24-003829 Exemption.pdf
Township Of Marion, Petitioner V City Of Howell, Respondent · 24-003829-TT
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STATE OF MICHIGAN GRETCHEN WHITMER GOVERNOR DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS LANSING MARLON I. BROWN, DPA DIRECTOR MICHIGAN TAX TRIBUNAL · 611 W. OTTAWA ST., LANSING, MI 48933 · 517-335-9760 PO BOX 30232, LANSING, MI 48909 · Other Carriers: 2407 N. GRAND RIVER AVE., LANSING, MI 48906 Marion Township, MICHIGAN TAX TRIBUNAL Petitioner, SMALL CLAIMS DIVISION v MTT Docket No. 24-003829 City of Howell, Case Type: Exemption Respondent. PROPOSED OPINION AND JUDGMENT Personnel Presiding: Kari L. Miles, Administrative Law Judge Location of Hearing: Telephone Hearing Held on: October 15, 2025 Appearances on Behalf of Petitioner: Matt Dedes and Robert Hanvey Appearances on Behalf of Respondent: Peter Augostino PROPOSED JUDGMENT The subject properties shall not be granted an exemption under MCL 211.7m for the 2024 and 2025 tax years. The subject properties’ taxable value (TV) for the tax years at issue shall be as follows: Parcel Number: 4717-01-200-004 Year TV 2024 $205,800 2025 $212,179 Parcel Number: 4717-01-200-005 Year TV 2024 $109,900 2025 $113,306 PROCEDURAL HISTORY Petitioner applied to the 2024 March Board of Review (BOR) for an exemption under MCL 211.7m. Petitioner filed a petition with the Tribunal on July 29, 2024, and Respondent filed an answer on December 3, 2024.
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MTT Docket No. 24-003829 Page 2 of 7 The amount of TV in dispute, as set forth in the pleadings, for all tax years at issue is within the jurisdictional limits of the Small Claims Division.1 Further, the property’s assessment for subsequent tax years is included in this proceeding.2 ISSUES AND APPLICABLE LAW The issue in this matter is whether Petitioner’s property qualifies for a property tax exemption pursuant to MCL 211.7m. The petitioner must prove, by a preponderance of the evidence, that it is entitled to an exemption.3 MCL 211.7m provides, in relevant part: Property owned by, or being acquired pursuant to, an installment purchase agreement by a county, township, city, village, or school district used for public purposes and property owned or being acquired by an agency, authority, instrumentality, nonprofit corporation, commission, or other separate legal entity comprised solely of, or which is wholly owned by, or whose members consist solely of a political subdivision, a combination of political subdivisions, or a combination of political subdivisions and the state and is used to carry out a public purpose itself or on behalf of a political subdivision or a combination is exempt from taxation under this act. . . . SUMMARY OF EVIDENCE A. Petitioner’s Evidence Petitioner’s Contention of TV: Parcel Number: 4717-01-200-004 Year TV 2024 $0 2025 $0 Parcel Number: 4717-01-200-005 Year TV 2024 $0 2025 $0 1 See MCL 205.762(1). 2 See MCL 205.737(5)(b). 3 See ProMed Healthcare v Kalamazoo, 249 Mich App 490; 644 NW2d 47 (2002).
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MTT Docket No. 24-003829 Page 3 of 7 The exhibits offered by Petitioner may be viewed on lines 1 and 28 of the docket maintained in this case.4 No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Petitioner contends: These properties were purchased by the Township for the public purpose of protecting the Township sewer and water systems REUs (taps assigned to the property) from purchase by a speculator at Michigan Tax Sale. After the REUs were assigned to the properties by the Township, the properties were transferred into the City of Howell under an existing Act 425 agreement. The Township REUs were subject to a twenty-year Special Assessment that still had several years of payments remaining, but due to the change of jurisdiction the Township could no longer assess the unpaid REU fees on the taxes. If the properties were purchased at tax sale by a private party, the past due balance would have been extinguished and remaining payments would be uncertain. The Act 425 agreement provided for a waiver of capital charges for up to 400 sewer REUs if the property came into the City. The City has disputed that claim and we are still negotiating a resolution. As soon as we resolve the issue with the sewer REUs and the right to capital charges with the City, the Township will determine the next steps with regards to the property’s continued ownership by the Township and potential future uses. At this point, the property is being held by the Township for a public purpose and is not listed or marketed for sale.5 Petitioner’s representative testified that the subject properties were in the township when the special assessments for sewer and water were assigned. The prior owners made installment payments and exercised their option under the 425 agreement and transferred the properties to Respondent with several installment payments remaining. Petitioner purchased both properties to preserve the integrity of the special assessments. Petitioner could not sell the properties while there was a disagreement over the 425 agreement. In late 2024, an agreement was reached with Respondent, and Petitioner began marketing the properties for sale. Respondent claims the 425 agreement was terminated by the foreclosure sale, but Petitioner’s position is that the 425 agreement is not extinguished by foreclosure. The 4 The docket is located on the Tribunal’s website at Tax Docket Lookup Search Page and may be accessed by entering the docket number assigned to this case. 5 Petition.
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MTT Docket No. 24-003829 Page 4 of 7 subject properties were exempt for many years and then two years ago Respondent decided to remove the exemption. Petitioner’s representative further stated that both properties are vacant. The public purpose is to preserve the integrity of the special assessments and not lose the levy if the properties went to tax sale. B. Respondent’s Evidence The properties’ TV as confirmed by the BOR for the tax years at issue: Parcel Number: 4717-01-200-004 Year TV 2024 $205,800 2025 $212,179 Parcel Number: 4717-01-200-005 Year TV 2024 $109,900 2025 $113,306 The exhibits offered by Respondent may be viewed on lines 5 and 6 of the docket maintained in this case.6 No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Respondent claims there is no public purpose taking place at the subject properties. Respondent’s representative testified that both parcels were added to the roll in 2024. The assessor took over in 2023 and reviewed all exemptions in the city. Under MCL 211.7m Petitioner is not serving any public purpose. The March BOR did reduce the value but did not grant the exemption. The Act 425 agreement states that when parcels come into the city, the city must pay 1.28 mills back to the township. The 425 agreement that is in place is still being followed. Petitioner purchased Parcel No. 4717-01-200-005 on September 29, 2010, and Parcel Number 4717-01-200-004 was purchased November 24, 2014. 6 The docket is located on the Tribunal’s website at Tax Docket Lookup Search Page and may be accessed by entering the docket number assigned to this case.
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MTT Docket No. 24-003829 Page 5 of 7 FINDINGS OF FACT The following facts were found to be proven by a preponderance of the evidence: 1. Parcel No. 4717-01-200-004 and Parcel No. 4717-01-200-005 are vacant land located on Lucy Road, Livingston County. 2. The subject properties are classified as residential. 3. Petitioner is the owner of the subject properties. 4. The 2024 March BOR denied Petitioner’s request for exemption. 5. The subject properties were transferred into the City of Howell under an Act 425 agreement (MCL 124.21 – 124.30). 6. The subject properties were under a twenty-year special assessment with several years of payments remaining. 7. Petitioner and Respondent were disputing the terms of the Act 425 agreement. 8. Petitioner purchased Parcel No. 4717-01-200-005 on September 29, 2010, and Parcel Number 4717-01-200-004 was purchased November 24, 2014. 9. Petitioner’s stated public purpose is to preserve the integrity of the special assessment on the subject properties. CONCLUSIONS OF LAW The following authority and reasoned opinion supports the Tribunal’s determination: The General Property Tax Act provides that “all property, real and personal, within the jurisdiction of this state, not expressly exempted, shall be subject to taxation.”7 It is also well-settled that a petitioner seeking a tax exemption bears the burden of proving, by a preponderance of the evidence, that it is entitled to the exemption.8 Neither the Act 425 agreement nor the special assessments are at issue in this appeal; the sole issue is Petitioner’s claim for exemption under MCL 211.7m for the 2024 and 2025 tax years. MCL 211.7m states: Property owned by, or being acquired pursuant to, an installment purchase agreement by a county, township, city, village, or school district used for public purposes and property owned or being acquired by an agency, authority, instrumentality, nonprofit corporation, commission, or other separate legal entity comprised solely of, or which is wholly owned by, or whose members consist solely of a political subdivision, a combination of political subdivisions, or a combination of political subdivisions and the state and is used to carry out a public purpose itself or on behalf of a political subdivision or a combination is exempt from taxation under this act. . . . [Emphasis added.] 7 MCL 211.1. 8 See ProMed Healthcare v Kalamazoo, 249 Mich App 490, 492; 644 NW2d 47 (2002).
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MTT Docket No. 24-003829 Page 6 of 7 Because there is no dispute that Petitioner is a township and owns the subject properties, the sole issue before the Tribunal is whether the subject properties are used for a public purpose. “Public purpose” is not defined in the statute. In City of Mt Pleasant v State Tax Commission, the Michigan Supreme Court cited previous determinations that “a ‘public purpose’ promotes ‘public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents within the municipal corporation. . . .’”9 Whatever the public purpose, a present use, and not a future intended use, is a necessary prerequisite to exemption under MCL 211.7m: The language chosen by the Legislature indicates that to be tax-exempt, the property must be ‘used for public purposes.’ MCL 211.7m (emphasis added). Thus, during each tax year in question, the city must have made a present use of the land that qualifies as a ‘public purpose’ so that the city will have ‘used’ the land for that purpose. While this inquiry is, of course, fact-intensive, the court must consider what steps the city has taken to move from merely holding the land to actually using it for a public purpose.10 Accordingly, Petitioner’s intent with respect to use of the property is irrelevant. It is Petitioner’s actual use of the property during the tax years at issue that determines its eligibility for exemption. The Tribunal finds that Petitioner has failed to establish an actual use of the subject vacant land that meets the criteria of a public purpose under MCL 211.7m. First, Petitioner’s stated public purpose is preserving the integrity of the special assessments on the subject properties. Petitioner has failed to put forth any argument or cite any authority that such use meets the definition of “public purpose” established by the Michigan Supreme Court. Second, even assuming that preserving the integrity of the special assessments meets the definition of a public purpose, Petitioner has failed to establish that it has taken any steps “from merely holding the land” to using it for a public purpose. Rather, Petitioner acquired the subject properties and held them without making any present use, while the dispute over the 425 agreement with Respondent was ongoing. Petitioner’s representative testified that once the disagreement was resolved, the properties have been listed for sale. Given that Petitioner has failed to establish a public purpose or a present use of the properties for any public purpose as of the applicable tax days, the Tribunal finds that Petitioner is not entitled to exemption under MCL 211.7m for the 2024 or 2025 tax years. JUDGMENT This is a proposed decision and not a final decision. As such, no action should be taken based on this decision. After the expiration of the time period for the opposing party to file a response to the exceptions, the Tribunal will review the case file, including the Proposed Opinion and Judgment (POJ) and all exceptions and responses, if any, and: 9 477 Mich 50, 54; 729 NW2d 833, 835 (2007). 10 Id.
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MTT Docket No. 24-003829 Page 7 of 7 a. Issue a Final Opinion and Judgment (FOJ) adopting the POJ as a Final Decision; b. Issue an FOJ modifying the POJ and adopting the Modified POJ as a Final Decision; or c. Issue an Order vacating the POJ and ordering a rehearing or such other action as is necessary and appropriate. EXCEPTIONS The parties have 20 days from the “Entered” date below to notify the Tribunal in writing, by mail or by electronic filing, if they do not agree with the POJ and to state in writing why they do not agree with the POJ (i.e., file exceptions to the POJ). Exceptions must be signed and are limited to the evidence submitted prior to or at the hearing and any matter addressed in the POJ. There is no fee for filing exceptions. Parties must provide the opposing party with a copy of their exceptions and file proof of service with the Tribunal (i.e., submit a written statement indicating that the opposing party has been provided or “served” with a copy of the exceptions). Service on the opposing party can be made by mail, or if agreed to by the parties, by electronic service (i.e., email). The proof of service must be signed. The opposing party has 14 days from the date the exceptions are served on that party to file a written response with the Tribunal. Responses to exceptions must be signed. Parties must provide the opposing party with a copy of their response to the exceptions and file a signed proof of service with the Tribunal. If the parties fail to sign their exceptions or responses, or if they fail to submit a signed proof of service for the exceptions and/or responses, the Tribunal may not consider the exceptions or responses in issuing the FOJ. By _________________________________ Entered: December 12, 2025 PROOF OF SERVICE I certify that a copy of the foregoing was sent on the entry date indicated above to the parties or their attorneys or authorized representatives, if any, utilizing either the mailing or email addresses on file, as provided by those parties, attorneys, or authorized representatives. By: Tribunal Clerk