It could'a been us! Thanks again, Councilwoman Blackwell. You were for us there when we needed you.
By Joseph A. Slobodzian
Former Pennsylvania Supreme Court Justice Russell M. Nigro has sued the city and the Center City District, contending the district's assessment for public maintenance services is not equally applied to condominium owners.
The proposed class-action lawsuit, filed this month in Philadelphia Common Pleas Court, says the district allows condo owners who bought before Sept. 13, 2005, to "opt out" of paying the property levy. The levy is mandatory for owners who bought after that date.
The former justice - defeated in a 2005 retention election - bought a $1.35 million condominium on Washington Square on April 28 and at closing had to pay $1,176 to the district to cover that year's assessment, according to the lawsuit.
Nigro, a member of the city's Board of Revision of Taxes, subsequently learned that Center City condominium owners who bought before Sept. 13, 2005, could file an affidavit and choose not to pay the district charge.
George Bochetto, the Center City litigator who filed the suit on Nigro's behalf, said yesterday that the district's assessment was really a tax, and that the collection policy violated the taxing-uniformity clause of the Pennsylvania Constitution and the equal-protection clause of the U.S. Constitution.
Bochetto called the district's assessment policy "a most peculiar patchwork, a hodgepodge," adding that he was "surprised no one has challenged this before now."
The Center City District was created in 1990, the first of several quasi-governmental improvement districts designed to make key downtown neighborhoods cleaner and safer. The district concept enabled neighborhoods to obtain public services that city government could no longer afford.
The district covers most of Center City's business and residential neighborhoods: 120 blocks and more than 4,500 properties. It is roughly bounded by the Schuylkill on the west, Sixth Street on the east, Vine Street on the north and Locust Street on the south, with extensions along the Broad Street corridor north to Spring Garden Street and south to Pine Street.
Each property is charged an annual amount that helps fund the district, this year yielding $15.2 million, according to the district's budget.
That the lawsuit is a first is about the only thing on which Bochetto and Center City District president Paul R. Levy agree.
Levy said yesterday that the district's authority to charge property owners was part of the legislation creating the agency. The opt-out exemption was created in the district's early days when condominiums were rare in Philadelphia - basically just Academy House, the tower at 1420 Locust St. behind the Academy of Music.
At that time, Levy explained, Academy House was dominated by elderly residents, many of whom said they could not afford the district's charge of about $93 each. The solution, Levy said, was to allow any condominium owner for whom the unit was their prime residence - not an investment - to file a sworn affidavit seeking an exemption.
By 2005, however, the number of senior citizens seeking the exemption was dropping and Center City was in the midst of a condominium building boom. The district's board decided to make the assessment mandatory but to allow those who had exemptions to keep them until they sold their units, Levy said.
He said he saw the exemption as an easy way of accommodating senior citizens with limited incomes, especially because the lost revenue was more than offset by voluntary contributions to the district by otherwise exempt nonresidential organizations.
"We're really talking about pennies here," Levy added.
Since the 2005 policy change, he said, the number of all district property owners with the exemption has gone from about 19 percent to 7 percent.
"We were surprised at the lawsuit," Levy said. "It's the first time anyone has challenged this, and he [Nigro] never contacted us about this before the suit. We're quite willing to sit down and talk whenever he wants."
