Bay Harbor Marina Limited Partnership v. Erie County Board of Assessment Appeals and the School District of the City of Erie
177 A.3d 406
Pa. Commw. Ct.2018Background
- Erie-Western Pennsylvania Port Authority (Authority) owns two waterfront parcels (Bay Harbor West and East) leased to Marina Holdings and Bay Harbor (Lessees); marinas are gated, membership-based, with limited public access (walkways, small launch/transient slips).
- Leases require Lessees to pay any taxes and permit Lessees to contest taxes; Authority disavowed support for tax immunity/exemption and opposed the petitions to the Erie County Board of Assessment Appeals (Board).
- Board declared the Parcels taxable; Lessees appealed to Erie County Common Pleas Court; trial court denied Lessees’ summary judgment, granted taxing authorities’ motion, and found Lessees lacked standing to assert immunity (but had standing for exemption); trial court removed Authority from caption sua sponte.
- Lessees appealed to Commonwealth Court; issues included standing of lessees to assert immunity, whether Authority is a necessary party, whether parcels (or parts) are immune/exempt, burden of proof allocation, and appealability of a post-judgment order.
- Commonwealth Court held Lessees have standing to assert immunity, Authority should remain a party, Parcels are not immune as recreational marinas fall outside Authority’s statutory "port terminal" purposes, but remanded to determine whether specific public-access portions of the Parcels are exempt from taxation; trial court’s removal of Authority was reversed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to assert tax immunity by lessees | Lessees: as leaseholders with tax obligations, they are "aggrieved" and within the statute's zone of interests to challenge immunity | District/City: immunity under Act belongs to Authority; lessees lack standing to assert immunity | Court: Lessees have standing to assert immunity (their lease obligations and interest suffice) |
| Whether Authority is a necessary party / caption removal | Lessees: Authority named and should remain; leases and procedure support joinder | Trial court/Authority: Authority opposed exemption and was removed from caption | Court: Trial court erred removing Authority; Authority is a proper party and must be returned to caption |
| Immunity/exemption of parcels (public-purpose use) | Lessees: leased marinas further Authority purposes (promote recreational/commercial activity) and serve public purposes | District/City: gated, for-profit, membership marinas are private/commercial; limited public access insufficient | Court: Parcels not immune under Act because recreational marinas are outside "port terminal" authorized purposes; use is private; remanded to assess whether specific public-access portions are exempt |
| Burden of proof on exemption/immunity | Lessees: taxing authorities must prove property is taxable when owned by Commonwealth agency | District/City: burden should remain on claimant of exemption | Court: Confirmed presumption that Commonwealth-owned property is immune/exempt; taxing authority bears burden to show taxability; District’s cross-appeals on burden quashed as non-aggrieved |
Key Cases Cited
- Southeastern Pennsylvania Transportation Authority v. Board of Revision of Taxes, 833 A.2d 710 (Pa. 2003) (distinguishes immunity analysis and requires agency action to be within authorized purposes for immunity)
- Lehigh-Northampton Airport Authority v. Lehigh County Board of Assessment Appeals, 889 A.2d 1168 (Pa. 2005) (clarifies immunity vs exemption standards and remand procedure for parcel/part analysis)
- Delaware County Solid Waste Authority v. Berks County Board of Assessment Appeals, 626 A.2d 528 (Pa. 1993) (Commonwealth property presumed immune absent express statutory authority to tax)
- In re Board of Property Assessment, 797 A.2d 414 (Pa. Cmwlth. 2002) (lessee/sublessee may be an "owner" for standing when lease imposes tax obligations)
- Norwegian Township v. Schuylkill County Board of Assessment Appeals, 74 A.3d 1124 (Pa. Cmwlth. 2013) (government-owned property presumed exempt; taxing authority bears burden to prove taxability)
- Reading Municipal Airport Authority v. Schuylkill Valley School District, 286 A.2d 5 (Pa. Cmwlth. 1972) (leasing public property to private, unrestricted users defeats public-use exemption)
- Wesleyville Borough v. Erie County Board of Assessment Appeals, 676 A.2d 298 (Pa. Cmwlth. 1996) (test focuses on whether lessee's use is public or private)
- Granville Township v. Board of Assessment Appeals of Mifflin County, 900 A.2d 1012 (Pa. Cmwlth. 2006) (burden of proof on taxing authority where real estate is owned by governmental body)