Controversies over tax reassessments continue to ripple across Delaware County and last week they crashed over some municipalities.
On Tuesday the Delaware County Board of Assessment heard appeals on four parcels that county council believes should be taxed as for-profit, not tax exempt, properties going forward.
Delaware County Council appealed the tax exemption on four parcels that are owned by different government authorities and officials say they are reviewing all tax-exempt property designations over the next two years.
County Councilwoman Christine Reuther said incorrect assessments are one reason courts have ordered the county to reassess every property in the past few years.
“It was clear that over the two decades since the previous assessment, some properties were being incorrectly assessed, leaving others to pick up more than their fair share of the taxes that were due,” Reuther stated in a press release. “Examples like these — where for-profit companies are being awarded exemptions they don’t qualify for — only increases the burden on middle-class homeowners at the same time it deprives school districts of needed funds for education.”
One parcel is owned by the Delaware County Solid Waste Authority and the others are owned by municipalities.
“The basis for the challenge is the parcels are being used by non-government business, private enterprises, and it’s clear under the law that government property should only be tax exempt when it is used for government proposes, not when it is used for profit-generating non-governmental purposes,” said Delaware County Solicitor William Martin in a phone call Wednesday.
One of the appeals was for a property in Marple Township owned by the Delaware County Solid Waste Authority. That agency rented out property to a private landscaper who is using the property for storage of equipment, so it is no longer being used for a “public purpose.”
Martin said the solicitor for the Solid Waste Authority reached out to him and agreed the county position was correct and they did not challenge the appeal.
Attorneys in the three other cases attended the hearings and were opposed to the county’s position.
Two parcels are in Ridley Township – the Ridley Marina, home to Stingers Restaurant, and a portion of the Ridley Township Community Center which is used by Capozzoli Catering.
Martin said in the case of the Ridley Marina, which includes Stingers, there will need to be a review of the assessment due to an error in the input that assessed that property for over $1 billion dollars, which he noted on its face is a mistake and the appeals office will need to correct.
The final parcel the county challenged as a nonprofit is the Springfield Country Club. A 2012 agreement, which relates to the Marriott Hotel, proposed to fix payments for that property for a period of 50 years in return for the nonprofit exemption. In return for the exemption, Marriott pays an annual “payment in lieu of taxes” or PILOT. The county’s position is that PILOTs are designed to be used by large non-profit entities that consume significant public resources, such as a university, as they do not pay local taxes and that for-profit entities are not eligible for PILOTs.
“The county does not believe that agreement is enforceable and will be putting that in question as part of the proceedings,” Martin said.
Springfield’s solicitor disagrees.
“I think the whole thing yesterday was nothing but a political farce,” said Jim Byrne, Springfield Township solicitor. Byrne questioned why properties in the Republican strongholds of Springfield and Ridley were challenged and they were not given specific notice to what the challenges were before the appeal. He claims officials learned about the details from a posting on a Democratic social media post, calling for supporters to turn out for the hearing. He also noted the hearings lasted less than 15 minutes and said the only information presented was photos of the buildings in question.
“I disagree with the way Mr. Martin set it up and I disagree with his version of the law,” Byrne said. “I believe partnerships between municipalities and private parties are not only allowed, but they are encouraged and I believe the test for determining whether the property is tax exempt is different than what he claims it is. We as a township enjoy a presumption that our land is tax exempt and we get that presumption by showing we use our public lands for a public purpose. It doesn’t have anything to do if whether a private entity makes any money.”
Byrne said the zoning allows and encourages different municipal uses which complement each other.
Springfield Township Manager Lee Fulton said the Country Club is a component of a complex that is owned by Springfield Township and zoned as “municipal use.” Among those municipal uses are the golf course, ice rink, and a swim club. Elements of the buildings are used to support the township-run golf course, and include the pro-shop, a storage facility for golf carts and other equipment, as well as banquet rooms to host events related to golf outings.
Fulton said the township is not an expert in managing a catering and restaurant business, which is why it rents out portions of the Springfield Country Club building to a private company to operate the restaurant and run banquets.
Profits go to the township treasury, which, in turn, helps to subsidize the overall operations of the larger complex.
Byrne said the original PILOT agreement was signed off by the township, the school district, Delaware County and the hotel at the time it was made.
A county press release confirmed that the PILOT for the golf course was approved by a previous county council; however, the council said no publicly available minutes from those meetings reflect any discussion of the issue.
Officials in Ridley Township did not reply for a request to comment on the appeals.
“I think this is a matter of basic fairness, that for-profit businesses should be subject to paying real estate taxes whether or not they are operating on government land and it’s not fair to their competitors. Why should most businesses have to pay real estate taxes on their locations but the Stingers Restaurant and Tavola Restaurant in Springfield, they are able to operate free of real estate taxes?” Martin said. “It’s an issue of equity and it’s also an issue of fairness to the taxpayers.”
The board is expected to announce their decisions in mid-November. Either party can then appeal to the Court of Common Pleas.