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Board of Comm'r of the Port of New Orleans v. City of New Orleans

Court of Appeal of Louisiana, Fourth Circuit

February 26, 2014

BOARD OF COMMISSIONER OF THE PORT OF NEW ORLEANS
v.
CITY OF NEW ORLEANS; ERROLL G. WILLIAMS, ORLEANS PARISH ASSESSOR; AND MARLIN N. GUSMAN, ORLEANS PARISH SHERIFF

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH, NO. 2012-09003, DIVISION " I-14" . Honorable Piper D. Griffin, Judge.

Christopher K. Ralston, Bryan Edward Bowdler, Jeremy T. Grabill, PHELPS DUNBAR L.L.P., New Orleans, LA, COUNSEL FOR PLAINTIFF/APPELLEE BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS.

John J. Weiler, Christian N. Weiler, Erin J. Benoit, WEILER & REES, LLC, New Orleans, LA, COUNSEL FOR DEFENDANT/APPELLANT, HONORABLE ERROLL G. WILLIAMS, ASSESSOR, PARISH OF ORLEANS.

(Court composed of Judge Dennis R. Bagneris, Sr., Judge Terri F. Love, Judge Edwin A. Lombard, Judge Joy Cossich Lobrano, Judge Sandra Cabrina Jenkins). LOBRANO, J., DISSENTS WITH REASONS. JENKINS, J., DISSENTS WITH REASONS.

OPINION

Page 822

[2013-0881 La.App. 4 Cir. 1] Dennis R. Bagneris, Sr., Judge.

The plaintiff, the Board of Commissioners for the Port of New Orleans (" Port of New Orleans" ), filed suit against the City of New Orleans and Erroll G. Williams (" Mr. Williams" ), in his official capacity as the Tax Assessor for the Parish of Orleans, challenging ad valorem tax assessments on properties owned by the plaintiff. After a hearing, the trial court granted the Port of New Orleans's motion for summary judgment and ordered that the improvements on the properties are exempt from ad valorem taxation. Mr. Williams now appeals. After reviewing the record and the applicable law, we reverse and remand the matter to the trial court for further proceedings.

FACTS AND PROCEDURAL HISTORY

The Port of New Orleans is a political subdivision of the State of Louisiana. The Port of New Orleans owns land along the Inner Harbor Industrial Canal in New Orleans, Louisiana, at the municipal addresses of 3501 France Road, 4000 France Road, and 4001 Alvar Street. The Mississippi River Gulf Outlet Canal (" MRGO" ) was primarily responsible for the development of various port activities and maritime industries along the Inner Harbor

Page 823

Industrial Canal; [2013-0881 La.App. 4 Cir. 2] however, in 2009, a storm surge barrier was constructed in the MRGO which permanently closed the MRGO to all maritime shipping.

The Port of New Orleans leases the warehouse facilities and other improvements at these municipal locations to two for-profit entities, The Kearney Companies, Inc. and Southern Intermodal Xpress, Inc. During the term of their respective leases, The Kearney Companies has made repairs and/or leasehold tenant improvements in excess of $100,000.00 at 3501 and 4000 France Road, and Southern Intermodal Xpress has made over $40,000.00 of leasehold tenant improvements at 4001 Alvar Street.

On July 19, 2012, Mr. Williams issued tax assessments to The Kearney Companies and Southern Intermodal Xpress for the 2011 tax year and then, in conjunction with the City of New Orleans, attempted to sell the properties at a public tax sale when the assessments were not paid. On September 21, 2012, the Port of New Orleans commenced this action against Mr. Williams challenging the 2011 ad valorem property tax assessment and the tax sale undertaken by the City of New Orleans for the delinquent taxes. On September 24, 2012, the trial court enjoined the tax sales that were scheduled for September 25, 2012.

On November 28, 2012, the Port of New Orleans filed a motion for partial summary judgment arguing that Art. VII, § 21(A) of the Louisiana Constitution of 1974 provides an exemption for " public property used for public purposes." Specifically, the Port of New Orleans argued that it should be exempt from ad valorem taxes because (1) it owns the land and improvements, and (2) its third-party lessees use the improvements for public purposes, namely to provide state of the art warehousing, freight forwarding, and intermodal transportation services that contribute to the fulfillment and execution of its public mission and statutory [2013-0881 La.App. 4 Cir. 3] obligation to maintain, develop, and promote the commerce and traffic of the port and harbor of New Orleans. In support of its partial motion for summary judgment, the Port of New Orleans attached the following exhibits: (1) the affidavit of Patrick J. Gallwey, the Chief Operating Officer of the Port of New Orleans; (2) an article on " The Economic Impact of the Ports of Louisiana" (March 2012); (3) The Port of New Orleans Overview; (4) The Kearney Companies lease; (5) the Southern Intermodal Xpress lease; (6)The Kearney Companies website[1]; (7) Southern Intermodal Xpress website[2]; (8) copies of the Notices of Tax Sale; and (9) copies of the revised 2011 tax bill.

On December 14, 2012, the trial court granted in part the Port of New Orleans's partial motion for summary judgment and ordered " that the improvements at issue... will be found to be exempt from ad valorem taxation... if the Port is able to show that those improvements are (1) public property and (2) used for a public purpose." [3]

On January 18, 2013, the Port of New Orleans filed a renewed motion for summary

Page 824

judgment essentially making the same arguments as it did in its motion for partial summary judgment. The Port of New Orleans attached the same eight exhibits used in its earlier filed motion for partial motion for ...


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