Supervisor of Assessments of Pg. Cty. v. Washington Nat'l Arena Ltd. P'ship.

Gilbert, C. J., delivered the opinion of the Court. “This is the Fourth ...,” 1 not of July, but time that a variation of this matter has been before the appellate courts of this State. 2 Hopefully, it is the last time. The issue presented by this appeal is whether the leasehold interest of the appellee, Washington National Arena Limited Partnership (WNA), in the land and improvements on the property of Maryland-National Capital Park and Planning Commission (MNCPPC) is exempt from county and State real property taxation under Md. Ann. Code art. 81, § 8 (7) (e) as a “concession for occupancy of a public park.” 3 Underlying, ⁶⁹⁷ but close to the surface, is a secondary question of what is a “public park.” *** 4 The facts giving rise to this case are uncontroverted. On November 21, 1966, the Maryland State Roads Commission and the Board of Public Works conveyed to MNCPPC the “Kuenne Tract,” a 75.31 acre parcel of land in Prince George’s County. At the time of the conveyance, the land was in its natural state.

Reacting to a county policy of development of cultural centers, MNCPPC, in 1971, began to formulate plans to improve the “Kuenne Tract.” In furtherance of those plans, the Prince George’s County Planning Board authorized MNCPPC to enter into a lease with Potomac Sports Ltd. (Potomac) for construction and operation of a sports and recreation complex on the “Kuenne Tract.” A lease was executed between MNCPPC and Potomac in August 1971. Under the terms of the lease, Potomac agreed to lease 50 acres of the Kuenne parcel and to make certain improvements which would be used by Potomac, but owned by MNCPPC. The lease was operative for a 20 year base term, with two successive options of renewal for 10 year periods. Subsequently, Potomac opted not to undertake performance and, with the consent of MNCPPC, assigned the lease to WNA.

Later, MNCPPC and WNA entered into a “Shared Park-Arena Area Agreement” by which MNCPPC leased an additional 10 acres of the remaining 25.31 acres to WNA for parking facilities adjacent to the proposed “sports and recreation” complex. As part of the agreement, MNCPPC was entitled to designate “play areas,” which “areas” were not to interfere with WNA’s right to park vehicles during the time the sports arena was in use. ⁶⁹⁸ The County issued a building permit on September 13,1972, and work commenced on the project. When completed, the WNA facility, known as the Capital Centre, and its adjacent parking lots covered 60 acres of the “Kuenne Tract.” Fifteen acres remain in their natural state. Since its opening on December 2,1973, the public has had an opportunity to view, within the arena, professional sporting events, circuses, shows, exhibitions, fairs, and concerts.

Admission to most of the events is by payment of a fee, but some admissions are gratuitous. 5 On January 9, 1974, the Supervisor of Assessments of Prince George’s County, dispatched a Notice of Assessment to MNCPPC based upon the value of the 50 acre parcel subject to the lease, and the 10 acre tract covered by the “Shared Park-Arena Area Agreement.” By so doing, the Supervisor began this litigation. Within a matter of days, WNA protested the assessment. Less than a month later, February 22, 1974, a “Notice of Proposed Assessment” was sent by the Supervisor to MNCPPC. A final notice was sent in November 1974 to MNCPPC.

No change was made in the assessment from that which was proposed in February. WNA appealed to the County Board of Property Tax Assessment Appeals. The Board, in reversing the Supervisor’s determination on the taxability of the property said: “1) Neither the land nor improvements that are the subject matter of this proceeding are owned by the State of Maryland. 2) That even if the said land and improvements were owned by the State of Maryland, the property would be exempt from taxation under Article 81, Section 8, Subsection 7 (e) which exempts property ⁶⁹⁹ ‘used by way of a concession for occupancy of a park.’ ” The Supervisor appeals to the Tax Court. 6 He fared no better before that body then he did with the Board. The Tax Court, however, found that a park is “an area set aside for public recreation” and that under that definition WNA’s Capital Centre was exempt from taxation pursuant to Md. Ann. Code art. 81, § 8 (7) (e).

Chagrined at the decision of the Tax Court, the Supervisor appealed to the Circuit Court for Prince George’s County. While that appeal was pending, the Court of Appeals held, in Maryland-National Capital Park and Planning Commission v. Washington National Arena, supra, that WNA was precluded by terms of the lease from contesting an assessment of the improvements on the 50 acre tract. Thus, that assessment is adjudicated and we are faced only with the assessments of the 50 acres of land under the lease, plus the 10 acres of land under the Shared Park Agreement, and the improvements located on that 10 acres. The circuit court affirmed the holding of the Tax Court.

The Supervisor refused to accept defeat and noted an appeal to this Court. Judicial review of Tax Court decisions is severely limited. Fairchild Hiller Corp. v. Supervisor of Assessments, 267 Md. 519, 521 , 298 A. 2d 148, 149 (1973); Comptroller of the Treasury v. Machiz, 42 Md. App. 218 , 399 A. 2d 946 (1979). Md. Ann. Code art. 81, § 229 (o) provides: “In any case, the circuit court for the county or the Baltimore City Court shall determine the matter upon the record made in the Maryland Tax Court.

The circuit court or Baltimore City Court shall affirm the Tax Court order if it is not erroneous as ⁷⁰⁰ a matter of law and if it is supported by substantial evidence appearing in the record. In other cases, the circuit court or Baltimore City Court may affirm, reverse, remand, or modify the order appealed from.” Unless the ruling of the Tax Court is “erroneous as a matter of law,” it will be affirmed, provided that “it is supported by substantial evidence ... in the record.” Comptroller of the Treasury v. Mandel Re-Election Committee, 280 Md. 575, 578 , 374 A. 2d 1130, 1131-32 (1977); Supervisor of Assessments v. Southgate Harbor, 279 Md. 586, 595-96 , 369 A. 2d 1053, 1058 (1977); Comptroller of the Treasury v. Diebold, Inc., 279 Md. 401, 407 , 369 A. 2d 77, 81 (1977); Comptroller of the Treasury v. Machiz, supra. Just as the Court, in Comptroller of the Treasury v. Mandel Re-Election Committee, supra, saw that case as “essentially one of statutory construction and a question as to whether the presentation of the music ... constituted, as a matter of law, a performance ...” (thus requiring payment of an admission tax) so, too, do we perceive the issue in the matter subjudice to be “one of statutory construction and a question as to whether” the 10 acres of land and improvements thereon, together with the original 50 acres of land, are a “park” within the meaning of Md. Ann. Code art. 81, § 8 (7) (e). Maryland law is firmly established that statutory exemptions to tax provisions are to be construed strictly in favor of the taxing authority.

Should there be real doubt as to the appropriateness of an exemption, the uncertainty “must be resolved in favor of the State.” 7 Perdue, Inc. v. State Department of Assessments & Taxation, 264 Md. 228, 233 , 286 A. 2d 165, 167 (1972); Pittman v. Housing Authority, 180 Md. 457, 460 , 25 A. 2d 466, 468 (1942). See also Suburban Propane Gas Corp. v. Tawes, 205 Md. 83, 87 , 106 A. 2d 119, 121 (1954); Clarke v. Union Trust Co., 192 Md. ⁷⁰¹ 127, 137, 63 A. 2d 635, 640 (1949). “To doubt an exemption is to deny it.” Perdue, Inc. v. State Department of Assessments & Taxation, supra, 264 Md. at 233 , 286 A. 2d at 167 ; Macke Co. v. State Department of Assessments & Taxation, 264 Md. 121, 133 , 285 A. 2d 593, 599 (1972); Pan American Sulphur Co. v. State Department of Assessments & Taxation, 251 Md. 620, 629 , 248 A. 2d 354, 359 (1968); Suburban Propane Gas Corp. v. Tawes, supra, 205 Md. at 87 , 106 A. 2d at 121 ; Sindall v. Baltimore City, 93 Md. 526, 530 , 49 A. 645, 646 (1901). Moreover, the Legislature, itself, has directed that all exemptions from taxation are to be construed strictly. Md. Ann. Code art. 81, § 9 (a).

As was said by Judge Digges in Perdue, Inc. v. State Department of Assessments & Taxation, supra, “[T]he State’s taxing prerogative is never presumed to be relinquished and the abandonment... [of that awesome power] must be proved by the party asserting the exemption.” 264 Md. at 233, 286 A. 2d at 168 . Before an exemption will be allowed, the claimant thereto must affirmatively demonstrate that the sought exemption is clearly permitted by law. Pittman v. Housing Authority, supra, 180 Md. at 460 , 25 A. 2d at 468 . In the words of Judge Delaplaine in Pittman , “[Ain exemption claim cannot be sustained unless it is shown to be within the spirit as well as the letter of the exemption law.” 180 Md. at 461 , 25 A. 2d at 468 .

The sum and substance of what we have herein said is that in order to benefit from the exemption contained in art. 81, § 8 (7) (e), it was incumbent upon WNA to demonstrate that its leasehold interest amounted to “a concession for occupancy of a public park.” To do so it is patent that WNA must have also shown that its complex is a “park.” The noun “park,” as used in Md. Ann. Code art. 81, § 8 (7) (e), has not been the subject of interpretation by the appellate courts of this State. The Court of Appeals skirted defining “park” in Mayor v. Peabody Institute, 175 Md. 186 , 200 A. 375 (1938), wherein the City of Baltimore was devised certain properties, which it was directed to sell. The proceeds of the sale were to be invested in a “public park.” The City proposed instead to purchase several playgrounds and sought a ⁷⁰² declaration as to the propriety of such action. The Court of Appeals stated: “We have not undertaken to define a public park.

A city, with a park system such as Baltimore has, needs no instruction or definition from us as to what constitutes a public park. What we do say is that a lot of neighborhood playgrounds is not a public park....” 175 Md. at 193 , 200 A. at 378 . Courts in other jurisdictions have not been so reticent when faced with