Appeal from the Order of the Court of Common Pleas of Montgomery County in case of Meadowbrook Properties, Inc. v. Board of Assessment Appeals of Montgomery County, No. 75-3978.
Franklin H. Spitzer, with him Herman C. Fala, and, of counsel, Wolf, Block, Schorr and Solis-Cohen, for appellant.
Joseph A. Smyth, Assistant County Solicitor and Robert A. MacDonnell, Solicitor, with them Daniel B. Michie, Jr., Solicitor, for appellees.
Judges Wilkinson, Jr., Blatt and DiSalle, sitting as a panel of three. Opinion by Judge DiSalle.
[ 36 Pa. Commw. Page 426]
Meadowbrook Properties, Inc. (Meadowbrook) filed this appeal from an order of the Court of Common Pleas of Montgomery County which fixed the assessed value of property owned by Meadowbrook at $2,000,000. We affirm the decision of the lower court.
Meadowbrook owns 58 acres of improved real property known as Meadowbrook Apartments (Property). Property is a luxury apartment complex located in Abington Township, Montgomery County. It consists of 47 buildings containing 532 apartments which are carpeted and equipped with elaborate appliance packages. On a twenty-nine acre tract adjacent to the Property, Meadowbrook owns and operates a golf course and clubhouse which are used exclusively by tenants of the apartment complex.
For the tax year 1975, Montgomery County assessed the Property for real estate tax purposes at $1,824,700. This assessment was calculated by applying a ratio of 33 1/3% to an estimated fair market value of $5,474,100. Meadowbrook appealed to the Montgomery County Board of Assessment Appeals (Board) requesting that this assessment be reduced. The Board denied this request and Meadowbrook appealed
[ 36 Pa. Commw. Page 427]
to the Montgomery County Court of Common Pleas, which heard the matter de novo.
During the course of the hearing, Robert W. Plank testified for Meadowbrook that the maximum fair market value of the Property as of December 31, 1974, was $7,500,000. This value was determined by using the "capitalization of income" approach, which consisted of calculating the net income generated by the Property; adding a rate of recapture for the wasting asset (the building); and then adding a tax surcharge. Mr. Plank verified this determination by using a "market data" approach. Meadowbrook also called as a witness the Chairman of the Board of Assessment Appeals, who testified that the average common ratio which existed in Montgomery County during 1973 was 16.8%. The Chairman further stated that because of inflation and the absence of a general reassessment program, a standard deviation of 3% per year was added by the Board to the previous year's average. He testified that the common level ratio for 1974 was therefore roughly 20%. Finally, Meadowbrook called Dr. Willian M. Shenkel, a recognized expert in tax assessments who testified that the median level ratio existing in Montgomery County during 1974 was 14.5%. He based this finding upon raw data obtained from the Pennsylvania State Tax Equalization Board.
Montgomery County, Abington Township, Abington School District, and the Board presented the expert testimony of Mr. Reaves C. Lukens, Jr. in rebuttal. Mr. Lukens, using a "capitalization of income" approach together with a "market" approach, which included six comparable properties, testified that the fair market value of the Meadowbrook Property was $10,000,000. One primary difference in the ...