The gala opening of the Tyrone Guthrie Theater in Minneapolis on May 7, 1963, helped the Twin Cities establish its position as one of the most highly regarded and respected communities for the arts, especially for its size, in the country and the world.
Since its inception as a repertory theater five decades ago, the facility has played a major role in defining and developing artistic creativity. Its two main sites, first adjoining the Walker Art Center, slightly north of the Uptown area of Minneapolis, and, since 2006 along the Mississippi riverfront, have hosted a long line of well-known theatrical alumni and occasional touring troubadours and other celebrities while its auxiliary facilities have supplemented those activities, along with presenting major educational and training components.
Like most iconic institutions, the Guthrie has attracted some litigation, although not as much as one might expect for such a vibrant organization. Commemoration of the theater’s 50th anniversary this week provides an opportune occasion to examine some of the real life litigation dramas spawned by the Guthrie.
The Guthrie’s initial brush with litigation occurred in its first year of existence when the State Commissioner of Taxation, now known as the Department of Revenue, directed the city of Minneapolis to remove the Guthrie’s then-existing facility and related entities, from its tax assessment rolls on grounds that they were charitable institutions, exempt from taxes under Article IX, sec. 1 of the State Constitution, which prohibits taxation on “institutions of purely public charity,” as well as Minn. Stat. sec. 272.02 (6).
Some 2-1/2 years later, the Minnesota Tax Court upheld that determination in Minnesota Tax Court v. the Commissioner of Taxation, 1966 WL 28 (Minn. Tax 1966). The property, owned by the Walker Foundation, was used by the Guthrie under a long-term lease. The leasehold interest fell within the charitable exemption because it satisfies the three-part test for treatment as a “charity,” consisting of availability of benefits upon equal terms to all citizens, the intent to make a private property, and the use of the property for “purely public charity.” Its purpose to “promote the welfare of the community and to do so without any gain to any private person” gives it a charitable characteristic. The theater’s “imaginative” productions have “injected new vitality into the cultural life and … stimulated the minds and enriched the spirits of hundreds of thousands of patrons and other followers.”
That the theater requires patrons to pay for its performances “does not disqualify [it] as an institution of purely public charity. Charging admission does not vitiate the charitable status of theater, any more than it does a hospital, which may charge patients, but still is non-taxable if not run for a profit.” As a “cultural resource,” that ranks high in importance in the arts, the heater and related organizations are properly classified as “institutions of private or public charity,” exempt from state tax law.
The decision of the three-member Tax Court was not unanimous. A dissenting jurist viewed it as a “very novel proposition that a classical repertory theater [is] an institution of purely public charity.” Treating the theater as tax-exempt would, in view of the dissent, open a “Pandora’s box,” leading to “no end of exemptions claimed by clubs, societies, or associations that are non-profit organizations” ranging from “A” (Abolish Punishment League) to “Z” (Zoologist Society of America). But the dissent’s litany of potential tax exemptions did not carry the day, and the Guthrie has been a tax-exempt non-profit organization since its inception.
Another Tax Court case implicating the Guthrie was decided by the Supreme Court, which affirmed a decision by the tax tribunal that a condominium in Minneapolis, owned by a couple from Sartell outside of St. Cloud, should be treated as a “seasonal or recreational property” with lower real estate tax assessment rates under Minn. Stat. sec. 273.13 subd. 4(a) in Helgeson v. Hennepin County, 387 N.W.2d 408 (Minn. 1986).
The “recreational” classification resulted in lower taxes for the one-bedroom condominium overlooking Loring Park slightly northeast of the original Guthrie building. The contention of the owners that the property deserved preferential tax treatment was predicated on the condo being used only about 30-40 days annually when they came from their home in Sartell to Minneapolis to attend performances at the Guthrie or nearby Orchestra Hall.
The Supreme Court agreed with that argument, holding that “the condominium is seasonal/recreational.” Its treatment was equated to that of Twin Cities residents who own a cottage or other seasonal dwelling in outstate Minnesota. Treating the two under different tax classifications “would be discriminatory.”
But that did not sit well with two dissenters, who thought that the legislature in enacting the seasonal/recreational classification did not intend to provide a tax break for such activities.
The Guthrie benefits from many volunteers who provide no-charge services for the institution. But one of them found volunteer work jeopardized her ability to obtain Social Security disability benefits in Hanovich v. Astrue, 579 F. Supp.2d 1172 (D. Minn. 2008).
An administrative law judge denied the woman who volunteered at the Guthrie social security disability benefits because her volunteer work was “inconsistent” with her claimed disabling levels of pain and fatigue, which she contended prevented her from working.
U.S. District Court Judge Ann Montgomery, reviewing a magisterial report, remanded the case for further evidence regarding the denial of benefits. In denying benefits, the administrative law judge did not fully develop the record concerning the Guthrie volunteer’s medical condition.
Therefore, further proceedings would be necessary to determine if the claimant did “meet or equal any listed impairment, irrespective of her volunteer work at the Guthrie.
Inaugural and imitates
Since its gala inaugural night 50 years ago, when the Guthrie staged a murder story, Hamlet, under the direction of Tyrone Guthrie, himself, the theater’s founder and artistic director for its first three years, the theater has presented a rich lore of law-related plays. They range from Saint Joan, Arthur Miller’s tale of the trial of Joan of Arc, presented in 1964, and again during the 1986-1987 season, to The Scottsboro Boys, the 2009-2010 musical about the infamous 1930’s trial of nine African-American youths unjustly tried and convicted of rape in Alabama.
These cases illustrate the aphorism that sometimes life does, indeed, imitate art.
Originally published in the May 6, 2013 edition of Minnesota Lawyer.