City of Desert Hot Springs v. County of Riverside

Opinion

MORRIS, J.

This case involves the taxability of the possessory interest of a private contractor-builder under a lease of property owned by the City of Desert Hot Springs, leased to the builder for the purpose of construction by him of certain buildings, and leased back to the city under a lease with option to purchase the buildings at the expiration of the five-year and ten-year anniversary dates of the sublease.

The taxes in issue were assessed not on the fee interest in the property owned by the city, which is exempt, but rather on the possessory interest of the contractor as owner of…