concurring in part and dissenting in part:
I concur in the majority’s finding that the space leased to ESC and used by ESC to provide management and administrative services for EHC’s hospitals was used primarily and, therefore, “exclusively for charitable purposes.” (Methodist Old Peoples Home v. Korzen (1968), 39 Ill. 2d 149, 157.) However, I am unable to accept the analysis of the majority, which dissects each of ESC’s incremental uses of space totalling less than 5% of EHC’s total facility, and further disagree with its conclusion that certain portions of that limited space were used by ESC for noncharitable functions. I would reverse completely the decision of the Department of Revenue and the circuit court of Du Page County and, therefore, respectfully dissent from the portion of the majority opinion that holds that 4,931 square feet of EHC’s 104,800 square-foot office facility is not exempt from real property taxes.
The majority found that there was no evidence that space used by two of ESC’s four functions, its corporate staff offices and its real estate management offices, was related to EHC’s charitable purpose. However, administrative offices used to support charitable or beneficent purposes may be exempt from real property taxes. (Evangelical Hospital Association v. Novak (1984), 125 Ill. App. 3d 439, 443.) Common sense would dictate that such administrative services cannot be provided without staff, and such staff requires office space. Therefore, I would hold that the 1,260 square feet designated as ESC corporate staff offices was exempt. So, too, the ESC’s management of properties, the majority of which were themselves tax exempt and which belonged to its and EHC’s not-for-profit parent corporation, was in the nature of a necessary administrative service, and I would hold that the 720 square feet of space occupied by such property management offices was exempt.
The third function of ESC that the majority found to be for a nonexempt purpose was the operation of its pharmacy, which occupied 2,951 square feet. If a property is used primarily for an exempted purpose, an incidental or secondary use for another purpose will not destroy the exemption. (Korzen, 39 Ill. 2d at 157; People ex rel. Baldwin v. Jessamine Withers Home (1924), 312 Ill. 136, 139; Highland Park Women’s Club v. Department of Revenue (1990), 206 Ill. App. 3d 447, 464-65.) However, if an unidentifiable portion of the property is used for nonexempt purposes that are not incidental or secondary, the property will not be held exempt. Illinois Institute of Technology v. Skinner (1971), 49 Ill. 2d 59, 66.
The majority acknowledges that evidence was presented that only 15% to 20% of ESC’s pharmacy sales were for profit and that the remaining sales were for a charitable purpose. Thus, I would find both that the space occupied by the nonexempt portion of ESC’s pharmacy sales was identifiable as at most 590 square feet of space and that such use relative to either ESC’s 18,000 square feet of space or, more accurately, EHC’s 104,800 square feet of space, was both secondary and incidental.