COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 72786 JUDSON RETIREMENT COMMUNITY : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION ROGER W. TRACEY : TAX COMMISSIONER : : Defendant-Appellee : : DATE OF ANNOUNCEMENT JUNE 18, 1998 OF DECISION: CHARACTER OF PROCEEDING: Administrative appeal From the Board of Tax Appeals Case No. 95-T-674 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: APPEARANCE: For Plaintiff-Appellant: JAMES D. VAIL, ESQ. JONATHAN L. STARK, ESQ. Schneider Smeltz Ranney & LaFond 629 Euclid Avenue, #1525 Cleveland, Ohio 44114 For Defendant-Appellee: JANYCE C. KATZ, ESQ. Assistant Attorney General ROBERT C. MAIER, ESQ. Assistant Chief Taxation Sec. 16th Floor State Office Tower 30 East Broad Street Columbus, Ohio 43266-0410 PATRICIA ANN BLACKMON, A.J.: Appellant Judson Retirement Community ( Judson ) appeals a decision by the Board of Tax Appeals ( BTA ) in favor of the -2- appellee Tax Commissioner. The Tax Commissioner partially denied Judson's application for real property tax exemption, ruling that one of Judson's facilities did not qualify as a hospital facility. Judson assigns the following two errors for our review: I. THE TOWER IS A HOSPITAL FACILITY WITHIN THE MEANING OF OHIO REVISED CODE 140.01(E) BECAUSE IT IS A SELF-CARE FACILITY. II. THE TOWER IS DEEMED TO BE A HOSPITAL FACILITY BECAUSE IT IS CONNECTED TO AND SUPPLEMENTS A LONG TERM CARE FACILITY AND A SELF-CARE FACILITY. Having reviewed the record and the legal arguments of the parties, we affirm the decision of the trial court. The apposite facts follow. Judson consists of two physically separate campuses offering continuing care for the elderly. The first campus, Judson Manor, provides self-care and assisted living. The second campus, Judson Park, provides self-care in the Jordan Gardner Tower ( Tower ), and assisted living and skilled nursing care in other Judson Park buildings. The two campuses are less than a mile apart. The Tower is the property at issue in this case. The Tower is composed of apartments, a health maintenance center, administrative offices, activity rooms, and public areas. Each apartment is equipped with special appliances and other devices to assist the elderly residents. In 1984, Judson was issued revenue bonds for approximately $5,500,000 to finance the cost of renovating and improving one of the buildings on the Judson Manor campus pursuant to Ohio Revised Code Section 140. Revised Code 140 allows the use of bonds issued -3- by hospital agencies to finance the construction of hospital facilities and permits tax exemption for those facilities. In 1988, Judson applied for tax exemption of its real property because it was financed by hospital bonds. The Tax Commissioner exempted the property on Judson Manor, but not the Tower and attached garage on the Judson Park campus. The Tax Commissioner reasoned the Tower and attached garage were not financed with hospital bonds as was the property on Judson Manor. Judson appealed to the Board of Tax Appeals ( BTA ), which reversed in part the Tax Commissioner's decision. The BTA ruled that both Judson Manor and Judson Park were considered hospital facilities under R.C. 140.01(E) and exempted both. The Tax Commissioner filed a notice of appeal to the Ohio Supreme Court, which reversed the decision of the BTA. Judson Retirement Community v. Limbach (1994) 70 Ohio St.3d 239. The Ohio Supreme Court based its decision on its earlier decision in Dublin School Dist. Bd. of Edn. v. Limbach (1994), 69 Ohio St.3d 255, where the Court held that residential facilities could not be considered hospital facilities for purposes of tax exemption under R.C. 140.08. The Ohio Supreme Court remanded the case to the BTA, instructing the Tax Commissioner to determine whether the independent living facility and attached garage at Judson Park were used as hospital facilities as defined in R.C. 140.01(E). The Tax Commissioner determined the Tower was primarily used as residences, thus the property was not exempt from taxation. The -4- Tax Commissioner based his decision on the fact that the only admission requirement is age. Judson appealed to the BTA, which affirmed the Tax Commissioner's decision. This appeal followed. In its first assignment of error, Judson argues the Tax Commissioner's decision that the Tower was not a hospital facility as statutorily defined was unlawful and unreasonable. Judson argues the evidence demonstrates that the Tower is a self-care facility pursuant to R.C. 140.01(E). Thus, the issue in the first assignment of error is whether the Tower qualifies as a self-care facility. In an appeal from a decision of the Board of Tax Appeals, the court's function `is to review the board's decision to determine if it is reasonable and lawful. *** As long as there is evidence which reasonably supports the conclusion reached by the board, the decision must stand.' The court of appeals is bound by the record that was before the BTA and may not substitute its judgment for that of the board. Additionally, the BTA has wide discretion in determining the weight to be given the evidence and the credibility of the witnesses which come before it. Finally, it should be noted that `statutes relating to the exemption from [property] taxes are to be strictly construed.' C&D Truck & Equip. Serv., Inc. v. Tracy (1996), 113 Ohio App.3d 556, 559 (citations omitted). To determine whether the Tax Commissioner's decision was unlawful and unreasonable, we must first refer to the governing statutes. Ohio Revised Code 140.08 exempts from taxation all hospital facilities purchased, acquired, constructed, or owned by a public hospital agency, or financed in whole or in part by obligations issued by a public hospital agency, and used *** as -5- hospital facilities. This statute does not exempt independent living facilities ***. O.R.C. 140.08(B)(1). Hospital facility is defined by O.R.C. 140.01(E), as buildings, structures and other improvements, additions thereto and extensions thereof, furnishings, equipment, and real estate and interests in real estate, used or to be used for or in connection with one or more hospitals, *** or self-care facilities *** and parking and service facilities in connection with any of the foregoing ***. (Emphasis added). Nowhere in the statute is self-care facility defined. In 1980, the Ohio Attorney General defined self-care facility as a facility in which persons who are ill, disabled or otherwise infirm receive some sort of care or treatment while residing in an environment that is equipped in such a way as to enable them to cope with the demands of daily living on an individual basis. OAG Opinion 80-078 (first paragraph of syllabus). O.R.C. 140.08 implies that independent living facilities are not exempt. Independent living facilities are self-care facilities designed or used as a residence for elderly persons. O.R.C. 140.01(N). This portion of the statute makes the Tower's only admission requirement, age, very relevant. Thus, the Tax Commissioner's reliance on the Tower's age requirement to form its decision was not unreasonable and unlawful. Furthermore, the Ohio Supreme Court decision in Dublin School Dist. Bd. of Edn. v. Limbach is also applicable. In Dublin, the court held that property used for residential purposes does not -6- meet the definition of hospital facility . Dublin (1994), 69 Ohio St.3d 255, 258. The Tower is primarily a residential facility. Although the Tower offers medical and health amenities and assistance to its residents, such amenities are minimal. The other accommodations offered at the Tower are not medically related. Instead, they are qualitative changes to make daily life for its elderly residents more pleasant. Judson's first assignment of error is overruled. In its second assignment of error, Judson argues it qualifies as a hospital facility pursuant to another portion of R.C. 140.01(E) which includes buildings *** in connection with the operation or maintenance of, or supplementing or otherwise related to the services or facilities ***. Judson argues that since it is connected to and supplements the skilled nursing facility at Judson Park and the assisted living facilities at Judson Manor, which are undoubtedly hospital facilities, it qualifies as a hospital facility too. The definition of hospital facility according to R.C. 140.01(E) does provide for buildings connected to long-term care and self-care facilities, which is the case here. However, R.C. 140.01(N) limits the broad definition of R.C. 140.01(E) by excluding independent living facilities like the Tower. This court must strictly adhere to the statute. Dublin at 258, citing Woman's Internat'l Bowling Congress, Inc. v. Porterfield (1971), 25 Ohio St.2d 271. In doing so, we conclude that R.C. 140.01(N) precludes the Tower from participating in the tax exemption, for which it -7- otherwise qualifies. Judson's second assignment of error is overruled. Judgment affirmed. It is ordered that Appellee recover of Appellant his costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Board of Tax Appeals Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. PORTER, J., and O'DONNELL, J., CONCUR. PATRICIA ANN BLACKMON ADMINISTRATIVE JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the .