Dockside Associates/Pier 30, L.P. v. City of Phila.
| Decision Date | 15 January 2016 |
| Docket Number | No. 2258 C.D. 2014,2258 C.D. 2014 |
| Parties | Dockside Associates/Pier 30, L.P. v. City of Philadelphia, Board of Revision of Taxes Appeal of: Dockside Associates/Pier 30, L.P. and Peter DePaul |
| Court | Pennsylvania Commonwealth Court |
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE MARY HANNAH LEAVITT, Judge1 HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
Dockside Associates/Pier 30, L.P. (Dockside) is the record owner of a property located at 717 South Christopher Columbus Boulevard, Philadelphia, Pennsylvania 19147. The property is located in a CMX-3 mixed-use district and zoned accordingly. A sixteen story building was constructed on the property. The building contains 242 residential units, one (1) commercial unit and three (3) stories used as a private parking garage. See November 3, 2014, Findings of Fact and Conclusions of Law of the Court of Common Pleas of Philadelphia (Trial Court Findings) at 1, Reproduced Record (R.R.) at 6a2; see also Trial Court Opinion at 2, R.R. at 15a; see generally Declaration of Condominium of Dockside Condominiums, 1-40, R.R. at 634a-678a.
Construction of the building was completed in September 2002, and the Dockside Condominium Association was formed April 4, 2006. On March 26, 2006, Dockside filed a declaration of condominium, which converted and subdivided the residential units into a condominium project. Notes of Testimony (N.T.), August 11, 2014, at 22-24, R.R. at 90a; Declaration of Condominium of Dockside Condominiums, 1-40, R.R. at 634a-678a.
Beginning in 2007, the Office of Property Assessment (OPA) in the City of Philadelphia (Philadelphia) assessed a separate market value for each of the residential units.3 Trial Court Opinion at 3, R.R. at 16a. As a consequence of those assessed market values of each of the residential units for tax purposes, Dockside filed separate tax assessment appeals with OPA for each of the 153 units (152 residential units and the 1 commercial unit) still owned by Dockside after the 2007 assessments.4 Trial Court Opinion at 1, 3, R.R. at 14a, 16a.
The property was inspected for Philadelphia by A. R. Hughes and Associates (Hughes) on January 11, 2013, with an effective valuation date for each of the residential units at the property as of December 31, 2013. Philadelphia's appraisal report listed a separate value for each of the 152 residential units at issue. Those residential units were assessed using a sales comparison approach (Sales Comparison) and highest-and-best-use of the residential unit analyses, wherein it was noted that the highest-and-best-use of each residential unit was to sell the residential units on the open market for residential owner-occupants. In addition, Philadelphia assessed the fair market value of the commercial unit at $4,524,600. See November 3, 2014 Order of the Trial Court, R.R. at 1a; see also N.T., August 11, 2014, at 17, R.R. at 89a.
On February 7, 2013, Harvey M. Levin (Levin), hired by Dockside, used a "fractured condominium"5 model and an income capitalization approach to value (Income Capitalization) and produced a summary appraisal report for Dockside noting an implied market value for assessment purposes for the 2013 taxable year of $20,549.868. However, he appraised the property's value collectively at $14,965,000. Keystone Appraisal Company, Summary Appraisal Report of Harvey M. Levin, February 7, 2013; R.R. at 1106a.
Following Levin's appraisal report (for $14,965,000), Dockside filed a separate appeal with the Philadelphia Board of Revision of Taxes (Board) for each residential unit and challenged the assessed market value from OPA. Following public hearings on February 21, 2013, the Board reviewed the evidence presented and on February 27, 2013, denied Dockside's proposed reductions to the 2013 assessed market values of the residential units.
Dockside thereafter appealed the Board's decision to the Trial Court, which heard argument and testimony over the course of four days in August 2014.6 On November 3, 2014, the Trial Court (Trial Court Opinion) denied Dockside's appeal and upheld the assessed fair market values of the residential units using the Sales Comparison approach as provided by Philadelphia.7 Trial Court Opinion at 8; R.R. at 13a.
This appeal followed.
Before this Court, Dockside essentially argued8: 1) that the Trial Court improperly gave deference to Philadelphia's opinion of value instead of conducting a de novo review; 2) that the Trial Court used the improper taxation approach in assessing the residential units; and 3) that the Trial Court erred by prohibiting Dockside from using the prior appraisals of Philadelphia's expert for impeachment purposes wherein he made inconsistent statements in those prior appraisals regarding the proper method for appraising the property.
Dockside identified that the Trial Court was charged with arriving at the fair market value of the residential units based upon "competent, credible and relevant evidence." Craftmaster Manufacturing, Inc. v. Bradford County Board of Assessment Appeals, 903 A.2d 620, 625 (Pa. Cmwlth. 2006). Dockside noted that where a taxpayer's evidence "is relevant, credible and un-rebutted, the court must give it due weight and cannot ignore it in determining a property's fair market value." Koppel Steel Corporation v. Board of Assessment Appeals of Beaver County, 849 A.2d 303, 307 (Pa. Cmwlth. 2004). If the taxing authority presented rebuttal evidence, "the court must determine the weight to be given all the evidence." Koppel, 849 A.2d at 307.
In the current controversy, Dockside argued that the Trial Court offered "no meaningful analysis" regarding its decision to accept Hughes' expert opinion and reject Levin's expert testimony. Dockside argued that the Trial Court applied a de facto presumption that Philadelphia's valuation of the residential units, based upon the Sales Comparison approach, was correct simply because "it was utilized by [Philadelphia] and is consistent with [Philadelphia's] usual procedures." Dockside's Brief at 22.
Thus, Dockside argued that Philadelphia first had to establish a prima facie case by entering the official assessment record into evidence. The burden then shifted to Dockside to present "sufficient competent, credible and relevant evident of the fair market value of the property of the property to overcome the prima facie case." Koppel, 849 A.2d at 307.
Dockside asserted that the Trial Court erred in finding that the Sales Comparison approach was appropriate simply because that was the approach that Philadelphia "always uses" to evaluate residential condominium units, irrespective of whether the condominium project was distressed or fractured. See Dockside's Brief at 28.
Dockside argued that the Trial Court abused its discretion in this controversy because it reached a conclusion which "overrides or misapplies the law, or [because] the judgment exercised [was] manifestly unreasonable, or the result of partiality, prejudice, bias or ill-will." Middletown Township v. Lands of Stone, 939 A.2d 331, 335 n.3 (Pa. 2007) ().
Concomitantly, regarding the admission or exclusion of evidence, Philadelphia asserts that Pennsylvania courts have long held:
[t]hese matters are within the sound discretion of the trial court, and [the court on appeal] may reverse only upon a showing of abuse of discretion or error of law. An abuse of discretion may not be found merely because an appellate court might have reached a different conclusion, but requires a result of manifest unreasonableness, or partiality, prejudice, bias, or ill-will, or such lack of support so as to be clearly erroneous. In addition, to constitute reversible error, an evidentiary ruling must not only be erroneous, but also harmful or prejudicial to the complaining party.
Zuk v. Zuk, 55 A.3d 102, 112 (Pa. Super. 2012) (citation omitted); see also Expressway 95 Business Center, L.P. v. Bucks County Board of Assessment, 921 A.2d 70, 76 (Pa. Cmwlth. 2007) (citation omitted) (when performing a de novo review, the trial court as fact-finder maintains exclusive province concerning the credibility of witnesses and the weight afforded the evidence); Appeal of Cynwyd Investments, 679 A.2d 304, 309 (Pa. Cmwlth. 1996) petition for allowance of appeal denied, 685 A.2d 549 (Pa. 1996); Willow Valley Manor, Inc. v. Lancaster County Board of Assessment Appeals, 810 A.2d 720, 724 (Pa. Cmwlth. 2002) (trial court's findings are entitled to great deference and will not be disturbed absent clear error).
In the current controversy, the Trial Court's opinion discussed Philadelphia and Dockside's evidence presented at trial in detail:
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