2013 Pa. Dist. & Cnty. Dec. LEXIS 147
Pennsylvania Court of Common P...2013Background
- Council Rock filed a petition on May 4, 2007 to challenge 2008–2013 assessments for 100 Campus Dr, Bucks County, owned by Lockheed (LMC Properties).
- Bucks County Board of Assessment Appeals denied the petition on Nov. 9, 2007, maintaining $4,020,000 (2008–2010) and $4,355,840 (2011–2013).
- Council Rock appealed to the Commonwealth Court by right under 53 P.S. § 8854(a)(1); a non-jury trial with a property view occurred on Dec. 10, 2012.
- Court credited Council Rock’s cost-valuation method, finding fair market values for 2008–2013 ranging from about $59M to $83.5M, with specific values: 2008 $64,428,000; 2009 $66,990,000; 2010 $59,013,000; 2011 $73,480,000; 2012 $73,480,000; 2013 $73,480,000.
- Lockheed’s expert advocated sales-comparison and obsolescence deductions; the court rejected the sales-comparison approach as unreliable and adopted cost-valuation with obsolescence adjustments; final assessments were set by the court.
- An amended opinion issued February 11, 2013 due to initial calculation errors, reaffirming Council Rock’s petition results.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which valuation method credibly reflects fair market value | Council Rock supports cost valuation | Lockheed supports sales comparison | Cost valuation credible and controlling |
| Whether reconciled value should be used | Reconciling cost and sales values is appropriate | Reconciling values is not credible | Court rejected reconciled value as not credible |
| Whether obsolescence adjustments are required under the cost method | Obsolescence not properly included | Functional and external obsolescence must be considered | Functional and external obsolescence included; adjustments applied |
| Credibility of Lockheed’s sales-comparison data | Sellers’ data reflect market values | Data are dissimilar and unreliable | Sales-comparison testimony not credible; not used |
| Impact of depreciation vs obsolescence in cost approach | Depreciation suffices | Depreciation plus obsolescence needed | Obsolescence values applied; depreciation adjusted per law |
Key Cases Cited
- Air Products & Chemicals, Inc. v. Bd. of Assessment & Craftmaster Manufacturing Inc. v. Bd. of Assessment, 720 A.2d 790 (Pa. Commw. Ct. 1998) (valuation not to treat property as subdivided or speculative)
- Green v. Schuylkill Cnty. Bd. of Assessment Appeals, 772 A.2d 419 (Pa. 2001) (guides valuation standards and consideration of obsolescence)
- Craftmaster Manufacturing, Inc. v. Bd. of Assessment, 903 A.2d 620 (Pa. Commw. Ct. 2006) (rejects speculative subdivision; supports cost approach components)
- Grand Prix Harrisburg, LLC v. Dauphin Cnty. Bd. of Assessment Appeals, 51 A.3d 275 (Pa. Commw. Ct. 2012) (contextualizes assessment appeal procedures)
- F & M Schaeffer Brewing Co. v. Lehigh Cnty. Bd. of Appeals, 610 A.2d 1 (Pa. 1992) (cost valuation objectives and obsolescence considerations)
- Buhl Found. v. Bd. of Prop. Assessment, Appeals & Review of Allegheny Cnty., 180 A.2d 900 (Pa. 1962) (early articulation of fair market value principles)