Allentown PPL center not subject to property taxes, judge says – The Morning Call

It was a case that could have bankrupted Allentown’s Neighborhood Improvement Zone Development Authority, stunted downtown development, and jeopardized the financial stability of every public arena in the state.

But in the end, Lehigh County Judge Douglas G. Reichley decided none of that would be necessary.

After months of hearings, Reichley has ruled that the PPL Center and its related parking lots and restaurants are immune from paying property tax.

The decision not only means the Allentown Neighborhood Improvement Area Development Authority does not owe $3.2 million a year in taxes on the 8,500-seat hockey arena, but it also bolsters the non-profit status of publicly constructed arenas across the state, said ANIZDA attorney Zachary Cohen. .

“Because the entire future of Allentown’s redevelopment was at stake, we took an all-or-nothing approach, with no settlement,” Cohen said. “Maintaining ANIZDA’s tax immunity allows Allentown’s redevelopment to continue. Many people have cause for celebration today.”

The decision brought a sigh of relief to ANIZDA, which operates the 127-acre special tax district where $1 billion in new development has been spurred in just four years. The authority does not have the revenue to pay a multimillion-dollar property tax bill each year, authority chairman Sy Traub said.

“We always believed we would win this case, but you never know,” Traub said. “We’re very happy. It’s too bad the school district spent money unnecessarily testing this case.”

Lehigh County and the Allentown School District have 30 days to appeal Reichley’s decision. The school district led the lawsuit, hiring tax law expert Raymond Wendolowski, in part because he has the most at stake. If the original order had stood, she would earn $2.4 million a year in new tax revenue.

Superintendent Russ Mayo was not ready to say whether the decision would be appealed to the Commonwealth Court.

“I will have to meet with the school board before deciding how to proceed,” he said.

“I think [Judge Reichley] understands the predicament of the financially troubled Allentown School District, but believes this is a matter that should be dealt with by the Legislative Assembly, not the court. “While I don’t necessarily agree, I have a lot of respect for Judge Reichley.”

Shortly after the PPL Center opened in September 2014, Lehigh County assessed the arena at $132 million, deemed it taxable, and sent ANIZDA a property tax bill. ANIZDA members assumed that the arena, like the county-owned Coca-Cola Park, would be sheltered from property taxes. But ANIZDA’s appeal to the Lehigh County Tax Assessment Appeal Board was denied.

ANIZDA then appealed the case in Lehigh County Court, where Reichley has held multiple hearings over the past year. He issued his decision late Friday afternoon, reversing the decision of the appeal board.

The arena is similar to many state-owned arenas across the country in that its main tenant is a sports team – in this case, the Lehigh Valley Phantoms hockey team. What differentiates PPL Center is that the complex is divided into nine condominiums. They include the Renaissance Hotel, a banquet hall and restaurant called The Dime, and the One City Center office building, all owned by City Center Investment Corp. and all taxable.

The case involved the arena’s two parking lots and a condo containing two restaurants – the Chickie’s & Pete’s sports bar and Crust, a pizzeria. This property is attached to the arena and is owned by ANIZDA, who then leases it to the owner of the Phantoms, BDH Development. Until the tax bill arrived, ANIZDA had assumed that all of these assets would be tax-free.

Ultimately, in his 23-page ruling, Reichley found the Hamilton Street arena, parking lot, and even restaurants to be in line with ANIZDA’s tax-exempt mission to revitalize Allentown.

“Because the properties that Defendants seek to tax fall within the geographic boundaries of the NIZ, and the legislation has established immunity from taxation for properties located within that geographic area and held by ANIZDA,” Reichley wrote. in its decision, “the decision of the Lehigh County Tax Assessment Appeal Board, entered on May 1, 2015, is set aside.”

Even though the school district isn’t appealing the decision, ANIZDA has yet to walk out of the courtroom. Owners of the PPL Plaza office building at 835 Hamilton St. sued ANIZDA, city and state officials, claiming that the tax zone violates the federal and state constitutions by creating an unfair advantage for new NIZ developers – PPL Plaza developers must compete for tenants.

This case is pending in the US District Court. Like the PPL Center’s tax issue, this lawsuit has far-reaching implications that could threaten the stability of the tax zone. And just like the PPL Center case, ANIZDA’s attorneys are confident they will win.

“When it comes to law, there are no certainties,” Traub said. “But we’re confident we’ll win this one too. All we can do is keep moving forward in our mission to revitalize Allentown.”

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• The Allentown Neighborhood Improvement Zone Development Authority remains exempt from paying property taxes.

• ANIZDA does not have to pay two years of tax bills totaling $6.4 million issued by the Lehigh County Assessment Office.

• The ruling reinforces the tax-exempt status of public arenas across the state, such as the Giant Center in Hershey, Santander Arena in Reading and Mohegan Sun Arena near Wilkes-Barre.

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