Deutsches Land, Inc. v. City of Glendale , 225 Wis. 2d 70 ( 1999 )

ANN WALSH BRADLEY, J.

¶1. The petitioner, Deutsches Land, Inc. (Deutsches Land) seeks review of a published decision of the Court of Appeals¹ which reversed the circuit court's grant of exemptions from real property taxes. Deutsches Land argues that as a benevolent association its property is entitled to exemption from Wisconsin property taxes under Wis. Stat. § 70.11 (1995-96).² Because we find that Deut-sches Land has not offered sufficient evidence to support its requested exemptions, we affirm the court of appeals.

¶ 2. Deutsches Land is a non-stock, non-profit corporation organized in 1967 under chapter 181 of the Wisconsin Statutes. It primarily serves as a holding corporation for the real estate and fixed assets of five incorporated non-stock, non-profit benevolent associations. See Internal Revenue Code § 501(c)(2). These five benevolent associations — DWendelstoana (dancing), D'Oberlandler (dancing), Gesang Verein Bavaria (singing), Vergnuegungs Club (social), and the Bavarian Soccer Club (soccer) (collectively, "the benevolent associations") — exist for the purpose of preserving Germanic heritage and culture.

¶ 3. For the benefit of the benevolent associations, Deutsches Land holds title to roughly 14 acres of property located in the City of Glendale. Though the property officially comprises a single parcel, Deutsches Land treats this 14-acre property as if it were four "lots."³ Two of the lots have buildings upon them and the remaining two lots, totaling approximately five and one half acres, are soccer fields.

¶ 4. One of the two lots containing buildings is called "Old Heidelberg Park" which covers almost four and a half acres. Old Heidelberg Park is the site at which the benevolent associations conduct two major public festivals, Volksfest and Oktoberfest. These festivals are a significant source of fund-raising income for the benevolent associations. Additionally, a 12,000 square foot "Fest Hall" and other minor outbuildings are located in Old Heidelberg Park. Any one of the benevolent associations may use the park and the Fest Hall. In the winter months, the Fest Hall is used at various times by the soccer club for indoor practice.

¶ 5. While Deutsches Land does not officially lease the park to any entity, Deutsches Land allows Bavarian Waldhaus, Inc. (Waldhaus) to use it on approximately 20 occasions annually. Waldhaus is a for-profit corporation created by the benevolent associations to isolate their for-profit activities and owned by the benevolent associations in five equal shares. On those 20 yearly occasions, Waldhaus uses the park to host corporate picnics at which it supplies the food and beverage. The corporations that arrange with Waldhaus to hold their event in Old Heidelberg Park do not need to be, and as a rule are not, affiliated with the benevolent associations in any way.

¶ 6. The Bavarian Inn lot of four acres contains a parking area for the entire 14-acre parcel as well as a significant structure that houses the Bavarian Inn restaurant, which is a full-service, for-profit bar and banquet facility open to the general public. The Bavarian Inn building has two floors. The main floor contains a bar, dining area, and banquet hall in addition to the kitchen, rest rooms, coatroom, and other miscellaneous space associated with a restaurant. The lower floor, which is accessible both from the main floor and from a separate outdoor entrance, is divided into three more banquet rooms (named the "Rathskeller," "Weinstube," and "Edelweiss"), the offices of the Bavarian Inn, and a storage area for the benevolent associations.

¶ 7. Though Deutsches Land owns the land on which the Bavarian Inn sits as well as the building itself, it contracts with Waldhaus to operate the Bavarian Inn restaurant. Waldhaus has in the past entered into a formal lease with Deutsches Land for the entire Bavarian Inn building, although the lease terms required Waldhaus to allow the benevolent associations to use any part of the facility without charge. The last formal lease expired in 1990. However, the relationship between Waldhaus, the benevolent associations, and Deutsches Land has remained essentially the same since that time.

¶ 8. The record, though not altogether clear, indicates that most areas of the Bavarian Inn are used at certain times by members of the benevolent associations and at other times by Waldhaus. For example, while the benevolent associations most often use either the Rathskeller, Weinstube, or Edelweiss for their gatherings, it is not uncommon for them to also use the banquet hall on the main floor. Similarly, while Waldhaus normally uses the facilities on the main floor, it is not uncommon for Waldhaus to occupy the Rathskeller, Weinstube, or Edelweiss for banquets. The record indicates that the only space in the Bavarian Inn used solely by the benevolent associations is the storage area in the lower level of the building. All other areas are used both by Waldhaus and the benevolent associations.

¶ 9. Although this arrangement between Deut-sches Land and Waldhaus has been in place since 1967, Deutsches Land first sought an exemption from Wisconsin property taxes in 1993. Specifically, Deutsches Land now seeks a full exemption for the soccer fields and Old Heidelberg Park and a 25% exemption for the Bavarian Inn building for the years of 1993-95. Glendale denied the applications and Deutsches Land filed suit in the Circuit Court of Milwaukee County. The circuit court ruled that Deutsches Land was entitled to a full exemption on the soccer fields and Old Heidelberg Park and a 25% exemption for the Bavarian Inn building.⁴

¶ 10. Glendale appealed and the court of appeals reversed. The court of appeals determined that Deut-sches Land had not satisfied the "used exclusively" requirement of Wis. Stat. § 70.11(4) and thus could not receive an exemption for Old Heidelberg Park and the Bavarian Inn lot. Citing the same subsection, it also concluded that there was no evidence in the record that the soccer fields were necessary for the location and convenience of any building that was exempt from taxation. Accordingly, it held that Deutsches Land was not entitled to a real property tax exemption on any of its property.

¶ 11. In asking this court to rule that it is entitled to an exemption from real property taxes, Deutsches Land necessarily requires us to construe Wis. Stat. § 70.11. The construction of statutes is a question of law which we review independent of the legal conclusions reached by the circuit court and court of appeals. Colby v. Columbia County, 202 Wis. 2d 342, 349, 550 N.W.2d 124 (1996). While we grant deference to the circuit court's factual findings, we review de novo the application of those facts to the law. Peplinski v. Fobe's Roofing, Inc., 193 Wis. 2d 6, 19, 531 N.W.2d 597 (1995).

¶ 12. In interpreting statutes, our primary purpose is to give effect to the legislature's intent. State ex rel. Angela M.W. v. Kruzicki, 209 Wis. 2d 112, 121, 561 N.W.2d 729 (1997). To this end, we look first to the language of the statute, and if that language is unambiguous, we construe the statute in accordance with its ordinary meaning. If, on the other hand, the statutory language is ambiguous, we look to the legislative history in order to ascertain both the legislature's purpose for enacting the statute and its intent as to the statute's meaning. Stockbridge School Dist. v. Department of Public Instruction, 202 Wis. 2d 214, 219, 550 N.W.2d 96 (1996).

¶ 13. In Wisconsin, the taxation of property is the rule and exemption is the exception. Engineers & Scientists of Milwaukee, Inc. v. City of Milwaukee, 38 Wis. 2d 550, 553, 157 N.W.2d 572 (1968); Trustees of Indiana Univ. v. Town of Rhine, 170 Wis. 2d 293, 299, 488 N.W.2d 128 (Ct. App. 1992). In general, we apply a "strict but reasonable construction" to tax exemption statutes. Columbia Hospital Association v. City of Milwaukee, 35 Wis. 2d 660, 668, 151 N,W.2d 750 (1967); Madison Aerie No. 623 F. O. E. v. City of Madison, 275 Wis. 472, 476, 82 N.W.2d 207 (1957). Since exemption from the payment of taxes is an act of legislative grace, the party seeking the exemption bears the burden of proving that it falls within a statutory exemption. Pul-sfus Farms v. Town of Leeds, 149 Wis. 2d 797, 811, 440 N.W.2d 329 (1989). Consequently, any doubt under the "strict but reasonable" construction rule must be resolved against the party seeking the exemption. Columbia Hospital, 35 Wis. 2d at 668.

Old Heidelberg Park

¶ 14. The bulk of Wis. Stat. § 70.11 delineates organizations and institutions that have the possibility of an exemption. As a threshold requirement, an organization that seeks an exemption under § 70.11 must fall within one or more of the specified categories outlined in the statute. See Frank Lloyd Wright Foundation v. Town of Wyoming, 267 Wis. 599, 606-08, 66 N.W.2d 642 (1954).

¶ 15. Deutsches Land seeks a total exemption from real property taxes on Old Heidelberg Park and the Fest Hall. It claims that it is entitled to such an exemption under Wis. Stat. § 70.11(4). The relevant statutory language is as follows:

70.11 Property exempted from taxation. The property .described in this section is exempted from general property taxes....

(4) EDUCATIONAL, RELIGIOUS AND BENEVOLENT INSTITUTIONS; WOMEN'S CLUBS; HISTORICAL ASSOCIATIONS; FRATERNITIES; LIBRARIES. Property owned and used exclusively by. . .educational or benevolent associations,. . .but not exceeding 10 acres of land necessary for location and convenience of buildings while such property is not used for profit....

¶ 16. We have on prior occasions stated that, to qualify for a total exemption under Wis. Stat. § 70.11(4), an organization must show three facts: (1) that it is a benevolent organization, (2) that it owns and exclusively uses the property, and (3) that it uses the property for exempt purposes. See Milwaukee Protestant Home v. City of Milwaukee, 41 Wis. 2d 284, 293, 164 N.W.2d 289 (1969). Both Deutsches Land and Glendale are in agreement that the five associations noted above are benevolent associations for purposes of Wis. Stat. § 70.11(4).⁵ However, the parties' agreement goes no further. Specifically, Glendale and Deutsches Land are in disagreement over the requirements that the property be "used exclusively" for "exempt purposes."

¶ 17. Glendale argues that Deutsches Land has not satisfied the "used exclusively" requirement of Wis. Stat. § 70.11(4) because Waldhaus used the park to host for-profit corporate picnics on approximately 20 occasions annually. The court of appeals agreed, stating that

[sjection 70.11(4), Stats., requires as a condition to the tax exemption it grants to "benevolent associations" that the property be "used exclusively by" those benevolent associations and not for profit. This condition is not ambiguous: the term "exclusively" brooks no exceptions.

Deutsches Land, 215 Wis. 2d at 554 (citations omitted). While the court of appeals' "brooks no exceptions" statement is an appealing rhetorical pronouncement, we ultimately cannot agree with such an interpretation.

¶ 18. The fact of the matter is that we have brooked exceptions to the requirement that exempted property be exclusively used by the benevolent organization so that the "plain intent of the statute" is not frustrated. Catholic Woman's Club v. City of Green Bay, 180 Wis. 102, 105, 192 N.W. 479 (1923). In Northwestern Publishing House v. City of Milwaukee, 177 Wis. 401, 408-09, 188 N.W. 636 (1922), we concluded that the phrase "used exclusively" did not preclude a religious association from occasionally engaging in commercial publishing where that publishing constituted less than one percent of its business. Similarly, in Cardinal Publishing Co. v. City of Madison, 205 Wis. 344, 347-48, 237 N.W. 265 (1931) (Cardinal Publishing I), we determined that "used exclusively" did not preclude "inconsequential or incidental uses of the property for gain." See also Columbia Hospital, 35 Wis. 2d at 671.

¶ 19. If our construction of the phrase "used exclusively" has brooked some exceptions, those exceptions have not swallowed the rule. In Gymnastic Association of the South Side of Milwaukee v. City of Milwaukee, 129 Wis. 429, 109 N.W. 109 (1906), we concluded that the Gymnastic Association did not exclusively use their entire property when they leased out portions of the building to the purveyors of a public saloon and barbershop. We noted a legitimate distinction between use that is "incidental to and promotive of the main purpose for which a building is primarily devoted and the permanent leasing of parts of the building for uses having no relation to the owner's principal purpose."⁶ Id. at 437. Similarly, in Cardinal Publishing Co. v. City of Madison, 208 Wis. 517, 519, 243 N.W. 325 (1932) (Cardinal Publishing II), we stated that commercial publishing income of roughly ten percent of an exempt organization's total income "cannot be claimed as incidental, negligible, or inconsequential" and, as a result, the property was not used exclusively under the statute.

¶ 20. In general, the relevant question is this: How consequential was the questionable activity when compared to the total activity on the property? See, e.g., Cardinal Publishing I, 205 Wis. at 347; Cardinal Publishing II, 208 Wis. at 519. This fact-specific question can only be answered on a case-by-case basis.

¶ 21. We have, on prior occasions, held that the proper comparison is actual non-exempt use as against actual exempt use. Alonzo Cudworth Post No. 23 v. City of Milwaukee, 42 Wis. 2d 1, 13, 165 N.W.2d 397 (1969); see also Trustees of Clinton Lodge v. Rock County, 224 Wis. 168, 172, 272 N.W. 5 (1937). Requiring a benevolent association to show how the property is actually used is merely a part of the association's burden to show that it falls "within the terms of the exemption." Alonzo Cudworth, 42 Wis. 2d at 13 (quoting Methodist Episcopal Church Baraca Club v. City of Madison, 167 Wis. 207, 167 N.W. 258 (1918)). In order to sustain its burden of proof, Deutsches Land must show its actual exempt use.

¶ 22. Benevolent ownership of property is not enough to satisfy the dictates of Wis. Stat. § 70.11(4); benevolent use of that property is also required. State ex rel. State Ass'n. of Y.M.C.A. v. Richardson, 197 Wis. 390, 392, 222 N.W. 222 (1928); Dominican Nuns v. City of La Crosse, 142 Wis. 2d 577, 581, 419 N.W.2d 263 (Ct. App. 1987). Just as a benevolent association can own title to property without actually using it for benevolent purposes, a benevolent association can own title to property without actually using it at all. See, e.g., Green Bay & Mississippi Canal Co. v. Outagamie County, 76 Wis. 587, 591, 45 N.W. 536 (1890). In either case, the benevolent association is not entitled to an exemption from property taxes. See, e.g., Men's Halls Stores, Inc. v. Dane County, 269 Wis. 84, 69 N.W.2d 213 (1955); Green Bay & Mississippi Canal Co., 76 Wis. at 591. It is therefore necessary for a benevolent association to detail its use of the property so that tax assessors know what types of activities, if any, are occurring on the property.

¶ 23. In many situations a benevolent association will demonstrate that its use of the property is so pervasive that the association should be treated as if it is in continual use of the property. That is to say, a school will likely not receive only a 75% exemption because classes are not held in the summer months. While such treatment may not be unusual, it is not as the dissent would have it automatic. Dissent at 114, 119. As with every aspect of property tax exemptions, the burden to demonstrate the use of the property lies with the party seeking the exemption. See Pulsfus Farms, 149 Wis. 2d at 811; Alonzo Cudworth, 42 Wis. 2d at 13; Methodist Episcopal Church Baraca Club, 167 Wis. at 211. The benevolent association that uses its property only occasionally and allows it to lie fallow at all other times will have any exemption reflect its actual usage. Similarly, the benevolent association that uses it property only occasionally and allows others to use it for profit at other times will have any exemption reflect its actual usage.

¶ 24. Deutsches Land maintains, and the dissent agrees, that its use of Old Heidelberg Park is so pervasive that the occasional use of the park for corporate picnics is inconsequential. That may in fact be the case, but it is not so based on this record.⁷

¶ 25. Deutsches Land argues that the 20 days of corporate use ought to be measured against the remaining 345 days of the year. To substantiate its claim that the corporate use of the park consisted of approximately 20 occasions annually, Deutsches Land properly proffered copies of business records reflecting this usage. From these records, Glendale and the circuit court obtained concrete information upon which to base this part of the calculation. However, to substantiate its claim that the benevolent societies' use of the park was so pervasive so as to be calculated at 345 days, Deutsches Land offered only the testimony of benevolent association members who made generalized assertions about the associations' use. Although apparently it keeps a calendar and other records of the park's usage, Deutsches Land did not attempt to solidify those generalized assertions by introducing those records or reports generated from those records. As a result, Glendale and the circuit court could do nothing but speculate on the actual benevolent use of the park.

¶ 26. As is more fully detailed in the discussion of the Bavarian Inn below, such unsupported opinion testimony, absent more, insufficiently demonstrates the actual use of the property in order to satisfy Wis. Stat. § 70.11. Deutsches Land offered sufficient evidence of only the actual corporate use of Old Heidelberg Park; it did not do so for the actual benevolent use of the park.

¶ 27. Alonzo Cudworth dictates that Deutsches Land is not entitled to an exemption for Old Heidelberg Park or the Fest Hall on this record. 42 Wis. 2d at 13. In allowing such exemption, the dissent overrules Alonzo Cudworth sub silentio and replaces it instead with a "benevolent control" test. Dissent at 110 — 111. It is unclear where the dissent derives its contention that exercising "control" of property entitles a benevolent association to an exemption. Such a new test is not supported by our existing case law.

¶ 28. We have repeatedly stressed that a benevolent association must do more than own or control property to claim an exemption; it must also use that property for benevolent purposes. See, e.g., Alonzo Cudworth, 42 Wis. 2d at 12-13; Men's Halls Stores, Inc., 269 Wis. at 89; Clinton Lodge, 224 Wis. at 172-73; Richardson, 197 Wis. 2d at 392; Green Bay & Mississippi Canal Co., 76 Wis. at 591; Evangelical Lutheran Synod, 125 Wis. 2d at 545 n.3; Dominican Nuns, 142 Wis. 2d at 581. The dissent's alteration of our longstanding precedent is unwarranted. Deutsches Land, like any other entity seeking an exemption, must show that its actual use of the property was for benevolent purposes. On this record, Deutsches Land did not adequately make this showing and the exemption must be denied.

Bavarian Inn

¶ 29. Deutsches Land also sought a property tax exemption on its activities at the Bavarian Inn. It recognized that Waldhaus' for-profit activity at the Bavarian Inn meant that the Inn did not qualify for a total exemption. Instead, Deutsches Land sought a partial exemption of 25% of the building based on the activities that the benevolent associations conduct at the Bavarian Inn. Deutsches Land claimed its entitlement to a partial exemption under Wis. Stat. § 70.11(8),⁸ which provides in relevant part:

(8) TAXED IN PART. Property that is exempt under this section and that is used in part in a trade or business for which the owner of the property is subject to taxation under sections 511 to 515 of the internal revenue code, as defined in s. 71.22(4m), shall be assessed for taxation at that portion of the fair market value of the property that is attributable to the part of the property that is used in the unrelated trade or business. This subsection does not apply to property that is leased by an exempt organization to another person... ,⁹

¶ 30. Since 1931, this state has recognized the ability of an exempt organization to receive a property tax exemption on only part of its property. See § 2, ch. 302, Laws of 1931. Under the statutory scheme in place from 1931 until 1991, determining the taxable part of an exempt organization's property was accomplished by calculating how much of the property was used for "pecuniary profit." See Wis. Stat. § 70.11(8) (1989-90); Trustees of Clinton Lodge, 224 Wis. at 171-173.

¶ 31. However, in 1991, the legislature repealed the "taxed in part" subsection and recreated it with the language that appears above. 1991 Wis. Act 39, § 1706t. Two important changes were instituted by the 1991 recreation. First, the legislature replaced the "pecuniary profit" test with the "unrelated business taxable income" test borrowed from the Internal Revenue Code. As noted in a report from the legislative history, this change was driven by a legislative desire to remove advantages that exempt organizations were perceived to have under the pecuniary profit test:

[t]he primary objective of adopting the unrelated business income tax law was to eliminate a source of unfair competition by placing the unrelated business activities of certain exempt organizations upon the same tax basis as the nonexempt business endeavors with which they compete.

Report: Shared Revenue, Property Taxes and Tax Relief, p. 5. (drafting file, 1991 Wis. Act 39, § 1706t).

¶ 32. Second, the legislature made Wis. Stat. § 70.11(8) inapplicable where an exempt organization leases its property. The inescapable conclusion drawn from the language of subsection (8) is that an exempt organization that leases a portion of its property cannot claim a partial exemption under subsection (8).

¶ 33. These two changes are embodied in the post-1991 versions of the Property Assessment Manual for Wisconsin Assessors (Assessment Manual) published by the Department of Revenue.¹⁰ The Assessment Manual describes what constitutes unrelated business taxable income and offers examples of activities that are considered for-profit and taxable. See Assessment Manual, 22-6, 22-7 (revised 12-95). Notably, the examples offered in the Assessment Manual demonstrate that Wis. Stat. § 70.11(8) does not apply to situations where an exempt organization leases a part of its property to another entity that engages in for-profit activity.¹¹ Rather, subsection (8) applies to those situations where the exempt organization itself engages in the for-profit activity.

¶ 34. In such situations, the Department of Revenue, pursuant to its charge of interpreting and applying Wis. Stat. § 70.11(8), has set forth three methods of calculating a partial exemption under subsection (8). Where only a defined and segregated part of the property is used in for-profit activities, the partial exemption can be calculated by subtracting the square footage of that part of the property used in the for-profit activity from the square footage of the entire property. Assessment Manual, 22 — 6,22—7. Conversely, where the entire property is used part of the time in for-profit activities, the partial exemption can be calculated in one of two ways. The partial exemption can either be determined by comparing the percentage of income attributable to the for-profit activity versus the total income of the exempt organization, or by comparing the percentage of time attributable to the for-profit activity versus the total time the property is used. Id.

¶ 35. An exempt organization's ability to get a partial exemption under the recreated Wis. Stat. § 70.11(8) is substantially limited by that subsection's "no lease" sentence. However, both the testimony of the City of Milwaukee's chief assessor, Peter Weissen-fluh,¹² and the joint amicus brief of the City of Milwaukee, the League of Wisconsin Municipalities, and the Wisconsin Association of Assessing Officers ("the joint amici"), indicate that assessors who process partial exemption applications look beyond subsection (8) in their analysis. According to Weissenfluh and the joint amici, it is the well-established practice and the standard methodology of assessors in this state to look additionally to the introductory phrase of § 70.11, which is also referred to by the parties as the "preamble." The relevant language is as follows:

70.11 Property exempted from taxation. The property described in this section is exempted from general property taxes. Leasing a part of the property described in this section does not render it taxable if the lessor uses all of the leasehold income for maintenance of the leased property, construction debt retirement of the leased property or both and if the lessee would be exempt from taxation under this chapter if it owned the property. Any lessor who claims that leased property is exempt from taxation

under this chapter shall, upon request by the tax assessor, provide records relating to the lessor's use of the income from the leased property. (Emphasis added.)

¶ 36. Construing what we refer to as the "preamble partial exemption provision" is a matter of first impression for this court. The preamble does not explicitly allow an exempt organization to lease a part of its property to a for-profit organization and still maintain the exemption on the non-leased part. However, that consequence reasonably follows from the expressed language.

¶ 37. The preamble language states that an exempt organization may lease a part of its property and still be exempt from property taxes on that leased part so long as certain conditions are met. Those conditions are (1) the exempt organization must use the leasehold income for maintenance of the property, construction debt retirement, or both (the "rent use condition") and (2) the lessee would itself be entitled to an exemption if it owned the property (the "lessee identity condition"). If the exempt organization uses the rental income in ways other than provided for by the statute, no exemption can be claimed on the leased part of the property. Likewise, if the lessee itself is not an exempt organization but rather a for-profit organization, no exemption can be claimed on the leased part of the property.

¶ 38. Under the preamble to Wis. Stat. § 70.11, an exempt organization that leases a part of its property retains a total exemption so long as it meets both the rent use condition and the lessee identity condition.¹³ Consequently, if a lease by an exempt organization fails either of these two conditions, the exempt organization loses its total exemption but retains a partial exemption on the property that is not leased.

¶ 39. In reality, the only material distinction between the Wis. Stat. § 70.11(8) partial exemption provision and the preamble partial exemption provision is whether a lease is in existence. If a lease is not present, the exempt organization should seek a partial exemption under subsection (8). Conversely, if a lease is present, the exempt organization should seek a partial exemption under the preamble. In other respects — such as sufficiency of proof — partial exemptions are treated the same whether they are derived from the preamble or § 70.11(8).

¶ 40. According to the brief of the joint amici and the testimony of Weissenfluh, the methodologies set forth in the Assessment Manual for calculating a partial exemption under Wis. Stat. § 70.11(8) are the same methodologies used by assessors for calculating a partial exemption under the preamble. Therefore, under either the preamble or subsection (8), the amount of the partial exemption can be determined by calculating the percentage of space or time used in for-profit activities or the percentage of income that is attributable to the for-profit activity. See Assessment Manual, 22-6, 22-7.

¶ 41. The dissent fails to discern that in practical terms, the existence of a lease makes little difference in the ultimate determination of whether an organization is entitled to a partial exemption. It contends that if a lease were present, Deutsches Land would be ineligible for an exemption under either Wis. Stat. § 70.11(8) or the § 70.11 preamble. Dissent at 118 n.7. This misses the full purpose of the preamble. If the dissent were correct, a benevolent association could only lease "a discrete part" — apparently meaning a discrete geographical part of its property — without completely destroying its exemption. Id. According to the dissent, the benevolent association that leases the entire geography of its property only part of the time (and uses the entire geography of its property the balance of the time) does not lease its property "in part" and therefore cannot hope to claim any exemption.

¶ 42. Curiously, the dissent fails to articulate why the word "part" in the preamble only references a geographic subdivision of the benevolent association's property. "Part" is not so limited by its context in the preamble. Moreover, the word "part" in Wis. Stat. § 70.11(8) encompasses a broader meaning than the dissent is willing to attribute to it as seen in the word's interpretation in the Assessment Manual, 22-7. Why should the legislature's use of "part" in the preamble be treated differently than its use of "part" in § 70.11(8)? The dissent fails to offer an answer.

¶ 43. Additionally the dissent's interpretation, aside from its failure to consider the language of the preamble and its relationship with Wis. Stat. § 70.11(8), would have serious practical repercussions for many exempt organizations in this state. For example, under the dissent's interpretive scheme, one of the three benevolent organizations Peter Weissenfluh identified at trial as offering sufficient documentation for its exemption application would in future years nonetheless be categorically ineligible for any exemption whatsoever because it leased its entire property to a for-profit entity at limited times while úsing the property for its activities at all other times. The dissent leaves a whole category of benevolent organizations ineligible to obtain any sort of exemption — full or partial — in the future. That approach represents a significant and unwarranted departure from both the statutory provisions as well as the current practices.

¶ 44. Regardless of which of the two partial exemption provisions is applicable in a particular case, the organization seeking the exemption retains the burden to show that it has satisfied the evidentiary requirements of the statute. On this record, Deutsches Land did not sufficiently prove its entitlement to a partial exemption under either of the two partial exemption provisions. It sought and received from the circuit court a 25% exemption on the Bavarian Inn building based primarily on two facts: the square footage of the main and lower floors of the Bavarian Inn and the testimony by the general manager of the Bavarian Inn detailing the percentage of usage by the benevolent associations. These evidentiary offerings are not sufficient to entitle Deutsches Land to a partial exemption.

¶ 45. First, since the record reflects that both the main and lower floors were used by both the benevolent associations and Waldhaus, both floors were used for exempt and for for-profit activity.¹⁴ Therefore, under these facts, comparing the square footage of the main floor with the square footage of the lower floor does not provide support for its claim of exemption.

¶ 46. Second, Deutsches Land's evidence of the Bavarian Inn's percentage of for-profit use did not adequately demonstrate how the Inn was actually used. Deutsches Land's evidence primarily consisted of the testimony of the general manager of the Bavarian Inn. She testified that every facility in the Inn was used at least part of the time by the public. In opining that the benevolent associations used approximately 40% of the Bavarian Inn and the public used approximately 60%, she relied on her general observations and recollections. Reviewing an excerpt of her testimony demonstrates its deficiencies:

Q. Do you keep any records of how many events these clubs as clubs have in the — the main banquet room...?

A. Yes, I do.

Q. How does that break down as between the use by the public?

A. For the ballroom only?

Q. For the ballroom only.

A. I really don't have that, you know, the knowledge right now. I'd have to look at my records.

¶ 47. The general manager's opinion of 40% exempt use and 60% for-profit use was not documented by supporting evidence. Rather, as the general manager herself stated, it was based entirely on her "observations" from a year of employment as the Bavarian Inn's general manager. While the general manager hinted that her observations were informed by business records, Deutsches Land did not offer into evidence any records or any reports created from those records. Unfortunately, as this record exists, we are left with no way to know how accurately the general manager's memory corresponds with the actual usage.

¶ 48. The insufficiency of Deutsches Land's evidence is amplified when it is compared to the evidence other exempt organizations have proffered to support their applications for partial exemptions. At trial, Chief Assessor Weissenfluh testified about the documentation certain exempt organizations in Milwaukee have offered to support their applications. A few of the responses are enlightening:

Q. [I]f there were to be 20,000 square feet of usable space in the building, did the [exempt organization] come and say, of that 20,000 square feet available for use in the building, 15,000 square feet or some such number is what is exclusively used for our purposes and 5,000 square feet is devoted to another purpose or something like that?

A. They had it broken down in more detail than that.

Q. In other words, room by room detail?

A. Maybe not room by room, but banquet hall, museum, gift shop, separate areas of the building specifically with those sizes and with the percentage of time it was used for.

Q. Well now, let me get to the percentage of time. What kind of information did they give you as to percent that supported percentages of time?

A. They actually spelled out the percentages of time that was used for — for for-profit activities and then the corollary would be the not-for-profit, their own use.

Q. And. . .how were you able to determine the question of area of use and degree of use?

A. Again, the — I requested full documentation by the [exempt organization] relative to the amount of space used by the [exempt organization]. And what they gave me was a breakdown of how often the — the—the facility was used, by whom, specifically the [exempt organization], and other not-for-profit organizations....

Q. As I understand it, the applicant for exemption for [the exempt organization's property] provided a calendar which accounted for every minute of every day by every entity; is that correct?

A. That's right, it was a very detailed document.

¶ 49. In comparison, we conclude that the general manager's "recollections" and "observations" fail to satisfy Deutsches Land's burden of proof. An exempt organization must base its claim for an exemption on more than merely unsupported opinion testimony. The circuit court erroneously exercised its discretion in awarding a partial exemption on these facts. Brabec v. Brabec, 181 Wis. 2d 270, 283, 510 N.W.2d 762 (Ct. App. 1993); see also Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981).

Soccer Fields

¶ 50. Deutsches Land sought a full exemption on the soccer fields. It asserts that because those fields are used exclusively by the benevolent soccer organization, they are entitled to a total exemption under Wis. Stat. § 70.11(4).

¶ 51. While the soccer fields may be used exclusively by the soccer club, that fact alone does not automatically dictate an exemption. Wisconsin Stat. § 70.11(4) requires that even if a benevolent association exclusively uses its property for benevolent purposes, the benevolent association is only entitled to an exemption on property "not exceeding 10 acres. . .necessary for location and convenience of buildings while such property is not used for profit."

¶ 52. The exemption of land is tied to, and follows from, the exemption of buildings. This means that land devoid of buildings cannot qualify for an exemption under Wis. Stat. § 70.11(4). See Richardson, 197 Wis. at 392; Green Bay & Mississippi Canal Co., 76 Wis. at 591. Similarly, if no part of a building qualifies for an exemption, then no part of the land "necessary for [the] location and convenience" of that building will qualify for an exemption.

¶ 53. Based on this record, Deutsches Land is not entitled to an exemption on the soccer fields. No building exists on the soccer fields that could reasonably be considered to require such an expanse of land for its necessity and convenience. The dissent contends that a 1,500 square foot locker room/rest room facility that apparently is located near one of the soccer fields satisfies the statute. Dissent at 107-108. It is odd that the dissent is willing to hang its hat on this relatively minor building when the existence of the facility was only tangentially mentioned at trial. Indeed, in its brief to this court Deutsches Land does not even mention this building, let alone contend that it satisfies the dictates of Wis. Stat. § 70.11(4).

¶ 54. It is hard to imagine that expansive soccer fields are "necessary for location and convenience" of a locker room/rest room facility. One would reasonably assume that such a facility was constructed for the convenience of the soccer fields and not the other way around. However, the statute does not allow exemptions for "buildings necessary for the location and convenience of lands."

¶ 55. As a result, to satisfy the building requirement, the soccer fields would need to be necessary for the location and convenience of some building located elsewhere on the 14-acre parcel that qualifies for an exemption. However, as discussed above, under this record Deutsches Land is not entitled to any exemption on either Old Heidelberg Park or the Bavarian Inn. Since there are no buildings eligible for an exemption on this record, it necessarily follows that the soccer fields are not entitled to an exemption.¹⁵

Conclusion

¶ 56. In summary, we conclude that Deutsches Land has not sufficiently shown that it is entitled to an exemption from real property taxes for the years of 1993-95. Deutsches Land is a benevolent association under Wis. Stat. § 70.11(4). This was never in dispute. However, Deutsches Land did not produce sufficient evidence showing that the corporate use of Old Heidelberg Park was incidental in comparison to the benevolent use of the park. Similarly, Deutsches Land did not sustain its burden of proving entitlement to a real property tax exemption for the Bavarian Inn. It failed to produce sufficient evidence to measure a comparison between for-profit and exempt use of space, time, or income. Because of its evidentiary failure to support an exemption for any building, Deutsches Land is not entitled to an exemption on the soccer fields. It failed to show that the soccer fields are "necessary for [the] location and convenience" of any building that is exempt under § 70.11. Accordingly, although we disagree with some of its rationale, we affirm the decision of the court of appeals.

By the Court. — The decision of the court of appeals is affirmed.

1 Deutsches Land v. City of Glendale, 215 Wis. 2d 549, 573 N.W.2d 535 (Ct. App. 1997) (reversing judgment of Circuit Court for Milwaukee County, William J. Haese, Judge).

2 Unless otherwise noted, all further references to the Wisconsin Statutes will be to the 1995-96 version.

3 The record indicates that at some time in the past Deut-sches Land had taken the preliminary steps to platting and subdividing the 14 acres into four lots. For whatever reason, that process Was never completed. Nevertheless, the fiction of the four lots is immaterial to our analysis for purposes of this case, and we will treat the single parcel as if it were divided in four.

4 The circuit court determined that no part of the land of the Bavarian Inn lot was eligible for exemption because such an exemption would exceed the 10-acre maximum exemption of Wis. Stat. § 70.11(4).

5 Though it does not dispute that the Bavarian Soccer Club is a benevolent association, Glendale disputes that the playing and teaching of soccer is done for a benevolent or educational purpose. We will assume, without deciding, that such activity is covered by Wis. Stat. § 70.11(4).

6 At the time we decided Gymnastic Association of the South Side of Milwaukee v. City of Milwaukee, 129 Wis. 429, 109 N.W. 109 (1906), the statute did not contain a partial exemption provision: the property was either completely exempt or completely taxed. We declined to judicially create such a provision, instead deferring the consideration of that task to the legislature. Id. at 438.

7 Even assuming that Deutsches Land had offered sufficient evidence to show that its usage of the park was so pervasive to warrant a comparison of 20 days of corporate use to 345 days of benevolent use, we maintain doubts with the dissent's contention that this percentage of for-profit activity — roughly 6% — is inconsequential or incidental. Dissent at 113. Compare Northwestern Publishing House v. City of Milwaukee, 177 Wis. 401, 408-09, 188 N.W. 636 (1922) (for-profit income .00277% of total income deemed inconsequential); with Cardinal Publishing Co. v. City of Madison, 208 Wis. 517, 519, 243 N.W. 325 (1932) (for-profit income 10.7% of total income not inconsequential).

Even if Old Heidelberg Park was ineligible for a total exemption this would not, as we explain later, preclude Deut-sches Land from seeking a partial exemption for the park. To do so successfully, of course, it must adequately prove its case.

8 In 1997, the legislature repealed and recreated Wis. Stat. § 70.11(8) as § 70.1105.1997 Wis. Act 35 § 243. That legislative action only altered the placement of the statutory provision and did not alter its substance in any way. Since this case involves the years 1993-95, we will refer to the placement of the provision as § 70.11(8) rather than as its current statutory designation.

9 We note that Wis. Stat. § 70.11(8) begins with "Property that is exempt under this section...." Read literally, this phrase may require property to be totally exempt under the statute in order for subsection (8) to apply. This would mean that the property needs to be "used exclusively" by the exempt organization for exempt purposes. However, such an interpretation would render subsection (8) meaningless. The reason an exempt organization seeks a partial exemption is precisely because it does not exclusively use its property for exempt purposes. Our interpretation of subsection (8) must give effect to the subsection's overall purpose of allowing an exempt organization to claim partial exemptions.

10 Because the legislature charged the Department of Revenue, in light of its special expertise in this area, with interpreting and applying the recreated Wis. Stat. § 70.11(8), we accord weight to the agency's interpretation in the Assessment Manual. See Hagen v. LIRC, 210 Wis. 2d 12, 18—20, 563 N.W.2d 454 (1997); 1991 Wis. Act 39, § 1897t, codified at Wis. Stat. § 73.03(2a).

11 A couple of the manual's examples adequately demonstrate the point:

Examples of activities that are considered unrelated trade or business are:

• a lodge operates a restaurant which is regularly open to the public.

• a university owned printer which primarily prints material for the university also regularly does printing for the public.

Assessment Manual, 22-6 (Revised 12/95). Neither any example nor any statement of general principles set forth in the manual even hints that the subsection would apply to a situation where an exempt organization leases a part of its facility to another person who engages in for-profit activity. Instead, if the lodge itself operates a restaurant or an exempt printer itself does commercial printing, subsection (8) can apply.

12 Weissenfluh's particular expertise was noted by both Deutsches Land and the City of Glendale. Not only has Weis-senfluh been an assessor for 25 years, he also has been the chief assessor in the state's largest city which annually receives 500 applications and administers 7,000 exemptions.

13 Wisconsin Stat. § 70.11(4) adds a third "racial non-discrimination" condition to the two contained in the preamble: "in addition to the requirements specified in the introductory phrase of this section, the lessee does not discriminate on the basis of race."

Thus, an organization that claims its exemption under subsection (4) and leases a part of its property must satisfy three conditions to maintain its total exemption: (1) the rent use condition; (2) the tenant identity condition; and (3) the "racial nondiscrimination" condition. Should the exempt organization's lease fail any of these three conditions, the leased part of the property loses its exemption.

14 The record does indicate that a storage area of some sort exists on the lower floor that is used only by the benevolent associations. However, nothing in the record indicates the size of this room. Deutsches Land, if it desired to claim an exemption based on the size of this space, needed to provide the proper evidence to support its exemption claim. Again, it has not done so.

15 Because we dispose of Deutsches Land's claim on these grounds, we do not need to resolve other issues raised by the parties. In Interest of Courtney E., 184 Wis. 2d 592, 603, 516 N.W.2d 422 (1994). Namely, we do not decide whether the playing and teaching of soccer are indeed benevolent or educational activities contemplated by Wis. Stat. § 70.11(4). See Kickers of Wisconsin, Inc. v. City of Milwaukee, 197 Wis. 2d 675, 541 N.W.2d 193 (Ct. App. 1995). Also, we do not decide whether the acreage of the soccer fields was land "necessary for location and convenience" of the Bavarian Inn building or Fest Hall. See Friendship Village Milwaukee v. City of Milwaukee, 194 Wis. 2d 787, 795, 535 N.W.2d 111 (Ct. App. 1995).