Equinix LLC v. County of Los Angeles

INTRODUCTION

As a result of the 1978 voter initiative commonly known as Proposition 13, the government can reassess the value of real property for taxation purposes after a “change in ownership” of the property. Under the statutes implementing Proposition 13, whether the transfer of a lessor’s interest in taxable real property results in a change in ownership generally depends on the length of the remaining lease term at the time of the transfer. If the remaining term of the lease is less than 35 years, then for purposes of Proposition 13 there is a change in ownership. (Rev. & Tax. Code,1 § 61, subd. (c)(1)(D) (61(c)(1)(D)).) If the remaining term of the lease at the time of the transfer is 35 years or more, then for Proposition 13 purposes there is no change in ownership because of the lessee’s long-term interest in the property. (§ 62, subd. (g).)2 In 2015, appellant GPT Maple Avenue Owner, LP (GPT) purchased a property subject to a lease to appellant Equinix, LLC (Equinix); at the time of GPT’s acquisition, the remaining term of the lease was 26 years. The Los Angeles County Assessor’s Office (Assessor) determined, pursuant to section 61(c)(1)(D), that GPT’s acquisition…