Public Parking Authority of Pittsburgh v. Board of Property Assessment, Appeals and Review, Allegheny County

• Citation: 377 Pa. 274,105 A.2d 165
• Parties: PUBLIC PARKING AUTHORITY OF PITTSBURGH v. BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW, ALLEGHENY COUNTY et al. Appeal of BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW OF ALLEGHENY COUNTY et al. Appeal of PUBLIC PARKING AUTHORITY OF PITTSBURGH. Appeal of SCHOOL DIST. OF CITY OF PITTSBURGH.
• Decision Date: 24 May 1954
• Court: United States State Supreme Court of Pennsylvania

Page 165

105 A.2d 165

377 Pa. 274

PUBLIC PARKING AUTHORITY OF PITTSBURGH v. BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW, ALLEGHENY

COUNTY et al.

Appeal of BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW

OF ALLEGHENY COUNTY et al.

Appeal of PUBLIC PARKING AUTHORITY OF PITTSBURGH.

Appeal of SCHOOL DIST. OF CITY OF PITTSBURGH.

Supreme Court of Pennsylvania.

May 24, 1954.

Nathaniel K. Beck, County Sol., John W. Mamula, Asst. County Sol., Philip Baskin, Asst. County Sol., Pittsburgh, for Board of Property Assessment, Appeals and Review of Allegheny County, and Allegheny County.

Richard B. Tucker, Jr., Charles F. C. Arensberg, Patterson, Crawford, Arensberg & Dunn, Pittsburgh, for Public Parking Authority of Pittsburgh.

Mortimer B. Lesher, School Sol., Oscar G. Peterson, Asst. School Sol., Pittsburgh, for School Dist. of City of Pittsburgh.

J. Frank McKenna, City Sol., David Stahl, Asst. City Sol., Charles D. McCarthy, Asst. City Sol., Pittsburgh, for City of Pittsburgh.

Before STERN, C. J., and STEARNE, JONES, BELL, MUSMANNO, and ARNOLD, Jj.

HORACE STERN, Chief Justice.

Thc 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, 53 P.S. § 10271 et seq., 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 finance the erection of the two garages bonds in the total amount of six million dollars were issued and sold by the Authority.

The Board of Property Assessment, Appeals and Review of Allegheny County refused an application of the Authority for exemption of its four properties from taxation. Thereupon the Authority filed a bill in equity against the Board, the County of Allegheny, the City of Pittsburgh and the School District of the City of Pittsburgh, praying that the Board be restrained from assessing, and the County of Allegheny from levying, taxes upon these properties, and for a decree declaring that they are not subject to taxation by any of the defendants. The court below decreed that all of the properties were exempt except the portion of the garage on site F consisting of the rooms for stores; it dismissed the bill as to site F on the ground of lack of jurisdiction in equity because of that property being taxable in part. The Board, the County of Allegheny, and the School District of Pittsburgh, appeal from the decree exempting the three properties from taxation, while the Authority appeals from the court's refusal to exempt the stores portion of the garage on site F.

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, P.S., 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, 72 P.S. § 5020-1 et seq., 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 the Authority's claim for exemption is based upon the fact that it is not itself operating either the two garages or the parking lots but has leased them to private parties who operate them for profit.

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, not only to lease property as lessee but also to lease as lessor any property at any time required to effectuate the purposes of the Authority. But did the leasing of these properties to private parties who operate them for profit destroy their tax exempt status? Although the legislature evidently had the making of such leases in contemplation it did not limit the tax exemption granted by Section 15 of the Act to properties which the Authority might itself operate. The purpose of the Parking Authority Law, as expressed in Section 5(a), was to secure 'efficient operation of off-street parking facilities, for the fulfillment of public needs in relation to parking,' and to establish 'a permanent co"rdinated system of parking facilities, * * *', but there was left to the Authority the selection of the means by which that purpose could best be accomplished. Nevertheless the Board of Property Assessment contends that even were it conceded that the legislature intended the tax exemption to apply to properties of the Authority leased to private parties such intention would run afoul of Article IX, Section 2, of the Constitution, which declares void all laws exempting property from taxation other than the property enumerated in Section 1, namely, property used for public purposes; the Board argues that the properties of the Authority when so leased are no longer used for public purposes. We do not agree with this contention. These properties are public property and, however operated, are being used for a public purpose; their operation by the lessees is for the purpose expressly declared in the Parking Authority Law and which, both in that Act and in the McSorley case, have been established as a public purpose. If the Authority, instead of leasing the properties, had made these same lessees its agents to operate the properties and on exactly the same terms as provided in the leases there could be no question but that the...