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Written by James Crowley, Esq., Bureau of Municipal Finance Law

 

If you have ever traveled to Cape Cod, you may have heard of the Cape Cod National Golf course, an 18-hole championship golf course located in the communities of Harwich and Brewster. When the owners of the course failed to convince both towns’ boards of assessors to classify the property as Chapter 61B recreational land, which would mean reduced taxes; there were appeals to the Appellate Tax Board(ATB). The ATB issued its decision this summer in the case: Cape Cod Five Cents Savings Bank and William R. Enlow as Trustees of the John R. Pfeffer Family Trust and Cape Cod National Golf Foundation, Inc. v. Boards of Assessors of Harwich and Brewster, (ATB docket #F277365, July 17, 2009).

 

The trustees held title to approximately 151 acres of land of which 70 acres were located in Brewster and 81 acres were located in Harwich. About 90 acres of the subject property were used as a golf course. In addition, the Cape Cod Commissionrequired the trustees to maintain 50 acres of the parcel as a wooded wildlife habitat. Buildings in Brewster consisted of a clubhouse, the golf pro’s residence and a maintenance building. Located in Harwich were a barn, a pump house to irrigate the golf course and restroom facilities.

 

The trustees tried to obtain recreational classification in fiscal years 2001 to 2004. During this time frame, the trustees leased the property to the Cape Cod National Golf Club, LLC (Club)which managed the property. The parcel could only be used by members of the Club and guests at the Wequassett Inn. Both boards of assessors rejected the applications for Chapter 61B status on the grounds that the subject property was not available to the general public as required by statute. The trustees appealed to the ATB, but then signed a written agreement in August 2004 with both boards of assessors not to pursue their claims for fiscal years 2001 to 2004. The trustees also agreed in writing not to apply for Chapter 61B status in future years for so long as the golf course was presently organized.

 

The importance of the latter provision became apparent in September 2004 when the Club conveyed its leasehold interest in the subject property to the Cape Cod National Golf Foundation, Inc. (Foundation), which was a Florida nonprofit corporation organized in April 2004 for very general charitable purposes. The bylaws of the Foundation stated that members of the Club were to be considered non-voting members of the Foundation. Conversely, all members of the Foundation were also members of the Club. The bylaws made the golf course available only to the members of the Club and to guests of the Wequassett Inn. Even though the Foundation was technically the lessee, the Club continued to manage the golf course and received revenue from Club memberships, greens fees, charges paid by patrons of the Wequassett Inn, and sales at the pro shop and clubhouse restaurant.

 

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