asserted that it is dedicated to preservation of human rights, international justice, international peace and cooperation, horticulture as a vehicle for teaching science and the environment, preservation of court tennis and aid of government transition for totalitarian dictatorships to democracies. That asset of the Foundation which is comprised of real property is sparingly and incompletely committed to pursuit of any of the aforesaid Foundation goals, in several respects. As a result the denial of the application is wholly reasonable.

The decisions of Judge Gabrielli in North Manursing Wild Life Sanctuary, supra, and New York Botanical Gardens v. Assessors of the Town of Washington, 55 N.Y.2d 328 (1982) are instructive of the issues in this proceeding. A property sought to be exempted from taxation on the ground that it is being used as a charitable purpose must be used for a public purpose. Use of property wherein open space is a characteristic does not mean unfettered access. It means finding a balance point between public use and enjoyment of the land and oversight and protection of the space to a degree consistent with its use. If petitioner hosts world famous dignitaries whose presence poses a high level security risk, then a private buffer of 420 acres might well be reasonable. If scholarly research, writing and communication is taking place 420 acres of tranquillity and privacy would be conducive to that effort. However, security and tranquility are not considerations for the Manhasset High School, or the Council of Churches or the Police Department.

Similarly, if there are no visitors, running the full gamut of educators considering containment of racial prejudice to dignitaries of the United Nations, then the Property is under utilized. In short tax, exemption will be denied if the applicant cannot identify beneficiaries in substantial number who need and presently receive the protection and privacy afforded by 420 acres.

That, of course, is not to say that preservation of open spaces does not have its place in the categories of charitable purposes for which exemption is granted. Mohonk Trust v. Assessors, 47 N.Y.2d 476 (1979). However, the lesson carefully taught by Judge Gabrielli in the foregoing cases is that the management of the open space must be carefully calibrated to accomplishment of the organization’s goals. That nexus is missing here. The persons who need personal security, i.e. dignitaries from the UN, used the Property on three occasions for two days each in the past year. And it is no answer to say that the Property need not be used continuously. In Congregation Emanu-El of City of New York v. City of New York, 150 M. 657 (Sup. Ct., N.Y. Cty., 1934) affd. 243 A.D. 692, a summer hiatus was acceptable as the school recess was a dimension of the temple’s educational mission whereas here there is no such correlation. See, also Nassau County Council Boy Scouts of America v. Board of Assessors Town of Rockland, 84 A.D.2d 862 (3d Dept 1981) (Use by Boy Scouts of 3,700 acres to fulfill merit badges although not daily is integral to programs of Boy Scouts.) In viewing the infrequent use of the Property, in relation to its size, in the context of the suburban communities of Nassau County, petitioner seemingly fails to distinguish the notion of a private park and open space preserved for the public health and welfare under the police power of the state. A municipality must consider the need for open space at one and the same time that it remains mindful of the financial consequences of removing parcels of land from the tax rolls. American Bible Society v. Lewisohn, 40 N.Y.2d 87 (1976).

In holding that the Assessor properly found from the evidence in the record that the Property is not used exclusively for exempt purposes it should not be concluded that the Property is not susceptible to use as a highly secure meeting place or place of uninterrupted study and reflection. It may be considered to be well suited to becoming a center for International Transitional Justice or as a center to promote universal human rights and guidance for nations in transition to democracy partially because of the privacy and security and distance from ordinary distractions. When that day comes the application must be reconsidered. At the present the restricted access to the parcel is not consistent with the humanitarian projects of the charitable organizations using it and petitioner did not sustain its burden of establishing exemption under the statute. The decision of respondents is supported by the evidence, it was not arbitrary and capricious, and the petition is, accordingly, denied.

This determination constitutes the decision and judgment of the court.