APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT
509 N.E.2d 1103, 156 Ill. App. 3d 623, 109 Ill. Dec. 264 1987.IL.866
Appeal from the Circuit Court of Macon County; the Hon. John L. Davis, Judge, presiding.
PRESIDING JUSTICE SPITZ delivered the opinion of the court. McCULLOUGH and KNECHT, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SPITZ
This appeal arises from administrative review of a decision by the Illinois Department of Revenue (Department) denying a charitable tax exemption sought by Decatur Sports Foundation (Foundation) for 1984 under section 19.7 of the Revenue Act of 1939 (Ill. Rev. Stat. 1983, ch. 120, par. 500.7). The plaintiff sought review in the circuit court of Macon County, which affirmed the Department's findings. On appeal, plaintiff raises issues relating to the standard of review applied by the circuit court, the hearing referee's Conclusion that the Foundation had not met the requirements for charitable exemption, and whether the decision included taxes imposed in 1983 and 1984. We affirm the judgment of the circuit court.
The Foundation's claim for charitable exemption concerns improvements made to Borg-Warner Field. Borg-Warner Field (field) is a 40-acre tract of land in Macon County used as a recreational facility for baseball, softball, soccer, and other sports. The property was originally owned by the Marvel-Schebler/Tillotson Division of Borg-Warner Corporation (Borg-Warner), which entered into a lease dated January 2, 1974, with Decatur Boys' Baseball for the purpose of developing facilities for youth baseball. Decatur Boys' Baseball subsequently constructed several baseball diamonds on the property.
In 1979, the American Softball Association chose Decatur as the site of its 1980 men's fast-pitch softball tournament. The Foundation was incorporated as Borg-Warner Decatur Sports Foundation, a not-for-profit corporation, on April 16, 1979. The name was changed to Decatur Sports Foundation the following year. The Foundation was organized, inter alia, to provide sports facilities for youths and adults in Decatur and Macon County, Illinois.
On July 27, 1979, Decatur Boys' Baseball assigned to the Foundation its interest in the lease with Borg-Warner and improvements made to the field. The agreement specified that the Foundation desired to construct a softball stadium to be used for the 1980 national tournament. The agreement stated that Decatur Boys' Baseball had certain rights to use the diamonds in exchange for its assignment of interest.
The Foundation entered into a 10-year lease with Borg-Warner Corporation on February 1, 1980. The total rent was $1 and the lease term was subject to two successive 5-year options. The lease provided that at the end of the lease period or at the time of termination, the Foundation would "peaceably deliver up the demised premises to the Lessor free of any clubhouse, outbuildings, gates, fences, goalposts, and all permanent structures placed on the demised premises by Lessee." Borg-Warner agreed to allow the Foundation "to remove any clubhouse, outbuildings, gates, fences, goalposts, and related items placed by the Lessee on the demised premises."
In preparation for the men's fast-pitch tournament in 1980, the Foundation constructed a new lighted diamond, a press box, bleachers, dugouts, and fences at the field. Further improvements resulted from the sponsorship of a men's baseball team by Archer Daniels Midland Company . ADM's team used the new diamond pursuant to a 1981 agreement with the Foundation in which ADM agreed to install new seating at the diamond. In 1983, ADM contributed over $80,000 for new bleachers, more than $50,000 for construction of restrooms, and agreed to pay for a new scoreboard. A national tournament was held at the field in 1983. Decatur Boys' Baseball and other area sports groups continued to use the field pursuant to subleases with the Foundation. The agreements required the groups to pay nominal rent and improve their portions of the field.
On December 28, 1983, the Macon County board of review issued a "Notice of Revised Assessment" for the year 1983 on improvements to Borg-Warner Field, which were assessed at $17,360. The Foundation filed an assessment complaint on February 1, 1984, claiming that the property was exempt as of January 1, 1983. The board of review issued a certificate of error dated August 10, 1984, stating that the improvements were exempt for 1983.
The board of review issued another "Notice of Revised Assessment" dated August 3, 1984, stating that the improvements were exempt for 1984, subject to State approval. The board forwarded a certification of exemption request to the Department, which was received September 12, 1984. The Department issued a denial notice dated November 27, 1984, which stated that the primary use of the property was not charitable.
On December 5, 1984, the Foundation and Borg-Warner entered into an agreement for gift providing for the transfer of ownership of the field to the Foundation. The agreement contained provisions for retaining the name of the field and for Disposition of the property upon dissolution of the Foundation. Borg-Warner ...