High Court Rules for City On Airport

Valley News Staff Writer
Published: 7/3/2016 12:02:17 AM
Modified: 7/3/2016 12:02:16 AM

Concord — A decadelong tax dispute came to an end on Tuesday, when the New Hampshire Supreme Court ruled the city of Lebanon did not break a lease agreement with Signal Aviation Services by increasing its property assessment.

The decision puts to rest Signal’s claims that Lebanon violated the terms of a lease agreement that stipulated Signal’s rates and terms should be akin to other airport businesses.

“The city is very pleased that this is finally over,” said Adele Fulton, the city’s attorney. “It’s finally resolved.”

She said the high court’s decision affirms an argument made by Lebanon for years: that all taxpayers are treated equally.

Requests for comment from Stephen Girdwood, attorney for Signal Aviation, were not returned, and company officials declined to comment when reached by phone.

The tax dispute dates back to 2006, when the city increased Signal’s property assessment to $848,000 from $77,000. The company said the reassessment was unfair and violated the terms of its lease.

Signal, now called Granite Air Center, provides fuel, maintenance and other services to aviation customers on about 9 acres at Lebanon Municipal Airport.

The city assessed Signal’s hangars at the airport at $2.4 million in 2015, and it pays about $66,000 in taxes.

During the reassessment, the city increased the per-acre rate of land but also attributed more land to Signal.

The company also said it was being disproportionately assessed compared to other tenants.

The Supreme Court found in 2013 there was a legal basis for the higher assessment, and sent arguments regarding the lease back to Grafton Superior Court, which ruled in favor of the city.

The lawsuit went back before the high court this year.

Much of the case revolved around Signal’s 20-year lease with the city that said the airport would not allow another company to operate under “rates, terms or conditions” that were more favorable.

Signal argued the city has the authority to forgo assessing property leased to corporations, and should have used the authority in line with the lease agreement. Since the airport land is city-owned, it’s tax exempt, the company said.

In its ruling, the court said the city does not have that power and cannot contract with entities not to tax property. Justices said the lease includes provisions for taxes.

Signal also argued it was treated differently from companies doing similar business at the airport, but because the company did not make those arguments in its original pleadings, the court rejected that assertion.

“We have concluded that (the lease), so far as it concerns taxation, merely obligates the city to require all other operators to pay all lawfully levied or assessed taxes,” the high court ruled in the 4-0 decision.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.

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