The Erie, Pa. yacht club sought to have the assessed value of its leased bayfront property and facilities lowered, but the city’s school district argued that its taxes should be increased, citing development on the land along Presque Isle Bay. But Judge William R. Cunningham ruled that neither side had presented compelling arguments for movement in either direction. To pursue the matter further, the parties will now have to appeal to the state’s Commonwealth Court.
While the Commodore Perry Yacht Club (CPYC) in Erie, Pa. wanted its assessed value lowered, and the Erie School District wanted it increased, an Erie County judge has ruled that the private club’s assessed value, and its property tax bill, will stay as they are, GoErie.com reported.
Judge William R. Cunningham’s decision, released on June 12, centered on the value of the club’s bayfront property, which has become a significant issue for taxing authorities as the land along Presque Isle Bay has been developed over the past several years, GoErie.com reported.
Commodore Perry YC operates a clubhouse, pool and docks on about 3 acres of land and 13 acres of water lots, according to Cunningham’s ruling. The 174-member private, nonprofit club leases the land from the Erie-Western Pennsylvania Port Authority, but the club is responsible for paying property taxes.
Cunningham kept the assessed value of Commodore Perry YC at $635,200, which the Erie County Board of Tax Assessment Appeals set in 2012, GoErie.com reported.That value translates to a total property tax bill of $21,442, based on current millage rates. Cunningham based his decision on testimony and other evidence presented during a two-day nonjury trial that ended in January.
Commodore Perry triggered the trial by suing the Assessment Board in 2012, arguing that the $635,200 assessed value was too high, GoErie.com reported.The club contended that its own appraisal showed that the club’s assessed value, including the land, clubhouse and other improvements, should be $576,789, according to Cunningham’s ruling.
That value, GoErie.com reported,would have translated to a tax bill of $19,470 — an amount 9 percent lower than the club’s current bill.
The Erie School District and the Assessment Board then filed counterclaims, arguing that their appraisal showed the club’s assessed value should be $1.7 million, GoErie.com reported.That value would have translated to a tax bill of $57,386 — an amount 167 percent higher than the current bill.
In his decision, GoErie.com reported, Judge Cunningham faulted the experts who testified on behalf of the yacht club and the Erie School District.
He wrote that the club’s expert, Robert Glowacki, an Erie appraiser, failed to account for several factors, including the yacht club’s location, when he set the assessed value at $576,789. Cunningham described that figure as an “understated valuation,” GoErie.com reported
“Glowacki violated the number-one rule in the appraisal field: to wit, the value of location,” Cunningham wrote. “His evaluation did not include in any meaningful way the location of this property on the most commercially feasible stretch of the Presque Isle Bay waterfront, surrounded by other marinas, restaurants and hotels.”
The school district’s expert was Darrel Lloyd Jr., CEO of IREM Solutions, an appraisal company in Buffalo, N.Y.. Judge Cunningham wrote that Lloyd’s assessed value of $1.7 million for CPYC was “overstated,” GoErie.com reported. He faulted Lloyd for contending that the highest and best use of the property would be a for-profit marina, rather than a nonprofit operation such as Commodore Perry Yacht Club.
“The reality is that the marketplace in which CPYC exists is a blend of non-profit and for-profit marinas,” Cunningham wrote. “Neither Glowacki nor Lloyd provided a credible picture of the assessed value of a marina in this blended market.”
Cunningham wrote that neither the yacht club nor the school district presented evidence to rebut the Assessment Board’s value of $635,200, GoErie.com reported. Susi, the Board’s lawyer, had argued the amount should be $1.7 million, based on the new appraisal that Lloyd presented.
Any of the parties could now appeal Judge Cunningham’s ruling to Pennsylvania’s Commonwealth Court, GoErie.com reported.The lawyer for the Erie School District, Raymond Pagliari, and the lawyer for the Assessment Board, Dan Susi, told GoErie.com that they are reviewing Cunningham’s 30-page ruling. The lawyer for CPYC, Evan Adair, could not be reached for comment.
The Commodore Perry case originated with the most recent countywide reassessment, which ended in 2012, GoErie.com reported. The county Assessment Bureau in 2012 increased CPYC’s assessed value to $963,200 from $100,000, which had been the value since the 2003 reassessment.
The club appealed to the Assessment Board, which in October 2012 reduced the assessed value to $635,200, effective Jan. 1, 2013. The club, believing that figure still too high, appealed to Erie County Court in November 2012.
A dispute over the club’s floating docks led to delays in the case, GoErie.com reported. In February 2017, Judge Cunningham cited state law and rejected the Erie School District’s contention that the docks were taxable. The school district estimated the floating dock system is worth $400,000. Cunningham’s decision on that issue saved Commodore Perry about $13,500 in taxes a year, GoErie.com reported.
For the website’s full report, go to http://www.goerie.com/news/20180613/judge-leaves-erie-yacht-clubs-tax-bill-untouched