Court Opinion

ID: 4678505
Source: CourtListenerOpinion
Date Created: 2021-04-19 15:12:29.228808+00
Date Added: 2024-06-11T08:03:44.953957
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Charlie Choe, Michael Baio, Junda Zhu, :
Edward Rumell, Shanlin Shah, Jared       :
Levin, Daniel Tokich, David Vansciver, :
Rebeccah Lavitan, Namita Kalyan,         :
Moataz Elrafie, Adam Murray,             :
Christopher Kui, Monica Burton,          :
Patrick Lyman, Stephen Ficchi, Joan      :
Schwartz, Meredith Armstrong,            :
Brandon Karpo, Gennady Spector,          :
Daniel Bigler, Dan Dubiner, Paul Kim, :
Pamela Beatrice, Bidlur Shivaprakash, :
Elisa Keppler, John Didomenicis,         :
Alaina Gregorio, Marilyn Myers,          :
Daniel Friel, Jan Topczewski, Gary       :
Staegemann, Ronald Banner, Shira         :
Cohen, Luigi Adamo, Lauren Dolaway, :
Sylvester Mendoza, Christopher Clay, :
Kristen Kammerer, Irving Scolnick,       :
Caroline Lederman, Michael Hertz,        :
Mary Ellen Byrne, Christopher Meffe, :
Jerry DeSiderato, Felix Korostin, John :
Hyson, Thomas Modafferi, Eugenio         :
Boldrini, Sean Logue, Rina Kaplan,       :
David Blumenfeld, Tapas Tejura,          :
Thomas Murry, Lauren Aquino, Justin :
Mathews, Andry Oei, Ariel Jaduszuwer, :
Neelam Bhalakia, Stratton Lee, Zachary :
Berman, Lei Ju, Mian Jan, Daniel         :
Levine, Adam Solow, Enrico Pagnanelli, :
Tuu Thampy, Marie Carroll, Jeffrey       :
Rubin, Bin Meng, David Esola, Elena :
Bernardis, David Ackers, Lynn            :
Rothman, Alan Herbert, David Waxman,:
Carolyn Gregory, Scott Rosenberg,        :
Ajit Singh, Patricia Wong, Jeff Lazinger,:
Bartholomew Omalley, 111 S 15th St :
Associates, William Hammill, Daniel :
Spitzen, Costandi Awadalla, Michael      :
Canino, Arthur Bachman, George Audi, :
Meredith Shapiro, Valsa Jacob, Farrah :
Awadalla, Jeremiah Eagan, Constantinos :
Ketonis, Michael Field, Peter Shulman, :
Gilberto Pereira, Garrett Miller, Carolyn :
Prager, Pushkar Murthy, Melissa           :
Sigmond, Victoria Chen, Steven Appel, :
Siham Abarkan, Lance Moore, Georges :
Bandlec, Hsu-Nan Huang, Mitchell          :
Kent, Rainer Westphal Trust, Caitlin      :
Cantor, David Kwasny, Jacob Lazinger, :
John Wynn, R N Jwalamalini                :
Kumaraiah, Laura Levenberg, Keerthi :
Gogineni, Anne Connelly, Arthur           :
Armstrong, Edward English, Luv Ram :
Javia, Richard Gorniak, Stephanie         :
Spaeder, Gary Grunder, Andrzei            :
Cetnarski, Chaim Ouziel, Julie Terrana, :
Nevena Simidjiysha, Adam Telem,           :
Stephen Lowe, Andrew Rosen and            :
Mahbod Mohazzebi,                         :
                          Appellants      :
                                          :
             v.                           :   No. 1824 C.D. 2019
                                          :   Argued: March 15, 2021
From the Decision of the Philadelphia :
Board of Revision of Taxes                :

BEFORE: HONORABLE P. KEVIN BROBSON, President Judge
        HONORABLE ANNE E. COVEY, Judge (P.)
        HONORABLE MICHAEL H. WOJCIK, Judge

OPINION BY
PRESIDENT JUDGE BROBSON                             FILED: April 19, 2021

      Appellants, who are current or former owners of condominium units in the
Packard Grande Condominium building located at 111 South 15th Street,
Philadelphia, Pennsylvania (Property), appeal from an order of the Court of
Common Pleas of Philadelphia County (Common Pleas), dated October 28, 2019,

                                          2
which denied Appellants’ appeal from a decision of the City of Philadelphia’s (City)
Board of Revision of Taxes (BRT). BRT denied Appellants’ real estate market value
appeals for tax years 2014 and 2015, wherein Appellants challenged the City’s
Office of Property Assessment’s (OPA) termination of a 10-year tax abatement for
each of the individual condominium units effective December 31, 2013. For the
reasons set forth below, we affirm Common Pleas’ order.
                                     I. BACKGROUND
       In 2001, Chest-Pac Associates, L.P. (Chest-Pac) and 111 South 15th Street
Associates, L.P. (Developer) purchased the Property, which at the time was a vacant
office building. (Reproduced Record (R.R.) at 884a.) Upon acquisition, Chest-Pac
and Developer divided the Property into 2 condominium units: Unit 1, which is
comprised of floors 1 through 12, and Unit 2, which is comprised of
floors 13 through 26. (Id. at 60a, 884a.) Chest-Pac redeveloped Unit 1 into retail
and office space. (Id. at 884a.) On August 20, 2002, Developer obtained a building
permit for the redevelopment/conversion of Unit 2 into 153 residential rental units
on floors 13 through 25 and a health spa on floor 26. (Id. at 51a, 884a.) Thereafter,
on September 3, 2002, Developer filed an application for real estate tax exemption
for Unit 2 of the Property with BRT.1 (Id. at 51a.) By letter dated March 20, 2003,

       1
         At the time that Developer filed its application for real estate tax exemption, BRT was
responsible for, inter alia, performing property assessments, approving real estate tax abatements
and exemptions, and hearing appeals from property assessments. See Bd. of Revision of Taxes v.
City of Phila., 4 A.3d 610, 615 (Pa. 2010). Sometime thereafter, the City’s Council, by ordinance,
sought to abolish BRT and replace it with 2 newly created bodies: OPA and the Board of Property
Assessment Appeals. Id. BRT and its members sought to challenge the ordinance before the
Pennsylvania Supreme Court. Id. at 614-16. The Supreme Court, exercising plenary jurisdiction
under 42 Pa. C.S. § 726, held that the ordinance was invalid “insofar as it eliminate[d] . . . BRT’s
quasi-judicial appellate function and abolishe[d] . . . BRT entirely, replacing it with the
newly[ ]created Board of Property Assessment Appeals.” Id. at 629. The Supreme Court further
held that the invalid provisions were severable from the remainder of the ordinance. Id. Thus,

                                                 3
BRT approved the application, thereby granting Developer a 10-year tax abatement
for Unit 2 of the Property under Philadelphia Ordinance 1130, Philadelphia Code
§ 19-1303.3. (Id. at 52a.) In that letter, BRT informed Developer that the tax
abatement would commence on January 1st in the tax year immediately following
the year in which the City’s Department of Licenses and Inspections (L&I) issued
the initial certificate of occupancy for the Property. (Id.) L&I issued temporary
certificates of occupancy for the Property on July 10, 2003, August 11, 2003,
October 23, 2003, and December 15, 2003. (Id. at 53a-56a.) Subsequent thereto,
by letter dated January 9, 2004, BRT informed Developer that the tax abatement
would be in effect from January 2004 through December 2013. (Supplemental
Reproduced Record (Suppl. R.R.) at 2b.)
       By letter dated June 10, 2005, David Grasso, Developer’s general partner,
informed David Glancey, BRT’s then Chairman, that Developer intended to convert
the 153 residential rental units located in Unit 2 of the Property into individual
condominium units and offer them for sale. (R.R. at 60a.) In that letter, Mr. Grasso
acknowledged that the Property was “subject to a [10-]year tax abatement that began
on January 1, 2004[,] and ends on December 31, 2013.” (Id.) Mr. Grasso further
noted his belief “that the current abatement should be able to be provided to
[Developer’s] condominium buyers as owner[-]occupants on a pro-rata basis,”
but requested assistance from Mr. Glancey and BRT with figuring out how to
accomplish the transfer.         (Id.)    On July 26, 2005, in response to BRT’s
guidance/instructions, Developer filed a separate application for real estate tax

following the Supreme Court’s decision, BRT is responsible for hearing/deciding property
assessment appeals, while OPA is responsible for the administrative and ministerial functions
relative to property assessments, including approving real estate tax abatements and exemptions.
Id. at 628-30.

                                               4
exemption for each of the 153 individual condominium units with BRT.
(Id. at 62a-176a.)   By letters dated December 8, 2005, BRT approved the
applications, thereby granting Developer a 10-year tax abatement for each of
the 153 individual condominium units under Philadelphia Ordinance 961,
Philadelphia Code § 19-1303.2. (Id. at 61a-175a.) In each of those letters, BRT
explained:
      The [10]-year abatement term will begin on January 1, in the tax year
      immediately following the year in which the improvements are
      completed. In order to begin this exemption, you must notify [BRT] in
      writing of the completion date of the improvements. The abatement
      term and the abatable assessment will then be implemented as provided
      by [Philadelphia] Ordinance [961, Philadelphia Code § 19-1303.2].
(Id. (emphasis in originals).)
      L&I issued the final certificates of occupancy for the Property on
May 10, 2005. (Id. at 58a-59a.) By letters dated December 23, 2005, Developer’s
general counsel, Richard A. Koory, Esquire (Attorney Koory), provided BRT with
the final certificate of occupancy for floors 13 through 25 of the Property, as well as
certificates of completion for each of the 153 individual condominium units.
(Id. at 177a-748a, 911a-13a.) In those letters, Attorney Koory indicated that each of
the 153 individual condominium units were “completed on May 10, 2005, and thus
the [t]ax [a]batement [t]erm should begin on January 1, 2006, the tax year
immediately following the date in which the improvements were completed.” (Id.)
Following their purchase of the individual condominium units, Appellants’ annual
real estate tax bills included a tax abatement for a portion of their real estate taxes.
(Id. at 834a-83a, 885a-86a.) The real estate tax bills that Appellants received for tax
years 2014 and 2015 did not, however, include such an abatement. (Id.)
      On October 1, 2014, Developer’s attorney, Edgar R. Einhorn, Esquire
(Attorney    Einhorn),    filed   real   estate   market   value    appeals   for   tax
                                           5
years 2014 and 2015 with BRT on behalf of “all [of the Property’s 153 individual
condominium] units,”2 challenging what Appellants have characterized as OPA’s
premature termination of the tax abatements for the individual condominium units
after a period of only 8 years. (Id. at 749a.) BRT held a hearing on the appeals on
September 21, 2015, at which time, BRT heard argument from Attorney Einhorn
and counsel for OPA; BRT did not, however, hear testimony from any witnesses.
(Id. at 750a-93a.) After taking a short break to deliberate, BRT concluded on the
record that only a 10-year tax abatement applied to the Property. (Id. at 793a.)
Thereafter, on October 27, 2015, BRT issued a written decision/order, wherein BRT
reiterated its conclusion that “ONLY A [10-]YEAR TAX ABATEMENT APPLIES
TO THIS BUILDING.” (Id. at 803a.) Appellants appealed BRT’s decision/order
to Common Pleas. By opinion dated June 2, 2017, Common Pleas determined that
the record was insufficient to address Appellants’ argument that BRT had
granted 2, separate 10-year tax abatements for the Property—the first under
Philadelphia Ordinance 1130, Philadelphia Code § 19-1303.3, and the second under
Philadelphia Ordinance 961, Philadelphia Code § 19-1303.2—and, therefore,
Common Pleas vacated BRT’s decision and remanded the matter to BRT for a new
hearing. (Id. at 890a-92a.)
       BRT held a second hearing on December 4, 2017. At that time, Appellants
offered the testimony of Attorney Koory, who testified that he sent the

       2
         At the time of the September 21, 2015 hearing before BRT, Attorney Einhorn withdrew
the appeals of those individual condominium unit owners who had not provided him with a
completed representation form. (R.R. at 751a-56a.) Attorney Einhorn also noted that one of the
individual condominium unit owners had previously advised him that he/she did not want to
proceed with the appeal. (Id. at 752a.) Appellants in this matter are, therefore, only
those 138 individual condominium unit owners—some of which own more than one condominium
unit—who made the decision to proceed with the appeal before BRT and who provided Attorney
Einhorn with a completed representation form.

                                              6
December 23, 2005 letters to BRT to satisfy the requirements necessary to begin
the 10-year term of the tax abatement on the individual condominium units as of
January 1, 2006. (Id. at 923a-24a.) He indicated that he did not, however, receive
any communication from BRT in response to his December 23, 2005 letters—i.e.,
BRT never confirmed or denied that the tax abatements on the individual
condominium units began on January 1, 2006.          (Id. at 913a-14a, 924a-25a.)
Attorney Koory further indicated that, at each of the closings for the sale of the
individual condominium units, he provided the purchaser with a copy of the
applicable December 23, 2005 letter. (Id. at 915a.) He also testified that he
informed each purchaser that he/she would receive a 10-year tax abatement on
his/her condominium unit that began on January 1, 2006. (Id. at 924a-25a.)
      Appellants also offered the testimony of Justin Mathews, Jeff Lazinger,
Scott Rosenberg, and Ryan Zeichner, 4 of the condominium unit owners.
Mr. Mathews, Mr. Lazinger, and Mr. Zeichner testified that Attorney Koory
and/or Developer advised them that with their purchase of a condominium unit
they would receive a 10-year tax abatement for a portion of their real estate taxes.
(Id. at 932a, 936a, 942a-43a, 946a-47a, 962a-63a.) They also testified that they
relied upon that statement, as well as Developer’s marketing materials/sales pitch,
when they made their decisions to purchase their condominium units.
(Id. at 932a-33a, 936a, 943a-45a, 948a-49a, 963a-66a.) In fact, Mr. Mathews and
Mr. Lazinger indicated that, without the 10-year tax abatement, they would not have
purchased a condominium unit. (Id. at 933a-34a, 943a-44a, 947a.) Mr. Mathews,
Mr. Lazinger, and Mr. Zeichner admitted, however, that they did not contact any
City agency to confirm that they would receive a 10-year tax abatement for their
condominium units that began on January 1, 2006.          (Id. at 937a, 946a-47a,

                                         7
968a-69a.) Similarly, Mr. Rosenberg, a subsequent purchaser, testified that the
listing for his condominium unit included a statement that there was a 6-to-7-year
tax abatement that would be transferred to him at the time of sale and that he relied
upon that statement when he made his decision to purchase his condominium unit.
(Id. at 952a-56a, 958a-59a.) Mr. Rosenberg also admitted, however, that he did not
contact any City agency to confirm that he would receive a 6-to-7-year tax abatement
on his condominium unit.       (Id. at 958a.)    In addition to the testimony of
Mr. Mathews, Mr. Lazinger, Mr. Rosenberg, and Mr. Zeichner, Appellants also
offered affidavits from a substantial number of the other condominium unit owners.
(Id. at 834a-83a.) In those affidavits, the condominium unit owners indicated that,
at the time they purchased their units, they relied upon the tax abatement to provide
them with additional funds to pay their expenses, such as mortgage payments. (Id.)
      Appellants also offered the testimony of Mr. Grasso, who testified that he
believed that BRT had granted a new 10-year tax abatement on each of the individual
condominium units. (Id. at 978a.) Mr. Grasso explained that, based upon that belief,
Developer advertised that the sale of the individual condominium units would
include a 10-year tax abatement. (Id. at 978a, 981a.) With respect to the 2 years of
tax abatement that Developer had already received, Mr. Grasso indicated: “I didn’t
know whether they were going to bill me back for the previous [2] years or not that
we had gotten, but I knew we were given 10 years to these buyers. I didn’t know
what was happening to the previous [2] years.” (Id. at 982a.)
      On December 15, 2017, BRT issued a written decision/order, wherein BRT
concluded that “ONLY A [10-]YEAR TAX ABATEMENT APPLIES TO THIS
BUILDING BEGINNING IN 2004.” (Id. at 1018a.) Appellants appealed BRT’s
decision/order to Common Pleas. By order dated October 28, 2019, Common Pleas

                                         8
denied Appellants’ appeal, concluding that OPA properly terminated the 10-year tax
abatement for the Property, effective December 31, 2013. Appellants appealed
Common Pleas’ order to this Court, and Common Pleas directed Appellants to file a
statement of errors complained of on appeal pursuant to Pennsylvania Rule of
Appellate Procedure (Rule) 1925(b). In its Rule 1925(a) opinion, Common Pleas
reasoned:
              In 2001, Developer purchased the [Property]. The [Property
       consists of] a [25-]story structure,[3] first built in 1900, that up to that
       point had been used as an office building. . . . Developer rehabbed the
       [Property] and converted floors [13] through [25] into [153] residential
       rental units.
              On September 3, 2002, [Mr.] Grasso, acting as the [g]eneral
       [p]artner of . . . Developer, applied for a [10-]year tax abatement for the
       “[c]onversion of floors 13[ through ]25 into 153 residential rental units
       and floor 26 into [a] [h]ealth [s]pa for residents[’] use.” At the time of
       the application, full rehabilitation and conversion had only been
       completed on floors [24] and [25]. On March 20, 2003, . . . BRT issued
       a letter granting the abatement application for a [10-]year term.
       On January 9, 2004, . . . BRT issued a letter confirming the abatement
       period from January 2004 to December 2013. In 2003[,] the conversion
       of the [Property] to residential apartment use was completed.
              At the time of its purchase, the [Property] was a “deteriorated
       property,” as defined by [the Local Economic Revitalization Tax
       Assistance Act (LERTA)].[4] As stated above, when . . . Developer
       purchased the [Property] it was zoned and used as an office building.
       As such, . . . Developer’s construction and rehabilitation of the
       [Property] constituted a conversion from commercial to residential use.
       The conversion [sic] “construction, improvement, or conversion of
       deteriorated commercial properties” implicates LERTA and
       Philadelphia Code . . . § 19-1303[.3]. Therefore, the 2004 [a]batement:
       (1) was properly applied for and granted under LERTA and
       Philadelphia Code . . . § 19-1303[.3]; (2) began on January 1, 2004;
       and[] (3) terminated on December 31, 2013.

       3
          It is our understanding that the Property contains a 26-story structure, not a 25-story
structure.
       4
           Act of December 1, 1977, P.L. 237, as amended, 72 P.S. §§ 4722-4727.

                                               9
       On June 10, 2005, [Mr.] Grasso informed . . . BRT that
floors [13] through [25] of the [Property] had been converted from
apartment units to luxury condominium units and subsequently sold.
In his letter, [Mr.] Grasso requested that the existing 2004 [a]batement
be provided to the new owner-occupants of the condominium units.
On December 8, 2005, after the new owner-occupants had filed
separate applications with . . . BRT, the 2004 [a]batement was
transferred.
       Appellants aver that the language of [BRT’s December 8, 2005
approval letter] had the effect of starting a new abatement that would
run from 2006 through 2015. Such a “re-set” of an abatement is not
provided for by the General Assembly in either LERTA or
[the Improvement of Deteriorating Real Property or Areas Tax
Exemption Act (IDRPA)],[5] nor in the relevant portions of
[T]he Philadelphia Code. In fact, [Section 5(c) of] LERTA[, 72 P.S.
§ 4726(c),] . . . [provides] that, “[t]he exemption from taxes authorized
by this act shall be upon the property exempted and shall not
terminate upon the sale or exchange of the property.” Therefore, it is
well established that [BRT’s] December 8, 2005[ approval letter]
merely conveyed the balance of the 2004 [a]batement to the
owner-occupants of the condo[minium] units.
       On December 8, 2005, the new owner-occupants received . . .
[approval l]etter[s] from . . . BRT. [Those l]etter[s] provide[,]
in pertinent part, “[t]he [10]-year abatement term will begin on
January 1, in the tax year immediately following the year in which the
improvements are completed.” Appellants aver that this generic,
boilerplate, language had the effect of the [sic] inducing the by [sic] the
owner-occupant’s [sic] reliance on a new abatement that would run
from 2006 through 2015.
        It is clear from the record that [Mr.] Grasso knew and understood
that the abatement would end in 2013. [Mr.] Grasso’s [June 10,] 2005
[l]etter referenced the transfer of “the current abatement” to the new
occupant owners, and [Mr.] Grasso stated that the [Property] was
“[s]ubject to a ten [(10)-]year tax abatement that began on
January 1, 2004[,] and ends on December 31, 2013.” Finally, even if
the boilerplate language in [BRT’s December 8, 2005 approval] letter
could be interpreted to create a new abatement, . . . BRT lacked the
legal authority, granted by LERTA and the General Assembly, to award
another abatement beginning in January of 2006.

5
    Act of July 9, 1971, P.L. 206, as amended, 72 P.S. §§ 4711-101 to -305.

                                         10
              Appellants aver that the improvements completed in 2005, which
       converted the recently completed apartments to luxury condominium
       units, equate to the rehabilitating improvements conducted upon
       deteriorated properties as defined under LERTA, IDRPA, and the
       corresponding sections of [T]he Philadelphia Code. Therefore,
       Appellants aver that a new [10-]year abatement term began to run
       [in] 2006. First, after the completion of the conversion from office
       building to apartments, the [Property] no longer qualified as
       “deteriorated” under Philadelphia Code § 19-1303[.2] and LERTA.
       Second, the optional conversion of apartment units to condominium
       units, for . . . Developer’s financial gain, does not rise to the level of
       rehabilitation for the purpose of habitability, safety, health, amenity, or
       compliance, as required under Philadelphia Code § 19-1303[.2] and
       LERTA.
              Finally, for the sake of argument, Appellants’ position that
       [the Property’s] 2005 conversion to condominiums created a new
       abatement, would create a loophole that would allow taxpayers to stack
       successive [10-]year abatements with every new remodeling project.
       Such a loophole would fly in the face of Article [VIII], Section 2 of the
       Pennsylvania . . . Constitution[,] which empowers local taxing
       authorities to “make uniform special tax provisions applicable to a
       taxpayer for a limited period of time to encourage improvement of
       deteriorating property . . . [.]”
             It is clear that the 2004 [a]batement was proper and naturally
       terminated in 2013 under Article [VIII], Section 2 of the Pennsylvania
       . . . Constitution, LERTA, and Philadelphia Code § 19-1303[.3].
       Furthermore, Appellants have failed to meet their heavy burden of
       showing an exemption is warranted. Therefore, both this court’s
       decision that the 2004 abatement properly terminated at the end
       of 2013, and this court’s denial of . . . Appellants’ appeal from [BRT’s
       decision] were proper.
(Trial Ct. Op. at 7-10 (emphasis in original) (citations omitted) (headings omitted).)
                             II. ARGUMENTS ON APPEAL
       On appeal,6 Appellants essentially argue that BRT committed an error of law
by concluding that the 10-year tax abatement applicable to the individual

       6
         Where, as here, the court of common pleas does not take any additional evidence but
decides the matter solely on the record created before the local agency, this Court’s scope of review

                                                11
condominium units terminated/expired as of December 31, 2013; and (2) even if
BRT properly concluded that the 10-year tax abatement on the individual
condominium units terminated/expired as of December 31, 2013, principles of
equity require that Appellants receive a full 10-year tax abatement on their
condominium         units    beginning     on    January     1,   2006,     and    ending      on
December 31, 2015.7
                                     III. DISCUSSION
                      A. Real Property Tax Abatements Generally
       Article VIII, Section 2(b)(iii) of the Pennsylvania Constitution permits the
General Assembly to enact laws that, inter alia, “[e]stablish standards and
qualifications by which local taxing authorities may make uniform special tax
provisions applicable to a taxpayer for a limited period of time to encourage
improvement of deteriorating property or areas by an individual, association or
corporation, or to encourage industrial development by a non-profit corporation.”
Pursuant to this constitutional authority, the General Assembly enacted IDRPA and
LERTA, both of which authorize local taxing authorities to provide real property tax
abatements for improvements made to certain deteriorated properties.                         See
Section 102 of IDRPA, 72 P.S. § 4711-102; Section 2 of LERTA, 72 P.S. § 4723.
More specifically, IDRPA authorizes local taxing authorities to provide tax
abatements for “improvements to certain deteriorated residential property and
areas,” whereas LERTA authorizes local taxing authorities to provide tax

is limited to determining whether the local agency violated any constitutional rights, whether the
local agency committed an error of law, or whether the local agency’s factual findings are
supported by substantial evidence. Kuziak v. Borough of Danville, 125 A.3d 470, 474 n.2
(Pa. Cmwlth. 2015) (citing Spencer v. City of Reading Charter Bd., 97 A.3d 834, 839
(Pa. Cmwlth. 2014); 2 Pa. C.S. § 754(b)).
       7
           We have condensed Appellants’ arguments for purposes of discussion.

                                                12
abatements for “new construction in deteriorated areas of economically depressed
communities and improvements to certain deteriorated industrial, commercial or
other business property.” 72 P.S. § 4711-102(a); 72 P.S. § 4723.
      Pursuant to the authority granted to it under IDRPA and LERTA, the City’s
Council adopted 2 ordinances that are relevant to this appeal:        Philadelphia
Ordinance 1130, which is codified at Philadelphia Code § 19-1303.3, and
Philadelphia Ordinance 961, which is codified at Philadelphia Code § 19-1303.2.
Under Philadelphia Code § 19-1303.3, which was adopted under LERTA, an
applicant is entitled to receive a tax abatement for improvements made to
deteriorated industrial, commercial, or other business property. Under Philadelphia
Code § 19-1303.2, which was adopted under IDRPA, an applicant is entitled to
receive a tax abatement for improvements made to eligible residential property.
IDRPA, LERTA, Philadelphia Code § 19-1303.2, and Philadelphia Code
§ 19-1303.3 limit the maximum tax abatement for improvements made to
deteriorated property to 10 years.    See Section 203(a)(5) of IDRPA, 72 P.S.
§ 4711-203(a)(5); 72 P.S. § 4726(b)(1); Philadelphia Code § 19-1303.3(4)(b)(.1);
Philadelphia Code § 19-1303.2(5)(a).         Stated another way, a property
owner/taxpayer is entitled to receive a single 10-year tax abatement for
improvements made to a deteriorated property. In addition, a tax abatement granted
under IDRPA, LERTA, Philadelphia Code § 19-1303.2, and Philadelphia Code
§ 19-1303.3 is on the property and does not terminate upon the sale or exchange of
the property. See 72 P.S. § 4711-203(c); 72 P.S. § 4726(c); Philadelphia Code
§ 19-1303.3(4)(b)(.2); Philadelphia Code § 19-1303.2(5)(b).

                                        13
               B. Termination/Expiration of 10-Year Tax Abatement
       Appellants argue that BRT committed an error of law by concluding that
the 10-year tax abatement applicable to the individual condominium units
terminated/expired as of December 31, 2013. More specifically, Appellants contend
that BRT’s December 8, 2005 letters plainly and unambiguously establish that BRT
granted a 10-year tax abatement on the individual condominium units, not an 8-year
tax abatement. Appellants further contend that, because the final certificates of
occupancy for the Property were not issued until May 10, 2005, the 10-year tax
abatement on the individual condominium units would have started on
January 1, 2006, and ended on December 31, 2015. Appellants, therefore, suggest
that by terminating the 10-year tax abatement for the individual condominium units
effective December 31, 2013, the City, namely OPA, improperly implemented the
tax abatement based upon the temporary certificates of occupancy that L&I issued
in 2003, rather than the final certificates of occupancy that L&I issued in 2005.8

       8
          Appellants further argue that the central dispute in this case is not whether the Property—
or individual condominium units—is tax exempt or should be entitled to receive a tax abatement,
but rather, whether the previously granted tax abatement should have been terminated effective
December 31, 2013. As a result, Appellants suggest that Common Pleas applied an incorrect
standard—i.e., that “statutory provisions exempting property from taxation should be strictly
construed”—and burden of proof—i.e., “a heightened burden” or “heavy burden.”
(Appellants’ Br. at 21-22.) Appellants do not, however, suggest what standard or burden of proof
Common Pleas should have applied under the circumstances. In any event, as explained more
fully below, Appellants’ arguments relative to the ultimate issues presented in this case fail
regardless of whether the relevant provisions of LERTA, IDRPA, and The Philadelphia Code are
strictly construed or whether Appellants are held to a heightened burden of proof.

                                                14
        In response, the City argues that BRT properly concluded that the 10-year tax
abatement applicable to the individual condominium units expired on
December 31, 2013, because, pursuant to IDRPA, LERTA, Philadelphia Code
§ 19-1303.2, and Philadelphia Code § 19-1303.3, BRT could not grant any more
than a 10-year tax abatement for the improvements made to the Property.
More specifically, the City contends that, because Developer enjoyed the
first 2 years of the 10-year tax abatement that BRT granted for the improvements
that Developer made to the Property and that tax abatement continued on the
Property upon Developer’s sale of the individual condominium units, Appellants
were only entitled to have the remainder of that 10-year tax abatement transferred to
them.    In other words, Appellants were not entitled to a brand new 10-year
tax abatement simply because Developer converted Unit 2 of the Property
from 153 residential    rental   units   to    153   individual   condominium   units.
The City further argues that, contrary to Appellants’ contentions, the plain and
unambiguous language of BRT’s December 8, 2005 letters did not provide a
new 10-year tax abatement for the individual condominium units beginning on
January 1, 2006. The City contends, rather, that BRT’s December 8, 2005 letters
indicated that the 10-year term of the tax abatement for the individual condominium
units would begin in the tax year immediately following the year in which the
improvements were completed, which would have been January 1, 2004, not
January 1, 2006, because Developer had previously informed BRT that the
improvements to the Property had been completed in 2003. The City also contends
that the evidence presented to BRT establishes both that “the course of dealing
between . . . Developer and . . . BRT shows that both parties intended to simply
transfer the remainder of the existing abatement” and that “BRT had

                                              15
treated the [existing] abatement as having been transferred, not re-started.”
(City’s Br. at 26, 27.) Lastly, the City contends that Appellants’ argument that BRT
should not have commenced the 10-year tax abatement based upon the temporary
certificates of occupancy but, instead, should have waited until Developer received
the final certificates of occupancy is “over a decade too late,” and, even if it was
timely, Appellants “have not produced any authority that temporary certificates of
occupancy are legally insufficient proof of completion to trigger the start of the [tax]
abatement term.” (City’s Br. at 29, 31.)
      While we recognize that BRT’s December 8, 2005 letters may “plainly and
unambiguously” indicate that the individual condominium units would receive
a 10-year tax abatement, the key consideration is when that 10-year tax abatement
began. Appellants would like this Court to ignore both the law and the facts and
circumstances surrounding this case and conclude that the 10-year tax abatement
applicable to the individual condominium units began on January 1, 2006. This we
cannot do. BRT’s December 8, 2005 letters do not indicate the exact date on which
the term of the 10-year tax abatement for the individual condominium units would
commence. Rather, BRT’s December 8, 2005 letters provide, in relevant part, that
“[t]he [10]-year abatement term will begin on January 1, in the tax year immediately
following the year in which the improvements are completed.” (R.R. at 61a-175a.)
The tax year in which the improvements are completed is critical because it is the
improvements made to deteriorated property that qualify the Property for a tax
abatement. See 72 P.S. § 4711-102; 72 P.S. § 4723; Philadelphia Code § 19-1303.3;
Philadelphia Code § 19-1303.2.         Here, by the time that BRT issued the
December 8, 2005 letters, Developer had already informed BRT that the
improvements to the Property had been completed—i.e., Developer provided BRT

                                           16
with copies of the temporary certificates of occupancy that L&I had issued for the
Property. Thus, based upon the “plain and unambiguous” language of BRT’s
December 8, 2005 letters and the date on which Developer informed BRT that the
improvements to the Property had been completed, the 10-year term of the tax
abatement granted on the individual condominium units commenced on
January 1, 2004, and ended on December 31, 2013.
      That conclusion is further bolstered by the statutory provisions set forth in
IDRPA, LERTA, Philadelphia Code § 19-1303.2, and Philadelphia Code
§ 19-1303.3, all of which limit the maximum tax abatement for improvements
made to deteriorated property to 10 years. See 72 P.S. § 4711-203(a)(5); 72 P.S.
§ 4726(b)(1);    Philadelphia    Code     § 19-1303.2(5)(a);    Philadelphia    Code
§ 19-1303.3(4)(b)(.1). BRT granted Developer, upon its application, a 10-year tax
abatement for Unit 2 of the Property by letter dated March 20, 2003, which
Developer subsequently acknowledged began on January 1, 2004, and ended on
December 31, 2013. (See R.R. at 51a-56a, 60a; Suppl. R.R. at 2b.) Developer was
not entitled to a brand new 10-year tax abatement simply because Developer
thereafter converted the 153 residential rental units into 153 individual condominium
units. By that time, Developer not only had applied for and had been granted
a 10-year tax abatement for Unit 2 of the Property, but Developer had also enjoyed
the first 2 years of that 10-year tax abatement and did not object to BRT starting the
period of that 10-year tax abatement based upon the temporary certificates of
occupancy for the Property. In addition, when Developer converted Unit 2 of the
Property—i.e., the 153 residential rental units—into 153 individual condominium
units and offered them for sale, most, if not all, of the improvements had already
been made to the Property and the Property no longer qualified as deteriorated.

                                         17
Thus, Developer would not have qualified for a tax abatement under Philadelphia
Code § 19-1303.2. BRT’s guidance/instructions to file new applications for each of
the individual condominium units under Philadelphia Code § 19-1303.2, therefore,
appears to have been a mechanism by which BRT could include the existing tax
abatement on 153 separate real estate tax bills for each of the individual
condominium units. Moreover, when Developer contacted BRT regarding the
conversion of the 153 residential rental units into 153 individual condominium units,
Developer acknowledged that BRT had already granted a 10-year tax abatement on
the Property and requested assistance in providing the “current abatement” to the
purchasers of the individual condominium units. (See R.R. at 60a.) For all these
reasons, Developer could only pass along to Appellants the 8 years that remained on
the 10-year term of the existing/original tax abatement. As a result, we cannot
conclude that BRT committed an error of law by determining that the 10-year tax
abatement applicable to the individual condominium units terminated/expired as of
December 31, 2013.
                                    C. Equity
      Appellants argue, for the first time in this appeal, that, even if BRT properly
concluded that the 10-year tax abatement applicable to the individual condominium
units terminated/expired as of December 31, 2013, principles of equity require that
Appellants receive a full 10-year tax abatement on their condominium units
beginning on January 1, 2006, and ending on December 31, 2015. In that regard,
Appellants contend that, because BRT informed Appellants in writing that they
would receive a 10-year tax abatement on their individual condominium units, this
Court should apply the doctrine of equitable estoppel and preclude the City from
“depriving [Appellants] of the preconceived benefits of a [10]-year real estate tax

                                         18
reduction.” (Appellants’ Br. at 25.) Relying upon a statement made by Common
Pleas in its June 2, 2017 opinion vacating BRT’s initial order/decision and
remanding the matter to BRT for a new hearing, Appellants suggest that BRT’s
December 8, 2005 letters were not “boilerplate” and did not serve merely to transfer
the existing 10-year tax abatement to the individual condominium unit owners,
because, standing alone, those letters would lead the individual condominium unit
owners to believe that the 10-year tax abatement would commence on
January 1, 2006. Appellants further suggest that the evidence of record—namely,
that BRT instructed Developer to file new applications for the individual
condominium units under Philadelphia Code § 19-1303.2, that no BRT employee
ever indicated to Developer that the existing abatement would be transferred, and
that nowhere in BRT’s December 8, 2005 letters did BRT indicate that the term of
the abatement would be 8 years rather than 10 years—clearly establishes that
Appellants justifiably relied upon BRT’s December 8, 2005 letters to mean that
Appellants had been granted a 10-year tax abatement. Appellants further contend
that “[t]his Court should be especially willing to exercise its equitable powers” and
rule in favor of Appellants because their position is consistent with what they have
characterized as “[m]odern [e]nabling [l]egislation,”9 entitling a property

       9
          The “modern enabling legislation” cited and relied upon by Appellants is Section 205 of
The General County Assessment Law, Act of May 22, 1933, P.L. 853, as amended, added by the
Act of July 29, 1970, P.L. 642, 72 P.S. § 5020-205, which is entitled “Temporary tax exemption
for residential construction,” and provides, in relevant part:
               (b) New single and multiple dwellings constructed for residential purposes
       and improvements to existing unoccupied dwellings or improvements to existing
       structures for purposes of conversion to dwellings, shall not be valued or assessed
       for purposes of real property taxes until (1) occupied, (2) conveyed to a bona fide
       purchaser or, (3) [30] months from the first day of the month after which the
       building permit was issued or, if no building permit or other notification of
       improvement was required, then from the date construction commenced.

                                               19
owner/developer to receive a “construction abatement.” (Appellants’ Br. at 32.)
In support thereof, Appellants suggest that, “[h]ad the [c]onstruction [a]batement
been in effect when the Property was first renovated, [Developer] would have
applied for the [c]onstruction [a]batement and would have enjoyed a [2]-year period
of abatement prior to converting the [rental] units into condominium[ units, and,
u]pon the sale of each [condominium ]unit, the abatement would have converted, as
it did, into an . . . abatement [under Philadelphia Code § 19-1303.2,] granting each
condominium unit owner a separate [10]-year abatement term.” (Id. at 33.)
      In response, the City argues that Appellants’ equitable estoppel argument
lacks merit because, even if BRT actively misrepresented that Appellants would
receive a brand new 10-year tax abatement on their individual condominium units,
BRT cannot be estopped from collecting taxes, an essential government function, or
compelled to award a tax benefit that exceeds its authority under IDRPA, LERTA,
Philadelphia Code § 19-1303.2, and Philadelphia Code § 19-1303.3. The City
further argues that, even if the doctrine of equitable estoppel could be applied to
BRT under these circumstances, Appellants have not established the required
elements for equitable estoppel—i.e., a misrepresentation made by BRT directly to
Appellants, rather than to Developer and subsequently “passed-through” to
Appellants, that Developer’s reliance on BRT’s December 8, 2005 letters as
establishing a brand new 10-year tax abatement on the individual condominium units
beginning on January 1, 2006, was reasonable, or that BRT made a
misrepresentation of material fact, as opposed to a misrepresentation of law.
The City also contends that the “construction abatement” cannot form the basis for
equitable relief because Appellants have not advanced any viable claim that would
justify extending their tax abatement for an additional 2 years.

                                         20
       Even if we were to put aside the fact that Appellants may have waived their
equitable arguments by failing to raise them before BRT and/or Common Pleas,10
we cannot conclude that Appellants would be entitled to equitable relief.
“[T]he Commonwealth [of Pennsylvania] or its subdivisions or instrumentalities[, in
this case the City,] cannot be estopped ‘by the acts of its agents and employees if
those acts are outside the agent’s powers, in violation of positive law, or acts which
require legislative or executive action.’” Cent. Storage & Transfer Co. v. Kaplan,
410 A.2d 292, 294 (Pa. 1979) (quoting Kellams v. Pub. Sch. Emps.’ Ret. Bd.,
403 A.2d 1315, 1318 (Pa. 1979) (Larsen, J., Opinion in Support of Reversal)).
Thus, even if Appellants could establish all of the elements necessary to assert a
claim under the theory of equitable estoppel11—including that BRT somehow
misrepresented to Appellants, who were not the direct recipients of BRT’s
December 8, 2005 letters and who did not even own the individual condominium
units at the time that BRT issued its December 8, 2005 letters, that the 10-year tax
abatement applicable to the individual condominium units commenced on
January 1, 2006, and ended on December 31, 2015—Appellants cannot prevail
because BRT could only grant a maximum of 10 years of tax abatement for the
improvements that Developer made to the Property. See 72 P.S. § 4711-203(a)(5);

       10
         Although the City noted, but did not definitively raise, the waiver issue, “an appellate
court may sua sponte refuse to address an issue raised on appeal that was not raised and preserved
below.” Lynch v. Dep’t of Transp., Bureau of Driver Licensing, 710 A.2d 126, 128 n.6
(Pa. Cmwlth. 1998).
       11
           “The doctrine of equitable estoppel may be applied to a Commonwealth agency when
the party asserting estoppel establishes that: (1) the agency negligently misrepresented a material
fact; (2) the agency knew or had reason to know that the party would justifiably rely on the
misrepresentation; and (3) the party acted to his or her detriment by justifiably relying on the
misrepresentation.” Forbes v. Pa. Dep’t of Corr., 931 A.2d 88, 94 n.6 (Pa. Cmwlth. 2007), aff’d,
946 A.2d 103 (Pa. 2008), cert. denied, 555 U.S. 1192 (2009).

                                                21
72 P.S. § 4726(b)(1); Philadelphia Code § 19-1303.3(4)(b)(.1); Philadelphia Code
§ 19-1303.2(5)(a). As explained more fully above, Developer used and enjoyed the
first 2 years of that 10-year tax abatement and, therefore, could only pass along to
Appellants the remainder of that 10-year term, which ended on December 31, 2013.
As a result, we cannot conclude that Appellants are entitled to equitable relief in the
form of a 10-year tax abatement on their condominium units beginning on
January 1, 2006, and ending on December 31, 2015.
                                IV. CONCLUSION
      Accordingly, we affirm Common Pleas’ order.

                                          P. KEVIN BROBSON, President Judge

                                          22
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Charlie Choe, Michael Baio, Junda Zhu, :
Edward Rumell, Shanlin Shah, Jared       :
Levin, Daniel Tokich, David Vansciver, :
Rebeccah Lavitan, Namita Kalyan,         :
Moataz Elrafie, Adam Murray,             :
Christopher Kui, Monica Burton,          :
Patrick Lyman, Stephen Ficchi, Joan      :
Schwartz, Meredith Armstrong,            :
Brandon Karpo, Gennady Spector,          :
Daniel Bigler, Dan Dubiner, Paul Kim, :
Pamela Beatrice, Bidlur Shivaprakash, :
Elisa Keppler, John Didomenicis,         :
Alaina Gregorio, Marilyn Myers,          :
Daniel Friel, Jan Topczewski, Gary       :
Staegemann, Ronald Banner, Shira         :
Cohen, Luigi Adamo, Lauren Dolaway, :
Sylvester Mendoza, Christopher Clay, :
Kristen Kammerer, Irving Scolnick,       :
Caroline Lederman, Michael Hertz,        :
Mary Ellen Byrne, Christopher Meffe, :
Jerry DeSiderato, Felix Korostin, John :
Hyson, Thomas Modafferi, Eugenio         :
Boldrini, Sean Logue, Rina Kaplan,       :
David Blumenfeld, Tapas Tejura,          :
Thomas Murry, Lauren Aquino, Justin :
Mathews, Andry Oei, Ariel Jaduszuwer, :
Neelam Bhalakia, Stratton Lee, Zachary :
Berman, Lei Ju, Mian Jan, Daniel         :
Levine, Adam Solow, Enrico Pagnanelli, :
Tuu Thampy, Marie Carroll, Jeffrey       :
Rubin, Bin Meng, David Esola, Elena :
Bernardis, David Ackers, Lynn            :
Rothman, Alan Herbert, David Waxman,:
Carolyn Gregory, Scott Rosenberg,        :
Ajit Singh, Patricia Wong, Jeff Lazinger,:
Bartholomew Omalley, 111 S 15th St :
Associates, William Hammill, Daniel :
Spitzen, Costandi Awadalla, Michael      :
Canino, Arthur Bachman, George Audi, :
Meredith Shapiro, Valsa Jacob, Farrah :
Awadalla, Jeremiah Eagan, Constantinos :
Ketonis, Michael Field, Peter Shulman, :
Gilberto Pereira, Garrett Miller, Carolyn :
Prager, Pushkar Murthy, Melissa           :
Sigmond, Victoria Chen, Steven Appel, :
Siham Abarkan, Lance Moore, Georges :
Bandlec, Hsu-Nan Huang, Mitchell          :
Kent, Rainer Westphal Trust, Caitlin      :
Cantor, David Kwasny, Jacob Lazinger, :
John Wynn, R N Jwalamalini                :
Kumaraiah, Laura Levenberg, Keerthi :
Gogineni, Anne Connelly, Arthur           :
Armstrong, Edward English, Luv Ram :
Javia, Richard Gorniak, Stephanie         :
Spaeder, Gary Grunder, Andrzei            :
Cetnarski, Chaim Ouziel, Julie Terrana, :
Nevena Simidjiysha, Adam Telem,           :
Stephen Lowe, Andrew Rosen and            :
Mahbod Mohazzebi,                         :
                          Appellants      :
                                          :
             v.                           :   No. 1824 C.D. 2019
                                          :
From the Decision of the Philadelphia :
Board of Revision of Taxes                :

                                     ORDER

      AND NOW, this 19th day of April, 2021, the order of the Court of Common
Pleas of Philadelphia County, dated October 28, 2019, is hereby AFFIRMED.

                                          P. KEVIN BROBSON, President Judge