377 Pa. 274 | Pa. | 1954
Opinion by
The subject of inquiry here involved is the validity of a claim of tax exemption of certain garages and parking lots owned by the Public Parking Authority of the City of Pittsburgh, but leased to and operated by private parties. A further question is whether portions of one such garage leased for commercial uses are tax exempt.
The Public Parking Authority of. Pittsburgh, incorporated under the Parking Authority Law of June 5, 1947, P. L. 458, made a, study of traffic congestion in the City of Pittsburgh as the result of which it decided upon the erection of four parking garages. Having acquired title to the necessary tracts of land for that purpose it erected on one such tract, referred to as site F, a concrete seven-level open deck parking garage, embodied in which structure at the street level are five rooms for stores. On another such tract, referred to as site B, it .erected a concrete six-level,- open deck parking garage.. Because-of a shortage in the allocation of steel it has been, unable to erect garages, on the other two tracts,, one -referred to .as. site C and the other as site Y, and those two tracts are now open parking.-lots, -In- order. to hnance.,.;the erection ..of-the two garages.bonds .-in-.-the, total amount of..six..million dollars were issued and sold by the Authority; •.-- - -.;
It neither is nor can be disputed that Authorities incorporated under the Parking Authority Law are, ordinarily at least, exempt from the payment of any taxes or assessments upon their properties. The Constitution, Article IX, Section 1, authorizes the General Assembly to exempt from taxation public property used for public purposes, and in McSorley v. Fitzgerald, 359 Pa. 264, 59 A. 2d 142, we held that the purpose for which such authorities are created constitutes a public use. The General County Assessment Law (Act of May 22, 1933, P. L. 853, Section 204(g)), exempts from all county, city, borough, town, township, road, poor and school tax all public property used for public purposes, and Section 15 of the Parking Authority Law expressly confers tax exemption upon properties of the Authorities. But the present attack
On September 14, 1951, the Authority entered into a lease agreement with Parking Service Corporation, a corporation organized under the laws of this Commonwealth and having its principal place of business in the City of Pittsburgh. Two of the principal officers of the Parking Service Corporation now operate some twenty-one parking lots and garages in the City of Pittsburgh. The lease covers the garages on site F and site B and is for a six-year term with an option to the lessee of renewing it for an additional period of six years. There is a fixed annual rental and also a provision for the division of the net profits of operation between the lessee and the Authority according to a somewhat elaborate schedule. The operation of the garages by the lessee is to be subject to the rules and regulations from time to time adopted by the Authority. The Authority fixed the initial rates to be charged for the facilities and agrees that it will consult with the lessee if from time to time it should desire to make any changes therein. Since, as above stated, the Authority has not been able to erect the garages on site Y and site C, it leased those lots to other private parties on January 29th and February 7th, 1952, respectively, but only on a month to month basis at a fixed rental and terminable upon ten days’ notice.
That the Authority had the power to lease the garages and the lots is, of course, beyond question. The Parking Authority Law, Section 5(a), expressly states that the purposes of an Authority organized thereunder shall be carried out by it “either in the capacity of lessor or lessee,” and Section 5 (b) (4) grants to the Authority the right or power, inter alia,
In Commonwealth of Pennsylvania, State Employes’ Retirement System v. Dauphin County, 335 Pa.
In Commonwealth v. Dauphin County, 354 Pa. 556, 47 A. 2d 807, the same conclusion was reached by the court in rejecting the argument that because real estate owned by the State Workmen’s Insurance Board was leased to private persons it was not being used for a public purpose.
The two cases thus cited are perhaps not wholly in point here because the leasing of the property of the State agencies there involved, being for the purpose of obtaining revenue therefrom, was apparently held to be, in and of itself, the public use for which the ownership of the property by the agencies was intended. A decision more apposite was that rendered in New Castle v. Lawrence County, 353 Pa. 175, 44 A. 2d 589, where it was held that a city park did not lose its tax exemption because it leased certain concession buildings to private licensees. The court said (p. 182, A. p.
If the renting to private parties of a portion of the property for the public purpose for which the whole was designed did not subject even the part so rented to taxation, as held in those cases, it necessarily follows that a similar renting of the entire property would not impair its tax exemption.
We are, then, all of opinion that the fact that the properties of the Parking Authority in the present case are leased for operation to private parties deriving profit therefrom instead of being operated by the Authority itself does not, as the court below correctly held, destroy the tax exemption granted them by the Public Authority Law. We are further of opinion, however, that the court was also right in holding that the portion of the garage on site P leased by the Authority for commercial uses did thereby lose its tax exemption. One of the stores in that garage was rented as a restaurant, one as a tailoring establishment, one as a
In Pittsburgh School District v. Allegheny County, 347 Pa. 101, 31 A. 2d 707, it was held that land owned by a school district was taxable if, instead of being used for any school purpose, it was leased to a private individual for a commercial enterprise, and it was immaterial that the income from the property was used for school purposes.
In Pittsburgh v. Allegheny County, 351 Pa. 345, 41 A. 2d 639, it was held that property owned by the City of Pittsburgh was taxable if leased for commercial purposes.
In Kittanning Borough v. Armstrong County, 347 Pa. 108, 31 A. 2d 710, it was held that a borough building, a portion of which was leased to a banking
It is clear, therefore, that equity could not enjoin the tax assessment of the garage on site F. Where a property owner denies the power to levy a tax on his property equity affords the remedy, but where there is merely an over-assessment or inadequate exemption the sole remedy is by appeal from the assessment as provided by statute: Dougherty v. Philadelphia, 314 Pa. 298, 301, 171 R. 583, 584; First Baptist Church of Pittsburgh v. Pittsburgh, 341 Pa. 568, 574, 20 A. 2d 209, 212; Kittanning Borough v. Armstrong County, 347 Pa. 108, 109, 110, 31 A. 2d 710, 711; Wynnefield United Presbyterian Church v. City of Philadelphia, 348 Pa. 252, 253, 35 A. 2d 276, 277. Accordingly the court, while enjoining the defendants from assessing, levying, or collecting any taxes on the garage on site B and on the two parking lots, and while holding that the portion of the garage property on site F other than the five stores was also entitled to tax exemption, properly left the Parking Authority, as to that property, to its remedy at law.
The decree is affirmed, the costs to be shared equally by the five parties.
By way of analogy, in the case of charities the rents received from commercial tenants are not exempt from taxation even though they be devoted to the purposes for which the charity was founded; to warrant exemption the property must be used directly for the imrposes of the charity and in its operation: Y.M.C.A. of Germantown v. Philadelphia, 323 Pa. 401, 187 A. 204; Presbyterian Church v. Philadelphia School District, 171 Pa. Superior Ct. 610, 616, 91 A. 2d 372, 374.