Appeal from the Orders of the Court of Common Pleas of Philadelphia County in case of Overmont Corporation v. Board of Revision of Taxes of the City of Philadelphia, the City of Philadelphia, and the School District of Philadelphia, (2 cases) No. 1897 May Term, 1973, and No. 5337 January Term, 1974.
James M. Penny, Jr., Assistant City Solicitor, with him Claudia Kaputsin, Assistant City Solicitor, Raymond Kitty, Deputy in charge of Litigation, Stephen Arinson, Chief Deputy City Solicitor, and Sheldon L. Albert, City Solicitor, for appellant.
Norman Perlberger, with him Martin Howard Katz, and, of counsel, Blank, Rome, Klaus & Comisky, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Mencer. Judge Kramer did not participate in the decision in this case.
[ 25 Pa. Commw. Page 175]
The Board of Tax Revision of the City of Philadelphia (Board) determined that the appellee, Overmont Corporation (Overmont), was liable for real estate taxes for the years 1973 and 1974 on approximately 1.13 acres of land it owned in the City of Philadelphia. The Court of Common Pleas of Philadelphia County, after consolidating Overmont's appeals from those assessments, reversed the Board's determinations by an order dated December 24, 1974. The Board's exceptions to the lower court's order were dismissed on April 2, 1975, and the Board appealed to this Court.
The question presented by the Board's appeal is, we believe, one of first impression. We are asked to decide whether, as a matter of law, vacant land previously owned by one charitable institution loses its exemption from real estate taxes when it is transferred to a second nonprofit charitable corporation which intends to erect a building on the land to be used for charitable purposes. The period for which real estate taxes were assessed is the period during which the building was under construction.
The land in question here had previously been owned by Philadelphia College of Osteopathic Medicine (PCOM) which had been granted a charitable exemption from real estate taxes on the entire tract of which this land was a part. PCOM desired to build a residence facility for senior citizens on the land, which would qualify for 100 percent financing from
[ 25 Pa. Commw. Page 176]
the Federal Department of Housing and Urban Development (HUD). For reasons of expediency, a separate corporation, incorporated in Delaware and known as Overmont Corporation, was formed to apply for HUD financing. Overmont was also supposed to administer and manage the construction and operation of the proposed facility.
By a deed dated September 8, 1972, PCOM transferred the land to Overmont for a consideration of $246,000. Shortly thereafter, construction of the senior citizens' apartments began. Construction was completed on May 31, 1974, at which time Overmont took possession from the contractor. The Board claims that during the period of construction Overmont was not entitled to an exemption as a charitable institution, notwithstanding the earlier exemption granted to PCOM on the same land. We agree with the Board and reverse the order of the court below.
The applicable law is The General County Assessment Law (Act),*fn1 which provides for tax exemptions for charitable uses in Section 204(a)(3) ...