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Court Rules Against City In Airport Tax Case

By JEFFREY B. COHEN, Courant Staff Writer

December 29, 2007

The city of Hartford cannot tax the right to park a plane at state-owned Brainard Airport, the state Supreme Court has ruled.

In an opiniondated Jan. 1 that was released this week, the court affirmed the 2006 decision of a trial court judge that the state-owned airplane hangars are exempt from municipal property tax, and that the right to use the hangars isn't taxable, either.

Brainard Airport is owned by the state and exempt from local property tax.

In 2003, the state entered into a 30-year lease agreement with developer Connecticut Hangars, LLC to convert 315,885 square feet of airport land into hangar space. Not long afterward, the developer sold 30-year rights to park airplanes for between $48,000 and $60,000 per space.

Beginning with tax bills dated June 2005, the city assessed taxes against 14 hangar users — between $1,500 and $2,400 a year — claiming that the developer's action constituted a sale of the property.

In September 2005, the hangar users filed suit. State judge trial referee Arnold W. Aronson ruled in their favor in November 2006, saying "it is clear that the subject hangars at Brainard Airport are exempt from municipal property taxes …"

The Supreme Court agreed. In its ruling in Hotshoe Enterprises, LLC, Et Al. v. City of Hartford, the court upheld "the thoughtful and comprehensive memorandum of decision filed by the trial court," adopting its "well reasoned decision as a statement of the facts and the applicable law on that issue." Five of the high court's eight judges heard the case.

"These guys are paying for the right to park their airplanes inside these hangars, but it's clear the hangars are the property of the state of Connecticut," Peter Reynolds, attorney for the airplane owners, said Friday.

"When [the hangar's developer] deeds a unit to one of the plaintiffs, [city Corporation Counsel John Rose's] argument was that that creates something new, a new taxable interest," Reynolds said. "But there wasn't any case law or statutory authority to support his argument."

Reynolds said the right to park a plane in a hangar is not unlike the right to park a car in a long-term parking space. But instead of renting the space on a monthly basis, the hangar's developer chose to sell the right for 30 years — giving the developer cash up front to build more hangars, and creating a new condominium association of airplane owners responsible for the structure's upkeep.

"There's a question as to whether the city was really thinking this through very clearly, and should it have spent the time and money that it did," Reynolds said. "What the city was trying to do was make it more than it is."

The city declined a request by The Courant to discuss the ruling. A statement issued by Sarah Barr, spokeswoman for Mayor Eddie A. Perez, indicated the city was "disappointed" by the Supreme Court's ruling.

"[T]he city believed that the property was no longer subject to state tax exemption after a private party developed the Brainard Airport airplane hangars in question and then turned around and sold them to private parties for their personal use," Barr said.

Barr could not provide an estimate for the legal fees associated with the cost of the appeal.

Perez has expressed his public support for a plan of the Metropolitan District Commission to turn the airport and neighboring land into a 6.25-million-square-foot riverfront development.