JOHNSON COUNTY PROPERTY TAX ASSESSMENT BOARD OF APPEALS and the JOHNSON COUNTY ASSESSOR, Petitioners,
KC PROPCO LLC d/b/a KINDERCARE LEARNING CENTER, Respondent
ATTORNEY FOR PETITIONERS: DUSTIN D. HUDDLESTON, HUDDLESTON & HUDDLESTON, Franklin, IN.
ATTORNEYS FOR RESPONDENT: MICHAEL H. MICHMERHUIZEN, JOSHUA C. NEAL, BARRETT & McNAGNY, LLP, Fort Wayne, IN.
ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA BOARD OF TAX REVIEW
In this case, the Court is asked to examine whether the Indiana Board of Tax Review erred when it determined that the real property of KC Propco LLC d/b/a KinderCare Learning Center (KC Propco) qualified for an educational purposes exemption for the 2009 tax year. The Court finds that the Indiana Board did not err.
FACTS AND PROCEDURAL HISTORY
KC Propco owns the Greenwood KinderCare facility located at 980 South State Road 135, Greenwood, Indiana. The property consists of a 6,959 square foot building and associated parking space situated on a 2.607 acre lot. (See Cert. Admin. R. at 12-13.)
In May of 2009, KC Propco filed an Application For Property Tax Exemption on the subject property, claiming it was entitled to the educational purposes exemption
set forth in Indiana Code § 6-1.1-10-16 because it was owned, occupied, and used as an early learning center for children. (See Cert. Admin. R. at 7-9.) The application also sought to have the exemption extended to the personal property contained within the building. (See Cert. Admin. R. at 7.)
The Johnson County Property Tax Assessment Board of Appeals (PTABOA) denied the exemption application on November 15, 2009. KC Propco appealed the PTABOA's ruling to the Indiana Board.
The Indiana Board Hearing: KC Propco's Case In Chief
During the Indiana Board's July 7, 2011 hearing on the matter, KC Propco presented, among other things, the testimony of David Benedict and Connie Mortensen, employees of its parent company, the Knowledge Learning Corporation. (See generally Cert. Admin. R. at 136-40, 327-29.) They explained that:
KinderCare Learning Centers, formed in 1969, is a Delaware corporation that operates early education facilities throughout the country;
In 2003, KinderCare Learning Centers formed KC Propco as its real estate acquisition and development arm;
In 2005, KC Propco acquired the subject property; KinderCare Learning Centers renovated the property in accordance with its specifications and has operated the facility as the Greenwood KinderCare since then;
That same year (i.e., 2005), KinderCare Learning Centers was acquired by Knowledge Learning Corporation;
Since 2005, KC Propco, KinderCare Learning Centers, and Knowledge Learning Corporation have all operated out of, and maintained the same corporate office in, Portland, Oregon.
See, e.g., Cert. Admin. R. at 136, 330-31, 387-88, 396-401, 477-78, 489-91.) (See also Cert. Admin. R. at 185-235.) Mortensen testified that after 2005, KC Propco, KinderCare Learning Centers, and Knowledge Learning Corporation considered themselves to be " all the same." (See Cert. Admin. R. at 329-30, 387, 439, 472, 491-92.)
KC Propco also provided evidence about how the subject property was used in 2009. For example, between 8:30 a.m. and 4:30 p.m. each Monday through Friday, the Greenwood Kindercare administered both an accredited, age-appropriate curriculum for children under the age of five, as well as a state-licensed full-day kindergarten. (See, e.g., Cert. Admin. R. at 332-49, 358-67, 372, 395.) The teachers who administered these programs had credentials ranging from high school diplomas with field experience (i.e., previous employment at another early learning center or college-level early childhood classwork) to post-college early education coursework. (See Cert. Admin. R. at 141, 405-12.)
Generally, the pre-kindergarten curriculum was designed to develop and refine children's cognitive, motor, language, and computer skills. (See, e.g., Cert. Admin. R. at 101-02, 136-38, 360.) In addition, the curriculum was specifically tailored for each child in attendance to address his specialized needs and level of development. (See, e.g., Cert. Admin. R. at 339, 342.) This basic pre-kindergarten curriculum was adjusted for the kindergarten students to ...