This is a use tax case. It arose out of a combined lease and construction contract executed October 4, 1955, by petitioner-claimant H. K. Ferguson Company and the city of Detroit. The instrument provided for construction by petitioner-claimant of the underground parking facilities that are now beneath Detroit’s Grand Circus Park, all according to agreed plans, specifications, and express undertakings, and for the term leasing of such facilities by the city to petitioner-claimant.
The term of the lease commenced on “the date of completion of the subsurface parking facility.” It will extend 25 years from that date with option of the lessee to renew “for an additional period of not more than 15 years.” Title in fee to the land has, of course, remained in the city of Detroit.
The tax questioned by petitioner-claimant was assessed on July 30, 1959, at the sum of $40,909. The department of revenue levied that amount under the use tax act (CLS 1956, § 205.91 et seq. [Stat Ann 1950 Eev and Stat Ann 1957 Cum Supp § 7.555(1) et seq.]) for the use and consumption by petitioner-claimant of certain personal property which was purchased by petitioner-claimant and affixed by it permanently to the land, or used and consumed by it in carrying out the agreement for construction of such parking facilities. Exemption was and is claimed by petitioner under section 4(m) of the use tax act (CLS 1956, § 205.94 TStat Ann 1957 Cum Supp § 7.555(4)]) :
“Sec. 4. The tax hereby levied shall not apply to: * * *
“(i) Property sold to the United States, * * * the State of Michigan, its departments or institutions, or any of its political subdivisions. * * *
“(m) Property purchased by persons engaged in the business of constructing, altering, repairing or improving real estate for others when property so *391purchased by such persons shall be affixed and made a structural part of real estate or used and completely consumed in the fulfillment of a single contract within the exempt classifications set forth in subsections (b), (i), (j) and (k) of this section.”
Petitioner-claimant paid under protest and sued in the court of claims for recovery of the amount thus paid. Judge Weipert, presiding, found in its favor. Judgment entered accordingly. The attorney general has appealed.
In his well considered opinion Judge Weipert went to the heart of the presented question of exemption. He ruled that “section 4(m) of the use tax act grants an exemption from the tax to a person when all of the following conditions are met: * * * .” The conditions are, according to the judge:
[a] The person claiming exemption must be engaged in the business of constructing, altering, repairing or improving real estate for others;
[b] The property otherwise subject to the tax must be affixed and made a structural part of real estate or be used and completely consumed in fulfillment of a single contract [within the exempt classifications appearing in section 4’s designated subparagraphs], and
[c] The contract must be with the State, its departments or institutions, or with any of its political subdivisions.
The judge held that petitioner had met each of the foregoing specifications of exemption. We agree with his view of section 4(m) and with his application of that view to the situation presented by the pleadings of the parties hereto.
The attorney general’s thrust for reversal turns upon certain conclusions of mixed fact and law reached, as we perceive, by over-selective rather thqn four-corner reading of the agreement of Oc*392tober 4, 1955. He looks upon the agreement as a mere lease.* If it were simply that, the instrument would lend support to his conviction that Judge Weipert erred. But the agreement was not a mere contract to lease land. There was nothing to lease as agreed and contemplated by the parties absent major construction, and alteration by construction, beneath the surface of a historic park in the heart of Detroit. The agreed construction job enhanced the municipal as well as actual value of the realty with the city receiving, during the demised term, the downtown benefit of vast layers of automobile parking areas. The lease depended for its agreed beginning and tenure upon precedent performance of such agreed construction, and the personal property assessed for use taxation was actually purchased by one engaged in the business of constructing and improving real estate for others and was made a structural part of the Grand Circus Park property in the course of fulfillment, within said section 4(m), of a single contract.
We vote to affirm, with award of costs to appellee.
*393T. M. Kavanagh, C. J., and Dethmers, Kelly, Black, Smith, O’Hara, and Adams, JJ., concurred.The attorney general sums up his argument this way:
“Petitioner’s whole relationship with the property in question is that of a lessee. It was engaged solely in the business of improving its own leasehold interest, which it had assigned, prior to construction of a parking facility, to Carnegie. Petitioner, under the terms of the lease, was not required to build or construct anything for the eity of Detroit. Petitioner entered into no construction contract with the city of Detroit, but only agreed to construct, or have constructed, as a condition in the lease, the parking facility in question at its sole cost and expense. Petitioner was not required to use or consume any tangible personal property under the lease. Its use and consumption cannot therefore be construed as being in fulfillment of a contract with the eity of Detroit. Any failure of the petitioner to construct, or cause to be constructed, the parking facility would not have been a violation of a construction contract. This is exemplified by the fact that the only consideration petitioner received for the construction of the parking facility was ineome that it derived from its leasehold interest.
“It is therefore crystal clear that the legal arrangement here involved did not plaee the petitioner in the position of a person engaged in the business of constructing, altering, repairing or improving the real estate of others.”