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The state Supreme Court on Thursday ruled that the company that built a group of student dormitories on West Virginia University’s campus and now leases those dorms from WVU doesn’t have to pay property taxes for that lease.

The high court, in a ruling written by Justice Beth Walker, upheld University Park at Evansdale LLC’s argument that the assessed value of its leasehold should be zero, not the roughly $9 million that Monongalia County Assessor Mark Musick argued it was worth in 2015.

“Because the record before us demonstrates that Mr. Musick did not apply the proper standard for assessing leasehold interests and because he also agreed that the lease was not freely assignable, this Court concludes that [the company] showed by clear and convincing evidence that the 2015 valuation of the leasehold interest should be corrected to $0,” Walker wrote.

The ruling upheld Circuit Court Judge Lawrance Miller Jr.’s earlier ruling.

Musick’s determination of the leasehold’s assessed value has grown to $44.7 million as of this tax year. The assessor’s website shows the company paid $565,000 in property taxes for the first half of this year, and $2.3 million overall going back to 2015.

Jim Walls, a Morgantown-based lawyer representing University Park at Evansdale in the lawsuit, said his client will now try to recoup that money from the entities it went to.

Most county property taxes fund prekindergarten-12th grade school systems.

“We will pay income taxes on income, if we make a profit, no doubt about that,” Walls said.

Monongalia Chief Deputy Assessor Patrick Tenney said Musick wasn’t in the office Thursday, and the office was “still digesting” the ruling.

WVU News Director April Kaull wrote in an email that “the appropriate people on this have been tied up today” and “are aware of the decision but they have not had a chance to review it yet.”

The school filed a court brief in support of University Park.

Part of the issue is a complex public-private partnership involving back-and-forth leases that WVU used to get the dorms on its campus. This is at least the second time the case has reached the state’s highest court.

Walls said the university owns the land and leased it to the company; the company borrowed money, built the buildings and conveyed them to WVU; then WVU leased the buildings back to the company; then the company subleased to WVU the 93 percent of the buildings that’s student housing and subleased the 7 percent that’s commercial space elsewhere.

He said WVU now operates it like any other of its dorms, with students themselves having leases with WVU. He said all the revenue goes into a pot that pays expenses and pays down debt, and if any money is left over after that it will be divided up between WVU and the company.

He said WVU (a tax-exempt entity) owns the buildings and grounds, called the freehold interest.

“University Park at Evansdale, as private entity, is not exempt from taxation but its leasehold interest, which is assessable as personal property, should be assessed at a value of zero because it has no separate and independent value from WVU’s freehold interest,” Walls said.

He said WVU prohibits the company from selling the lease through language built into the lease itself, “so therefore it has no value to use as personal property.”

“We are very grateful for today’s thorough and well-reasoned opinion by the Supreme Court,” Walls said. “It is important for University Park at Evansdale. It also important for the state’s ability to attract stable, predictable and long-term investment. Billions of dollars in capital investment and thousands of West Virginia jobs are based on the legal and tax principles upheld in today’s decision.”

Reach Ryan Quinn at,, 304-348-1254 or follow @RyanEQuinn on Twitter.

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