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April 17, 1997


Appealed From No. 93-C-2540. Common Pleas Court of the County of Lehigh. Judge YOUNG, Senior Judge.

Before: Honorable Joseph T. Doyle, Judge, Honorable Doris A. Smith, Judge, Honorable Samuel L. Rodgers, Senior Judge. Opinion BY Judge Smith.

The opinion of the court was delivered by: Smith


FILED: April 17, 1997

The County of Lehigh (County) appeals from an order of the Court of Common Pleas of Lehigh County (trial court) determining that the fair market value of property owned by Mack Trucks, Inc. (Mack) as of September 1, 1993 and September 1, 1994 was $13,440,000. The questions presented by the County are (1) whether the trial court abused its discretion, erred as a matter of law and/or rendered a decision unsupported by substantial evidence in determining that the highest and best use of the current truck manufacturing facility is as a multi-user, tenant-occupied facility rather than a single-user facility and (2) whether the trial court abused its discretion or erred in failing to consider the current owner as a potential buyer of the real estate for purposes of determining fair market value and the highest and best use.


Mack owns approximately 148 acres of land improved with a one-story building of roughly 900,000 square feet, which Mack uses for assembling trucks. The County Board of Assessment Appeals determined that the fair market value of the property was $22,000,000. On Mack's appeal to the trial court Mack presented the appraisal report and testimony of William E. Bott, a real estate appraiser, setting the value at $10,500,000, and testimony and a marketing report of David E. Beal, an industrial real estate broker. The County presented testimony and a report from the appraiser Deborah S. Skeans, which set a value of $18,000,000. The trial court's order setting the value of the property included a lengthy footnote explaining the court's findings and reasoning, which was later incorporated by reference into the trial court's opinion in support of the order.

The trial court had toured the plant in operation and noted that it is a shell building more akin to an assembly area than to a traditional "smokestack" manufacturing plant. The complete underassembly of a truck is delivered at one end of the building, and parts are added until there is a finished truck at the other end. The building was constructed in its entirety in 1975 of average materials and workmanship, and it has been well maintained and is in good condition. It is located over five miles from the nearest interstate highway, with access over two-lane, blacktopped roads. The site is not served by public water or natural gas facilities.

Concerning the value of the land, the trial court noted that the parcel was not adjacent to or near an interstate highway, as were parcels used by the County's appraiser for comparable sales, and that it could not be served by rail. The trial court rejected the County appraiser's figure of $750,000 for an unused portion of the land and expressly found the appraiser to be not credible in this instance. Noting a sale of approximately 36 acres by Mack in 1987 for $27,853 per acre and the lack of any dramatic increase in land values since then, the trial court valued the land at $30,000 per acre for a total of $4,440,000.

As for the building, the trial court's principle finding was that, if sold in the marketplace, it would be put to use by more than one entity; that is, there was no reasonable probability that one entity would wish to purchase the entire facility for its own use. From that finding the trial court went on to discuss modifications that would be necessary to adapt the building for use by multiple manufacturing and/or warehousing operations, including division of the office space and provision of tall interior walls, individual electric and heating capabilities and additional loading docks. Applying a figure of $10 per square foot, the trial court arrived at a value of $9,000,000 for the building, resulting in a total fair market value of the property of $13,440,000.

The trial court's opinion in support of the order concluded that the County's challenges to findings as to the possibility of purchase by a single user, the value of the property and the poor location of the facility related to factual determinations for which the court found adequate support in the testimony of Mack's witnesses. As for the County's suggestion that Mack should be considered as a possible purchaser, the trial court noted simply that a sale to itself did not seem reasonably possible and would certainly not be "arms length" in the open market.

As the County notes, this Court's scope of review following a trial court's de novo determination in a tax assessment case is limited to determining whether the trial court abused its discretion, committed an error of law or made findings unsupported by substantial evidence. County of Monroe v. Bolus, 149 Pa. Commw. 458, 613 A.2d 178 (Pa. Commw. 1992). Mack adds that the trial court as fact finder determines the weight to be accorded the testimony of an expert witness on valuation and that this Court gives the trial court's findings great deference and will not disturb its decision unless there is clear error. In re Appeal of V.V.P. Partnership, 167 Pa. Commw. 282, 647 A.2d 990 (Pa. Commw. 1994), appeal denied, 540 Pa. 615, 656 A.2d 120 (1995). Resolutions of conflicting testimony and determinations of credibility and of the weight of the evidence are within the province of the trial court. Dawson v. Susquehanna County Tax Claim Bureau, 64 Pa. Commw. 106, 438 A.2d 1067 (Pa. Commw. 1982).


The County first challenges the trial court's determination of the highest and best use of the property as being for multiple users rather than for a single entity. *fn1 After noting similarities between the opinions of the appraisers on both sides concerning various positive aspects of the building, the County asserts that the opinions of Bott and Beal that there is a slight possibility ...

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