Oakland Circuit Court LC No. 2017-161231-AA
Before: Sawyer, P.J., and O'Brien and Letica, JJ.
Delta Business Center, LLC (Delta), appeals as of right the
trial court's opinion and order affirming the State Tax
Commission's (STC's) denial of Delta's
application for a tax exemption under the Plant
Rehabilitation and Industrial Development Districts Act (the
PRIDDA), MCL 207.551 et seq. On appeal, we are asked
to decide under what circumstances leased property can
qualify as "industrial property" under the PRIDDA.
We conclude that for leased property to qualify as
"industrial property" under the PRIDDA, a lessee
must be liable for property taxes and must furnish proof of
that liability. We further conclude that this means that a
lessor cannot receive a tax exemption under the PRIDDA when
the leased property must qualify as "industrial
property." Because Delta is strictly a lessor of the
property at issue, and because that property must qualify as
"industrial property" for Delta to receive its
requested tax exemption, the STC properly denied Delta's
application. We affirm.
the PRIDDA, local governmental units may establish
"plant rehabilitation districts" and
"industrial development districts." MCL 207.554(1).
After such a district is established, "the owner or
lessee of a facility may file an application for an
industrial facilities exemption certificate [IFEC] with the
clerk of the local governmental unit that established the
plant rehabilitation district or industrial development
district." MCL 207.555(1). If approved by the local
government, the application goes to the STC for review. MCL
207.557(1). If the STC grants the IFEC application, the
applicant gets a tax advantage: in place of ad valorem taxes,
an "industrial facility tax" is levied on the
exempt property. MCL 207.561. If the STC had granted
Delta's IFEC application, Delta's "industrial
facility tax" for up to the next 12 years would have
been calculated using the taxable value of the at-issue
property in the year before the effective date of the IFEC,
essentially freezing the taxable value of the property. MCL
207.564(1); MCL 207.566.
is the owner of a 93, 000-square-foot industrial park that it
leases to tenants. The building on Delta's property was
originally intended for printing newspapers, but, by 2017,
that use was no longer economically feasible. So in an
agreement between Delta Charter Township (the Township) and
Delta, the Township agreed to grant Delta a 10-year IFEC; in
return, Delta would invest $3, 900, 000 in the property.
being approved by the Township, Delta's IFEC application
went to the STC for review. For Delta to receive the IFEC
that it requested, it had to establish, among other things,
that its property would constitute "industrial
property" under MCL 207.552(7) after it was renovated.
That definition provides a detailed explanation of all the
activities that can be performed on a property for it to
qualify as "industrial property." The STC
interpreted MCL 207.552(7) as requiring that the IFEC
applicant engage in one of the activities listed in that
statute for the applicant to qualify for the exemption.
Though Delta's tenants were allegedly engaging in listed
activities, Delta was using the property for an unlisted
activity-real estate development. The STC therefore denied
Delta's IFEC application, concluding that Delta
"does not qualify for the exemption because it does not
engage in any of the activities listed within the definition
of industrial property as outlined in MCL 207.552."
appealed to the circuit court. The circuit court affirmed the
STC's decision, but on other grounds. The trial court
reasoned that for leased property to be considered
"industrial property" under MCL 207.552(7),
"the lessee must be liable for the payment of property
taxes and must furnish proof of that
liability." The court concluded that because Delta
"offered no proof of [its] lessees' liability for
payment of property taxes," the STC was authorized by
law to deny Delta's application.
now appeals by right.
STANDARD OF REVIEW
appealed the STC's decision in accordance with the
Administrative Procedures Act, MCL 24.201 et seq.
Under that act, the circuit court was required to set aside
the STC's decision if, among other reasons, it was in
violation of a statute or was affected by a substantial and
material error of law. MCL 24.306.
Court reviews the circuit court's decision "to
determine whether the circuit court applied correct legal
principles and whether it misapprehended or grossly
misapplied the substantial evidence test to the agency's
findings." Sterling Heights v Chrysler Grp,
LLC, 309 Mich.App. 676, 681; 873 N.W.2d 342 (2015)
(quotation marks and citation omitted). "This Court
reviews de novo questions of statutory interpretation."
appeal, Delta argues that the STC's denial of Delta's
IFEC application was a material error of law or otherwise
violated the PRIDDA. We disagree.
court's primary task when interpreting a statute is to
discern and give effect to the intent of the
Legislature." Tomra of North America, Inc v Dep
't of Treasury,325 Mich.App. 289, 299; 926 N.W.2d
259 (2018). This Court must "first consider the
statutory language itself; if the language is unambiguous, we
conclude that the Legislature must have intended the clearly
expressed meaning and we enforce the statute as
written." Id. Tax exemptions are ...