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[J-139-2006] IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT

CAPPY, C.J., CASTILLE, NEWMAN, SAYLOR, EAKIN, BAER, BALDWIN, JJ. DOWNINGTOWN AREA SCHOOL DISTRICT : : : v. : : CHESTER COUNTY BOARD OF : ASSESSMENT APPEALS AND : LIONVILLE STATION S.C.ASSOCIATES : : APPEAL OF: LIONVILLE STATION S.C. : ASSOCIATES : : : No. 31 MAP 2004 Appeal from the Order of the Commonwealth Court entered March 20, 2003, at No. 183 C.D. 2002, affirming the Order of the Court of Common Pleas of Chester County entered December 28, 2001, at No. 00-01233. 819 A.2d 615 (Pa. Cmwlth. Ct. 2003) RE-SUBMITTED: July 21, 2006

OPINION

MR. JUSTICE SAYLOR1

DECIDED: December 27, 2006

This matter concerns the issue of whether the prevailing statutory scheme for tax equalization obviates the common law procedure for asserting a challenge under the Uniformity Clause of the Pennsylvania Constitution. This is an issue of first impression in this Court. The subject property is a "neighborhood" (strip) shopping center located within Appellee Downingtown Area School District in Chester County. In 1996-97, the County assessed the subject property at approximately $5,800,000 as part of a countywide

1

This case was reassigned to this author.

reassessment in which all real estate was assessed at 100% of its fair market value, effective January 1, 1998.2 In March 1999, Lionville Station S.C. Associates The School

("Appellant") purchased the property for approximately $10,400,000.

District appealed the $5,800,000 assessment, and the County's Board of Assessment Appeals increased the assessment for tax year 2000 to $6,500,000, or $77.86 per square foot. The School District again appealed, seeking to have the assessment

further increased to $8,500,000, or $101.81 per square foot. At the ensuing de novo hearing, the parties stipulated that, for tax year 2000: the subject property's fair market value was $8,500,000; the common level ratio ("CLR") for the County, as determined by the State Tax Equalization Board ("STEB"), was 85.2% of fair market value; and the established predetermined ratio ("EPR") for assessing taxable real estate in the County was 100% of fair market value. The County's chief assessor testified that the average assessment for shopping centers similar to the subject property was $64.29 per square foot, and that the $77.86-per-square-foot figure for the subject property was arrived at in an effort to achieve uniformity with such other commercial properties, adjusting for age, location, construction, and demographic factors. Appellant also presented the expert testimony of commercial real estate

appraiser Scott Eiffes, who had performed an analysis comparing the subject property with seven other shopping centers in the County which he deemed comparable. In his analysis, Eiffes determined that the assessments for the comparables ranged from $47.87 to $89.62 per square foot, and that the ratio of the assessed value to actual

2

Fair market value is the actual value of the property, and is defined as the price a purchaser, willing but not obliged to buy, would pay an owner, willing but not obliged to sell, considering all uses to which the property is adapted and might reasonably be applied. See Green v. Schuylkill County Bd. of Assessment Appeals, 565 Pa. 185, 194 n.6, 772 A.2d 419, 425 n.6 (2001).

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value for the comparables was in the range of 34% to 69%. Accordingly, Appellant opposed the School District's requested relief, arguing that an increased assessment would result in a violation of the constitutional requirement of tax uniformity. See PA. CONST. art. VIII,

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Pennsylvania Law