A low-income senior housing project in Lansford meets the criteria for tax-exempt status, a Carbon County judge has ruled.
Catholic Housing Corporation's St. Ann's School Apartments, 30 E. Bertsch St., is a charity and therefore relieved of property tax obligations to the Panther Valley School District, Lansford borough and the county, Judge Richard W. Webb ruled on Dec. 23.
However, the school district has appealed the ruling, attorney Michael Greek told Lansford Borough Council on Wednesday.
Council members were not happy. Officials are concerned that the project costs the borough for services, but contributes nothing in return. Councilwoman Rosemary Cannon remarked that the fire company was at the apartments recently for the second time to investigate an automatic fire alarm. The borough had joined the school district in the earlier appeal.
Webb wrote in his 8-page ruling that the corporation met state statutes requiring tax exemptions, and also the five-pronged state "HUP" test, which came out of a state Supreme Court case, Hospital Utilization Project v. Commonwealth of Pennsylvania.
The HUP test requires that the corporation: Establish itself as a charitable organization; provide residential housing services; establish that at least 95 percent of the housing units receive subsidies from a low-income federal housing program; establish that any surplus from the federal subsidy or assistance is monitored by the appropriate government agency; use the surplus solely for the advancement of the common charitable organization.
The school district accepted that the corporation met the first two requirements, but argued there was insufficient evidence presented at the trial that it met the other three.
The court disagreed, Webb wrote, denying the school district's appeal.
The corporation, which is a registered nonprofit and exempt from federal income taxation, appealed its tax assessment this summer. On Aug. 13, 2010, the county Board of Assessment Appeals agreed that the project, a 17-unit apartment building for low-income senior citizens, qualified as a charity and should be free from paying borough, school district and county real estate taxes.
The school district and borough appealed that ruling. A non-jury trial was held, ironically enough, on April 15, 2011. The verdict, delivered on June 7, 2011, upheld the exempt status. On June 17, the school district filed post verdict motions, asking the court to reconsider its ruling because there was not enough evidence presented at the trial and asking for a new trial or other relief.
The court on Sept. 9 denied the motions, and the district appealed on Sept. 27, questioning whether the corporation had met the burden in establishing that it was entitled to the exemptions.
The $3 million project tore down a former convent on one of two adjoining parcels at 30 E. Bertsch St. and converted the school into 17 apartments for older, low-income people. The project was largely paid for through the federal Housing and Urban Development program, which kicked in $2.5 million of the cost.
The apartments were dedicated with a ceremony in April.