Tech One Associates v. Board of Property Assessment, Appeals & Review
53 A.3d 685
| Pa. | 2012Background
- The land and the accompanying shopping center, movie theater, and restaurant sit on one 47.5 acre parcel in West Mifflin, PA.
- Tech One Associates owns the land; Terra Century Associates (Lessee) built and owns the improvements under a long-term lease.
- Lessee pays all real estate taxes and rents, and has an option to purchase the land at year 49; tenancy runs for 50 additional years if renewed.
- The Board of Assessment Appeals valued the parcel at about $33 million total for 2001-2005; Appellant challenged these totals.
- Appellees urged that the improvements (buildings, parking, and related infrastructure) are real estate subject to taxation under Section 201(a).
- Marple Springfield I/II and related precedent were invoked to determine whether leased improvements could be included in the real estate tax base.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether long-term-lease encumbered property valuation must include improvements owned by lessee | Tech One argues Marple Springfield I governs and excludes improvements from value when leased. | Board argues improvements are real estate under 201(a) and must be included in value. | Leased improvements are taxable real estate and must be reflected in value. |
| Whether taxation can differ based on ownership form (leasehold vs fee) under Uniformity Clause | Tech One contends differing treatment violates uniformity by classifying property differently by ownership form. | Board/Appellees contend uniformity is satisfied when real estate is properly taxed as real estate. | Court declines to address constitutional issue, ruling statutory framework requires consistent treatment of real estate regardless of ownership form. |
Key Cases Cited
- In re Appeal of Marple Springfield Center, Inc., 530 Pa. 122 (Pa. 1992) (economic reality test for leased real estate in valuation)
- In re Appeal of Marple Springfield Center, Inc., 607 A.2d 708 (Pa. 1992) (Marple Springfield I concept)
- Marple Springfield II, 654 A.2d 635 (Pa.Cmwlth. 1995) (recognizes leasing context in valuation)
- Independent Oil & Gas Ass’n v. Bd. of Prop. Assessment Appeals of Fayette County, 572 Pa. 240 (Pa. 2002) (defines real estate to be those enumerated kinds; ownership irrelevant)
- North Park Village v. Bd. of Prop. Assessments, Appeals and Review, 408 Pa. 433 (Pa. 1962) (value of real estate is total parcel value)
- Coolspring Stone Supply v. County of Fayette, 593 Pa. 338 (Pa. 2007) (real estate taxation includes structures on land)
- Pennsylvania Stave Co., 236 Pa. 97 (Pa. 1912) (buildings and improvements taxable even when owned by tenant)