Philadelphia Commercial Owners File Property Tax Lawsuit

After the reappraisal in 2018 for the city of Philadelphia, commercial properties went up by over 50 percent, from $30.23 billion to $45.3 billion. That value increase was supposed to contribute almost $118 million in new Philadelphia property tax revenue for the city and local school districts, but that figure will now be in question after some of Philadelphia’s largest commercial property owners filed suit.

As the Philadelphia Inquirer notes, “Owners of about 700 properties and some of Philadelphia’s largest and most valuable offices, hotels, and apartment buildings — including One Liberty Place and the Centre Square office complex — sued the city, alleging it illegally reassessed commercial and industrial properties in 2018 but not residential parcels.”

The trial for the properties in question is supposed to begin on Monday at City Hall. While the city states that the assessments are constitutional, the Pennsylvania constitution also states that all properties must be treated equally in assessments and that they must re-assess both residential and commercial congruently. Philadelphia is a unique case as it is both a city and a county and has an exception that allows the property assessment office to focus on one kind of property each year rather than assessing every single property every year.

County Believes Commercial Properties Are Undervalued

Deputy City Solicitor Benjamin Field argued in court this week that the office did indeed review all values but felt that commercial properties were the most out of line with their valuations. Field said, “We are allowed to revise a portion of the city in a given year”.

The Case Against The City

Lawyers representing the property owners in Philadelphia say city assessors violated the uniformity requirement in the reappraisal year by targeting their clients. “The remedy should be that the city retracts those assessments that were made in 2018 for the commercial properties and move ahead properly with annual reassessments,” said a Blank Rome lawyer, Peter Kelsen whose form is representing over 300 of the property owners. “This is not brand-new law. It’s something that’s been out there since the 1800s.”

This is something that will ultimately play out in court over the coming weeks. The Judge posed a question in Thursday’s hearing, stating “The question is, if we’re reassessing property, do we have to do it all at one time or can it be done differently and still stay within the uniformity clause?” Cohen said. “The answer is, I guess we’ll have to find out.”