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Some Allegheny County commercial property owners win big cuts in assessments

| Monday, Sept. 16, 2013, 1:33 p.m.

Ten commercial property owners in Allegheny County got property reassessments knocked down by a collective $674.1 million through appeals of initial valuations, according to data the county controller's office released on Monday.

In one case, assessors for the private company hired to complete the court-ordered property review failed to consider that 85 percent of property owned by UPMC Passavant in McCandless was tax-exempt, county director of administrative services Jerry Tyskiewicz said.

In the case of Allegheny Country Club in Sewickley Heights, assessors for contractor Tyler Technologies reduced the assessed value by nearly $48 million — 82 percent of the first figure — when the owners complained.

“The initial assessment was just a mistake,” said Downtown attorney Robert N. Peirce Jr., who handled a subsequent appeal of the assessment that reduced it $6 million more.

“There were just some very bizarre results,” Peirce said of contentious reassessments that took effect this year after nearly a decade of court battles. “The people that handled the assessment, well, a lot made no sense.”

County officials say commercial reductions and others highlighted in Controller Chelsa Wagner's report show the appeals system works.

“There's a variety of reductions for a variety of reasons,” said Tyskiewicz, who oversees the Office of Property Assessments.

Dallas-based Tyler Technologies, which the county paid $9.3 million for the reassessment, referred comment to the county.

Wagner said her findings raise concern about whether residential owners got a fair shake.

Buoyed by eight- and nine-figure reductions such as those awarded to Allegheny Ludlum in Harrison, several Downtown building owners and hospitals around the county, commercial property owners who appealed got a collective 21 percent decrease in assessments as of Aug. 9. Residential property assessments appealed by owners or others resulted in a collective 8.7 percent reduction.

“It almost seems that, for whatever reason, commercial property owners had less of the burden,” said Wagner, a critic of the county's handling of the reassessment.

Tyskiewicz and county spokeswoman Amie Downs said it's too early to judge the process or say for sure how appeals will affect final valuations that the county, municipalities and school districts use to set tax rates.

“You can only look at this as a very interesting snapshot in time,” said Tyskiewicz, who noted an initial 6,000 appeals remain before the Board of Property Assessment and Review, another 15,000 filed this year are pending, and 9,500 appeals are waiting before the Board of Viewers, which hears appeals of the property board's decisions.

Wagner said decisions on nearly 160,000 residential and commercial appeals dropped the total assessed value of properties in the county by 8.4 percent to about $74.5 billion. Appeals from a 2002 reassessment dropped total assessed value by $3.4 billion, she said.

“They've already doubled what that number was in '02,” she said.

County officials expected the drop. When the county this year reduced the tax millage rate from 5.69 mills to 4.73 to keep expected revenue neutral, officials predicted the initial 35 percent increase in overall values would drop to about 20 percent through appeals.

Many appeals that caused large reductions for commercial property owners still set assessments at higher levels than 2012, including the Allegheny Country Club, a University of Pittsburgh facility in Harmar and a Neville Island Terminals property. An appeal by Marriott City Center, a Downtown hotel jointly owned by the Urban Redevelopment Authority and a private partnership, is pending in court even though Wagner's office listed it.

Peirce and Tarentum attorney William Krzton said property owners and lawyers for taxing bodies usually negotiate those assessments to avoid a court case.

Krzton, who said he handled 65 to 70 appeals during this reassessment, said the process appeared “less thought-out” than in 2002.

“The way it unfolded, it was done very quickly at the last minute,” said attorney Ira Weiss, who represented some plaintiffs whose lawsuits forced the reassessment.

Three UPMC properties landed on Wagner's list of the top 30 commercial assessment reductions. UPMC spokeswoman Susan Manko said Passavant and two parcels in Oakland have a mix of tax-exempt and taxable properties.

Tyler “seemed to have trouble understanding this exempt/non-exempt concept and a number of properties were negatively impacted,” Manko said. “The report that was issued by the controller's office should have factored in the errors made by the assessors.”

David Conti is a Trib Total Media staff writer. Reach him at 412-388-5802 or Staff writer Bobby Kerlik contributed.

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