Butler building benefits Philly estate

Butler County Assistance Office, 108 Woody Drive, Butler Pa Wednesday, april 23, 2014. The office is owned by a trust managed by the city of Philadelphia.
Butler County Assistance Office, 108 Woody Drive, Butler Pa Wednesday, april 23, 2014. The office is owned by a trust managed by the city of Philadelphia.
| Saturday, April 26, 2014, 5:18 p.m.

A little piece of Philadelphia sits in Butler County, and it has resisted the county's attempts to get the property on the tax rolls.

The Board of Directors of City Trusts — a Philadelphia agency that oversees the Girard Estate, which funds a school for underprivileged children in Philadelphia — owns a building along Woody Drive in Butler that houses offices of the state Department of Public Welfare.

The state pays the estate nearly $319,000 annually in rent, or about $26,600 each month. If the Woody Drive building was on the tax rolls, it would generate more than $20,000 a year in property taxes for Butler County taxing districts.

The state Supreme Court in October ruled that the building is tax-exempt.

“I was shocked when it happened,” county Chief Assessor Christopher Savage said. “My stance is, how are they benefiting the people of Butler County? They're benefiting the trust, but how are they benefiting the county?”

The estate is tax-exempt because the school “is almost totally run on the revenues provided by the estate,” said Kevin Feeley, a spokesman for the trust.

The Girard Estate, established in 1831, owns 25 buildings in 13 counties, the Woody Drive building being one of them, Feeley said. A 2013 audit of the estate showed those properties helped generate more than $22.9 million for the school in 2012.

Butler Area School District Solicitor Tom King called the exemption fair because, “To the extent that the charity continues to invest in and build buildings and lease to the state and relieve taxpayers of the burden.”

The Girard Estate owns a building in Rochester, Beaver County, that houses welfare offices. It owns another building in Westmoreland County. The estate does not own any buildings in Allegheny County.

Butler County records show the estate bought the Woody Drive building in 2001.

The county put the building on the tax rolls because the building was privately owned, but the estate challenged the taxable status in 2002. No taxes were paid while the case was in court, and in 2005, a Butler County judge ruled the estate was tax-exempt.

But when Cumberland County won a Commonwealth Court decision in 2011 saying that a Girard Estate building there should be taxed, Butler County put its building back on the tax rolls, Savage said.

The estate filed an appeal, freezing any payments.

In October 2013, the state Supreme Court ruled in the Cumberland County case that the Girard Estate was tax-exempt, a decision that applied statewide.

“There is no denying that there are competing interests here,” Supreme Court Justice Ronald D. Castille wrote in the decision.

“Every dollar of property tax not paid by an entity such as Girard, which owns property within Cumberland County for the benefit of a charity operating in Philadelphia, is a dollar that must be found elsewhere to educate students within Cumberland County.”

If the estate paid taxes in Butler County, according to Savage, the breakdown for the current year would be: More than $5,000 for county taxes, nearly $7,900 in Butler city taxes and more than $19,000 in Butler Area School District taxes.

In March, the Butler Area School District exonerated the estate from paying any taxes based on the Supreme Court ruling. County commissioners are expected to do the same next week.

Butler City Council on Thursday approved the tax exoneration for the building.

The county commissioners are scheduled to vote on the issue Wednesday.

The Girard Estate was created by the will of merchant-banker Stephen Girard, whose 1831 bequest to the city of Philadelphia and the state established a boarding school for poor children on a 43-acre campus in northwest Philadelphia.

In recent years, the estate has had financial problems, and is considering suspending residential and high school programs.

Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or bvidonic@tribweb.com.

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