Brian O'Neill: There's plenty of appeal to city's property values

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Bill Peduto, short-time mayor and longtime Penguins fan, swears he never thought for a moment after last week's playoff elimination about this consequence: hundreds of thousands of dollars in amusement and parking tax revenue lost for a city budget that needs every dime.

"Not at all,'' Mr. Peduto said days later, still simmering over the defeat. "Hockey Fan Bill is greater than Mayor Bill when it comes to playoff hockey.''

Maybe, but with his black-and-gold diversion gone, he must concentrate on the green, or rather the lack of it. The morning of the last playoff game, he'd issued a statement that the city was looking at a five-year budget gap of $60 million, and that "the infrastructure that makes our city special is disintegrating.''

That bleak prognosis sets up a real dichotomy with the rosy headlines for the rest of the Golden Triangle. There seem to be endless reports touting the city's rebound. The British property developer Grosvenor last month called Pittsburgh the fifth-best city in the world for long-term real estate investment, and last week another firm said we had the lowest Downtown office vacancy rate of any large metro area in the country.

This is the same city, mind you, that saw its biggest commercial properties shed a combined $1.4 billion in taxable value through appeals of property assessments.

You'd think in a market this hot the assessed values should be headed up, not down, but the city does not set assessment valuations. That's Allegheny County's job, and not one that it likes. County Executive Rich Fitzgerald is the latest in a line of county leaders who says, essentially, we're never going to get these assessments right and we don't want to spend much time trying.

Mr. Fitzgerald encouraged property owners to appeal and, not surprisingly, high-priced lawyers taking elevators down from skyscrapers turned out be a lot better at it than the average homeowner.

Yet it ain't necessarily so that the corporate attorneys pulled a fast one. While it's true some corporations wound up paying less in property taxes on some buildings than they did two or three years ago, others merely got their properties closer to the truth. The bankrupt Union Trust Building, for instance, was assessed at $49 million, slashed to $20 million upon appeal and then sold for $14 million at a sheriff's sale in March.

Ira Weiss, attorney for the Pittsburgh school district, works the other side of the fence on assessment appeals. The school board has brought 242 appeals on city properties it believes are assessed too low. He was in the courtroom last year trying to keep those skyscraper values from sinking too much, but Mr. Weiss says, "We're lawyers. We're not chemists or magicians. One cannot escape the conclusion that the county did not do a good job of assessing in the first place.''

The city also is bringing appeals this year, some 1,400 of them. As with the schools, most are residential appeals. Mr. Peduto inherited them from the Luke Ravenstahl administration, and he says he didn't go through the list because "bad things start to happen'' if a mayor gets into that level of detail.

These appeals were triggered by recent sales that came in well above the assessed value. Mr. Peduto said he'd like to create a new standard so next year's appeals don't unfairly concentrate on new buyers. Setting up computer programs that randomly select homes in a census tract is one possibility.

The idea is to get a true present value for everyone, so everyone pays his share and not someone else's, too. That, of course, is supposed to be the county's job, but Mr. Peduto is as down on county-wide reassessments as his Democratic ally Mr. Fitzgerald.

Expecting that system to work, Mr. Peduto said, is like expecting the old Bowl Championship Series to get the college football champ right.

The real rub is that even if true values could be found for every property, Pittsburgh mayors still have to raise enough tax money to pave roads and pay cops in a city where the region's largest employers -- the hospitals and universities -- are largely exempt from paying property and payroll taxes.

Maybe someday America's Largest Full-Time State Legislature will amend state law to help Pennsylvania cities deal with that reality. If you believe that, you've probably made a wrong assessment, but there's been a lot of that going around.

Brian O'Neill: or 412-263-1947.

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