Town of Harrison v. County of Westchester, 13 N.Y.2d 258 (1963)
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Property owned by a municipality and leased to private entities for their exclusive private use is not considered to be held for a “public use” and is therefore not exempt from taxation, even if the municipality derives revenue from the lease.
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Summary
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The Town of Harrison sued Westchester County, arguing that two airport hangars (“D” and “E”) leased to private companies were subject to town taxation. Westchester County argued the hangars were exempt as property “held for a public use.” The New York Court of Appeals held that the hangars were not being used for a public use because they were under the long-term, exclusive control of private corporations and used solely for the storage and maintenance of aircraft serving only their personnel and guests. Therefore, the hangars were subject to taxation.
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Facts
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Westchester County owned the Westchester County Airport. The airport was operated by a private company under a lease agreement with the county. Hangars “D” and “E” were constructed by the operating corporation and subsequently leased to private companies. Hangar “D” was leased to four companies for their exclusive use, who then sublet the space to other companies primarily for storing and maintaining privately owned aircraft. Hangar “E” was leased under an agreement restricting its use to the storage and maintenance of private corporate aircraft. Both hangars were used almost exclusively to house and service private aircraft.
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Procedural History
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The Town of Harrison brought two actions. The first sought to declare Hangar “E” taxable. The second sought to declare Hangar “D” taxable for prior years. The trial court initially denied summary judgment for the town and dismissed its complaint. The Appellate Division reversed, ordering a trial. The two actions were consolidated. After trial, the court ruled Hangars “D” and “E” were taxable, while Hangar “B” was exempt. The Appellate Division affirmed. The County appealed the tax status of Hangars “D” and “E” to the New York Court of Appeals.
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Issue(s)
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Whether hangars at a county-owned airport, leased to private entities under long-term agreements for their exclusive private use, are “held for a public use” and thus exempt from town taxation under Section 406 of the Real Property Tax Law.
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Holding
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No, because the hangars were not being employed for a public use. The long-term, exclusive control by private corporations and the use solely for private aircraft storage and maintenance meant the hangars were not being used for the benefit of the community at large.
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Court’s Reasoning
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The court stated that property is