News Column

Assessment appeals leave Pittsburgh officials trying to figure out tax rates

July 9, 2014

By Bob Bauder, The Pittsburgh Tribune-Review



July 09--Pittsburgh City Council is considering raising real estate taxes for 2015, but assessments for Downtown buildings are so out of whack that setting a new tax rate "is like trying to hit a moving target," one council member said.

Pittsburgh Councilwoman Natalia Rudiak of Carrick, who chairs the finance committee, found wide-ranging disparities in property values assigned to 25 Downtown buildings after Allegheny County assessment appeals in 2013.

She said appeals of properties Downtown and in the Strip District cost the city nearly $6 million in tax money, but attorneys for property owners argue their clients were overassessed and paid more in taxes after appealing.

"When you see these wide ranges, you see how trying to set the millage rate is like trying to hit a moving target," Rudiak said. "Something is clearly flawed, but maybe they just had really good attorneys."

The attorneys noted that lawyers for the taxing bodies -- Pittsburgh, its school district, and Allegheny County -- agreed on rates.

"One of my properties was assessed at $35 million," said Downtown attorney Dusty E. Kirk. "It got increased to $88 million during the reassessment. So when we settled at $57 million they're saying it's a $31 million drop, but it's also a $22 million increase. That's what people aren't looking at."

Pittsburgh is considering a tax increase to offset the loss of about $7 million in tax revenue triggered by last year's decrease from 10.8 mills to 7.56 mills.

The city had to cut the rate because of the county's property reassessment. Kevin Acklin, chief of staff for Mayor Bill Peduto, said the city is considering appealing the new assessments.

"We are concerned that the previous administration apparently entered into agreements with large property owners that resulted in substantial decreases in tax assessments for high-priced Downtown buildings," he said in an email.

Janet Burkhardt, who represented Pittsburgh Public Schools during appeals, said the district and city negotiated out-of-court settlements in many cases because nearly 133,000 appeals countywide would have tied up courts for years.

She said property values in 2012 were still hampered by the 2008 recession, which is part of the reason for drastic decreases.

"We fought each case as hard as we could fight them on the school district's side and the city's side, to maintain as much value as we could," she said.

Rudiak's list included the Gulf Tower on Grant Street, which dropped from $50 million to $15 million during an appeal. Downtown attorney Jonathan Kamin, who represented the owners, said the county overestimated the building square footage by more than 30 percent and failed to calculate vacancy and office lease rates.

"There were systematic errors throughout the process, which made the numbers inherently unreliable," Kamin said.

Gregory A. Biernacki, who represented the owners of Doubletree Hotel on Bigelow Square, which decreased from $48.9 million to $21.5 million, said his clients paid more in taxes in 2013.

"This property's tax bill is $165,000 more than it was the year before the reassessment," he said. "To say they're getting some gigantic break, I think, is in error."

Bob Bauder is a Trib Total Media staff writer. Reach him at 412-765-2312 or bbauder@tribweb.com.

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(c)2014 The Pittsburgh Tribune-Review (Greensburg, Pa.)

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Source: Pittsburgh Tribune-Review (PA)


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