CBCA 5269

GRANTED IN PART: October 31, 2019 CBCA 5269, 5659 NOAA MARYLAND, LLC, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Diana Parks Curran and Hadeel N. Masseoud of Curran Legal Services Group, Inc., Jones Creek, GA, counsel for Appellant. James F. H. Scott, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Judges HYATT, KULLBERG, and RUSSELL. RUSSELL, Board Judge. Appellant, NOAA Maryland, LLC (NOAA Maryland), has appealed the General Services Administration’s (GSA) decision denying NOAA Maryland’s claim for reimbursement of four taxes pursuant to the Tax Adjustment clause of a lease entered into between NOAA Maryland and GSA. The clause defines “real estate taxes” for which GSA is financially responsible. The Board finds that two of the four disputed taxes (designated for stormwater management and transportation) fall under the clause’s definition of a real estate tax and, therefore, fall under GSA’s obligation to pay them. However, the other two CBCA 5269, 5659 2 disputed taxes (designated for education and a clean water fund) fall under an exception in the clause, making GSA not obligated to reimburse them. Therefore, we grant the appeal in part. Background I. The Lease In September 2005, GSA executed a thirteen-year lease with NOAA Maryland’s predecessor in interest to rent property in Prince George’s County, Maryland. The lease was assigned to NOAA Maryland in December 2011. Under the lease, GSA agreed to pay real estate taxes as defined in the lease’s Tax Adjustment clause: Real estate taxes . . . are only those taxes, which are assessed against the building and/or the land upon which the building is located, without regard to benefit to the property, for the purpose of funding general Government services. Real estate taxes shall not include, without limitation, general and/or special assessments, business improvement district assessments, or any other present or future taxes of governmental charges that are imposed upon the Lessor or assessed against the building and/or the land upon which the building is located. The Tax Adjustment clause also requires GSA to “pay its share of tax increases or . . . receive its share of any tax decrease based on the ratio of the rentable square feet occupied by the Government to the total rentable square feet in the building.” The Government’s percentage of occupancy within the subject building for the purpose of calculating future tax adjustments was 100% of the building’s total rentable square footage. II. The Appeals On April 6, 2016, NOAA Maryland filed an appeal with the Board challenging GSA’s decision denying NOAA Maryland’s request to be reimbursed $282,491.77 for taxes designated for Stormwater/Chesapeake Bay Water Quality (Stormwater Tax), the Washington Suburban Transit Commission (Transportation Tax), a Clean Water Act Fee (Clean Water Tax), and education (Education Tax). This appeal was docketed as CBCA 5269. On October 27, 2016, NOAA Maryland submitted a revised request for a final decision to GSA for an additional $70,568.82 for the tax year of July 2016 to June 2017 – increasing its total claim to $353,060.59. With no reply to its request, on March 1, 2017, CBCA 5269, 5659 3 NOAA Maryland filed with the Board an appeal from a deemed denial. This second appeal and NOAA Maryland’s first appeal were consolidated. After denying NOAA Maryland’s request for summary relief, the Board held a hearing on April 2, 2019. III. Disputed Taxes The parties are in agreement that there are four taxes at issue in this dispute: A. Stormwater Tax In 1987, Prince George’s County created a stormwater management district that includes all the land within the county except the city of Bowie, Maryland. See Prince George’s County, Md., Code § 10-262(a) (2019). The county imposes “a direct ad valorem tax” on all property assessed for tax purposes within the district to pay for stormwater management operations and activities. Id. § 10-263(a). The tax also pays for costs associated with bonds issued by the county and the Washington Suburban Sanitary Commission. Id. According to the county’s code, the stormwater tax is to be “levied and collected in the same manner . . .