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HomeMy WebLinkAbout94-06700 ".1 ~ , ~ :J GREAT COMMISSION CARE COMMUNITIES, INC., Plaintiff # 17 OLER IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA . . v. . . CIVIL ACTION - LAW CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, LOWER ALLEN TOWNSHIP, and WEST SHORE SCHOOL DISTRICT: Defendants . . 94-6700 CIVIL TERM IN RE: PRETRIAL CONFER~ A pretrial conference was held in the chambers of Judge Oler in the above-captioned case on Wednesday, August 23, 1995. Present on behalf of the plaintiff was Jack M. Hartman, Esquire, and hie law clerk, Megan McCarthy. Present on behalf of the Cumberland county Board of Assessment was Stephen D. Tiley, Eequire. Present on behalf of the West Shore School District wae Timothy J. Finkelston, Esquire. On behalf of Lower Allen Township, Robert E. Yetter, Esquire, is representing the Defendant but did not appear at the pretrial conference. No pretrial memoranda were received from the Cumberland county Board of Assessment or Lower Allen Township. This case involves the claim of an elderly care facility for tax exempt status with respect to local real estate taxes. The basis for the exemption claim is that the institution is allegedly a purely public charity. This will be a nonjury proceeding which, by separate Court Order, will be scheduled for November 29, 1995, and December 1, 1995. By the court, J ~ :~ t~ ::i CD o <.: '-;' ~ L' "" ~ ,j- " " ~ =-,.. - ~':"; ~ (.. " r;:.. .. CD " Q " ,. -' - - 'f .. , U'") : ~.; I ~ I ........ , c_, "" ~..... -= WId health care facilities and services specially designed to meet the needs of elderly persons of all religious faiths and denominations at the lowest feasible cost; (ii) The continued supporting of the religious and charitable purposes of such facilities, which further financial aid WId assistance to the aged, infirm, poor, or sick of all religious faiths and denominations in the fields of health, economics, and social welfare and to establish facilities and centers for the alleviation of their needs, financially or otherwise; and (iii) To proclaim the Gospel of Jesus Christ through the ministry of the Word of God and the playing WId singing of music. In accordance with its Articles of Incorporation, Great Commission purchased the property WId a facility (hereinafter "the Property") in 1990 for the purpose of operating The Woods as a life care community for the elderly. The living units are leased to either elderly (who average 84 years of age) or handicapped individuals. Residents are admitted to the subsidized units of the facility without regard to their ability to pay, on a first-come first-served basis. Great Commission does not intend or expect to make a profit from The Woods in the foreseeable future, and in fact has incurred substantial losses during the period of time it has operated The Woods. The motivation WId purpose for both the founding of Great Commission WId the purchase of The Woods was to provide for the essential needs of the elderly residents at The Woods, without regard to the financial status of the residents. Thus, Great Commission was founded with a charitable purpose and by the charitable efforts of those associated with Great Commission. Since its inception, The Woods has also provided services such as transportation services, 2 chaplain services, chapel facilities, specialized AI711eimer's care, and nursing scrvices. These services are provided at no charge to the residents. From the beginning, The Woods has relied heavily on the contributions of others in the form of volunteer services and donations of money and property. Such volunteer services have included counseling, pastoral services, and entertainment. Great Commission's purchase of the Property and renovation of the improvements thereon was facilitated with tax-free bonds, on which Great Commission is named as the borrower and for which Great Commission bears the responsibility of repayment. The sole source of repayment is the revenue generated at The Woods. On or about July 24, 1990, the Internal Revenue Service notified Great Commission that the operation of The Woods by Great Commission would be entitled to exemption from income taxation under 26 V.S.C. ~501(c)(3). On August 29,1994, Great Commission submitted to the Board a request for tax-exemption status for the Property for the time period 1991 to the present. After a hearing, the Board issued a decision on October 24, 1994, in whieh the Board incorrectly denied Great Commission's request. II. STATEMENT OF THE BASIC FACTS AS TO DAMAGES Great Commission respectfully requests this Court to deeree that The Woods and the Property are exempt from taxation pursuant to 72 P,S. 95020-204(3) and have been so exempt since 1991. 3 payment under Medicairl, Great Commission satisfies this criterion by subsidizing the rents of its residents up to an average of$170,OOO per year. In re SI. Mar~nret Seneca Place held that the partial subsidy of the costs of caring for an elderly person is unquestionably a charitable act. Great Commission provides residents of The Woods with transportation services, chaplain services, chapel facilities, specializcd Alzheimer's care, and nursing services. Additionally, The Woods also provides: 24 Hour Security, Restorative Therapy, Food Services, Housekeeping, Therapeutic RecreationlActivitie~, Financial Counseling, Personal and Facility Laundry, BarberlBeauty Shop Services, Personal Counseling, MaintenWlce, Snow Removal, Ambulance Services, Medical Director, Notary Scrvices, Postage Stamps, Banking Services, Copies, House Phone in Apartments, Dietician, Meal Delivery after hospital stay, Elevator addition, Tax Preparation Services and Benevolence Program. Great Commission meets the third requirement of the Hl..!f test, as The Woods benefits a substantial and indefinite class of persons who are legitimate subjects of charity. The Woods has WI open admissions policy benefiting the elderly, the poor and the infirm, pursuant to which residents are admitted to the subsidized units without regard to their financial status or religious affiliation. In In re St. Mar~aret Seneca Place. the Court recognized that if there was a vacWlt bed WId the next applicant was a Medicaid recipient, that applicant was accepted despite the understanding WId expectation that this causes financial loss to the institution. Moreover, in In..rl:. St. Marqaret Seneca Place the Court held that people whose costs are only partially covered by Medicaid payments are manifestly legitimate objects of charity and people who "cannot afford to pay". Great Commission relievcs the govcmment of some of its burden and thercfore satisfies 6 the fourth requirement of Hl..!f. The test is whether the institution bcars a substantial burden that would otherwise fall to thc government. Similar to In re St. Mar~nrct Scncea Place, The Woods was founded with the specific purpose of providing housing to the elderly irrcvoeably on a non. profit basis. Grcat Commission has committed itself to providing the ncccssary financial support to its residents as part of its outrcach ministry to the eldcrly. In its operation of The Woods, Great Commission relieves the government of some of its burdcn by providing low-rent facilitics to the elderly. But for The Woods, many of its residents would be cared for in county provided facilities. Great Commission subsidizes thc rent of many residents who cannot afford full rent, and the Great Commission subsidies average approximately $170,000 per year. Great Commission also fulfills the fifth Hl..!f criterion, that it operates The Woods entirely free from a private profit motive. The Woods is irrevocably dedicated to and operated exclusively for charitable and educational non-profit purposes. Additionally, Great Commission does not pay any salaries to six of the eight members of the Board of Directors, and the remaining two members of the Board are paid very modest salaries for the scrvices which thcy perform for The Woods above and bcyond thcir duties as Board mcmbers. The rcmainder of the facilities' staff is Iikewisc paid compensation which is commensurate with thc scrviccs whieh thc staff rendcrs. If the court dctermines that Grcat Commission is a "purcly public charity," thc second major issuc thc court must addrcss is whcthcr The Woods was founded by public or private charity. Thc third major issuc will be whcther Thc Woods is "maintained" by public or private charity. On both ofthesc issucs, Grcat Commission will ask thc Court to bc guidcd by thc unpublishcd opinion ofthc Lehigh County Court of Common Pleas in SI. Lukc's Hospital v. 7 Board of Assessmcnt of Lchillh COlIl1tt, Civil Action No. 88-C-2691 (Lehigh County for 1990). Furthcrmorc, in In re St. Mar~arct Seneca Placc, the Court held that thc nursing homc was founded by charity dcspite having loans requiring repayment. Thc court focus cd on St. Margaret Health System's eleemosynary motive of providing a place for the care of all persons in need of nursing home care, regardless t'f means, as a basis for its charitable contribution in founding the home. Similarly, The Woods was financed lurgely in part by funds made available to it by a priv!lte charitable source. These funds were uscd to establish Thc Woods and furthcr the goal of providing housing to thc elderly or handicappcd individuals who cannot pay for the cost of their care. In addressing the requirement that St. Margaret Seneca Place was "maintained" by public or private charity, the Court stated that it is not indispensable that an institution be maintained by charity, pointing to the Pennsylvania Supreme Court case, West Allellheny Hospital v. Board of PrQpertv Assessment. Appeals and Review, 500 Pa. 235, 455 A.2d 1170 (1982) which held, "one would have to be removed from modem-day realties to believe that such costs are easily subsidized [by charitable donation], even in part." 500 Pa. at 241 n.4, 455 A.2d at 1172 nA. Just us the PennsylvWlia Supreme Court held in In re SI. Marlluret Seneca Pluce repayment of loans does not preclude St. Murguret Sencca Place from being "maintained" by charity, this Court should also so find for Great Commission. IV. SUMMARY OF LEGAL ISSIJES At this time, Greut Commission does not foresee that it will be neccssury for thc Court to resolve any issues other than those set forth in thc prcceding section of this Memorandum. 8 VII. CURRENT STATUS OF SETTLEMENT NEGOTIA nONS There have been no settlement negotiations to date. Respectfully Submitted, JACK M. HARTMAN ATTORNEY AT LAW ('(;11'4 ,(I#I11i".,sI[L'/ ,Juck M. HartmWl, Esquire Supreme Court I.D.#21902 One Keystone Plaza, Suite 107 Front and Market Streets P.O. Box 786 Harrisburg, PA 17108-0786 (717) 232.3046 COUNSEL FOR PETITIONER, GREAT COMMISSION Dated: August 18, 1995 10 . . CERTIFICATE OF SERVICE I, Jack M. Hartman, Esquire, hcrcby certify that I am this day scrving a copy of the foregoing document upon the person(s) and in thc mWlner indicated below, which service satisfies the rcquirements of the Pennsylvania Rulcs of Civil Procedure, by depositing a copy of same in the United States mail, first-class postage prepaid, as follows: Matthew M. Hoffman, Esquire Steele & Hoffman 422 Frick Building Pittsburgh, P A 15219 Counsel for West Shore School District Stephen D. Tiley, Esquire Assistant Cumberland County Solicitor 5 South Hanover Street Carlisle, P A 17013 Counsel for Board of Assessment Appeals Robert E. Yetter, Esquire Metzgcr, Wickersham, Knauss & Erb Mellon Bank Building 111 Market Street P. O. Box 93 Harrisburg, P A 17108.0093 Counsel for Lower Allen Township JACK M. HARTMAN, ATTORNEY AT LAW ~iM /11 J'ftiYJ({I/LU/( Jail M. Hartman, Esquire Suprcme Ct. I.D. #21902 One Keystone Plaza, Suite 107 Front and Market Strects P. O. Box 786 lIarrisburg, PA 17108.0786 (717) 232-3046 DATED: August 18, 1995 Attorney for Petitioncr, Grcat Commission Carc Communities, Inc. GREAT COMMISSION CARE ) IN THE COURT OF COMMON COMMUNITIES, INC., ) PLEAS OF CUMBERLAND ) COUNTY, PENNSYLVANIA Petitioner, ) ) v. ) ) Docket No. 94.6700 Civil Term CUMBERLAND COUNTY BOARD ) OF ASSESSMENT AND ) REVISION OF TAXES, LOWER ) ALLEN TOWNSHIP, WId WEST ) SHORE SCHOOL DISTRlCT, ) ) Respondents. ) Assessment Appeal PRETRIAL MEMORANDUM OF THE WEST SHORE SCHOOL DISTRICT Respondent, West Shore School District ("District"), by its attorneys, Steele & Hoffman, submits the within Prtlrial MemorWldum pursuant to Cumberland County Rule of Civil Procedure 212-4. STATEMENT OF FACTS--EXEMPTION Petitioner, Great Commission Care Communities ("Great Commission"), avers that it owns and operates a living facility for the elderly in Lower Allen Township, Cumberland County, known as The Woods at Cedar Run ("The Woods"). Petitioner avers that The Woods operates strictly as a non-profit, public charitablc facility with an open admissions policy on a first-come, first-served basis. The District is without sufficient information at this time to fully respond with its own statements of facts abscnt certain documents which it has requested from the Petitioner. Counsel for the Petitioner has indicated his willingness to produce the requested documents with the need for formal proceedings by letter dated August 14, 1995, although the District has not yet received those documents. The District respectfully requests that a trial date be postponed until the District has had reasonable opportunity to review the requested documents from counsel for Petitioner. A Septcmber trial date would unfairly prejudice the District in Its preparation for the same, From the Information that the District has received, however, it appears that Great Commission is not operating on a strictly charitable basis WId does receive rents from at least a percentage of its residents. Therefore, thc burden rests on Petitioner to prove that It Is operating purely as a public charity. If Petitioner is only able to prove that a portion of the property is operated on a public charity basis, then, at the very least, WlY exemption must only be proportionate to the amount of property uscd in such a charity mWlner. STATEMENT OF FACTS--DAMAGES To the extent that WI exemption is found to be appropriate for Petitioner, damages would consist of a refund of the taxes paid by Petitioner during years subsequent to 1991, In WI amount proportionate to the exemption granted. If no taxes were paid during these years, there would be no damages, STATEMENT OF ISSUES--EXEMPTION AND DAMAGES The basic issue regarding the Petitioner's claim for tax exemption is whether The Woods is operated on a purely public charity basis, If The Woods is not operated in such a 2 mWlner. no exemption should be granted to Petitioner. The basic issue regarding damages is whether the Petitioner has paid local real estate taxes in previous years for which it is now seeking a retroactive exemption. Furthermore, any damages awarded must be proportionate to the exemption grWlted if the exemption is only partial. SUMMARY OF LEGAL ISSUES Petitioner's averment that a nonprofit corporation has been determined to be exempt from federal income taxation by the Internal Revenue Service is not relevant to the determination of whethcr such corporation should be exempt from real estate taxes by local subdivisions as a "public charity." The issue in the present appeal centers on whether The Woods is operated purely as a public charity and reference to the federal exempt status should be stricken and inadmissible. LIST OF WITNESSES The District reserves the right to call WlY representative of the Petitioner and/or any resident of The Woods. The District also reserves the right to call WlY official or representative of the Cumberland County Board of Assessment and Revision of Taxes, as well as any other witness it deems appropriate, LIST OF EXHIBITS The following is a list of exhibits which the District intends to offer into evidence. The District also reserves the right to supplement this list, and it in no way is intended to be a final list of exhibits to which the District will be limited, 3 Ul . .... m Ul " a: I<- ~f-<~ ~ W 1'1 0 ... ~ 13 Ul " .., 01 Ul .... f-<[<JO "" 0 1J :0- QJ '" ." Z~ III 0 >l f-< 1<-1<- Ul III m o-l 00 F.l QJ /.oJ ::> u 0 "" Ul ..... ;.>;<>: HZ <( z ~ .,., ~Z:': :;is Z - l- E; Z > o . o w 0 .... ~ ... .f-< f-< Ul:::S: ~ I&J M 0( ~ "" U OVl~U ~~ W . j a: 01 Z .... ~HHH U :E m ~ 0( 0 . 0 ..... ~~~~ 1: or( ~ l(:> U ~ 0 0"" 3i:1 "r I;; 0 " .... zu... o Z m)- III ~. III I<- '" o z " ~ 0: a: d ~ 0 I .......,., ~~O~ ~O 0 " Ul III o f-< Of-< j~zta:~ ~ U a.. Ul ..... U o-l u L . ~E~ > !~~~ /.oJ,," _ .J;:; .., ~ 0 Ul... 3: w . 0 0 Z'" . 1: ~ U Z Of-< OUl a: m ~ .... ji [;j~ w !!! CJ . e ~ /.oJUl<>:ga ga~ N . u ~eJ~O !;; ~ Z 0 UlO'" ... I=> t:>U U<o-lUl ::!: GREAT COMMISSION CARE COMMUNITIES, INC., Petitioner IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Docket No. 94-6700 Civil Term v. CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, LOWER ALLEN TOWNSHIP, and WEST SHORE SCHOOL DISTRICT: Respondents. Assessment Appeal RESPONSE OF LOWER ALLEN TOWNSHIP TO EXEMPTION APPEAL Respondent, Lower Allen TownShip ("Township"), by its attorneys, Metzger, Wickersham, Knauss & Erb, submit the within response to the Petition of Great commission Care communities, Inc., in Appeal From an October 24, 1994 Decision of Cumberland County Board of Assessment and Revision of Taxes Denying Request for Exemption From Taxes, averring in opposition thereto as follows: 1. Admitted in part and denied in part. The Township admits that Petitioner is a pennsylvania non-profit corporation having its principal place of business in Cumberland county. The Township admits that Petitioner operates a facility known as "The Woods at Cedar Run." After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the averment that The Woods is operated as a living facility for the elderly and, therefore, denies such averment. 2. Admitted. 3. Admitted. 4. Admitted. 5. After reasonable investigation, the Township is without knowledge or information suffioient to form a belief as to the truth of the averments set forth in Paragraph 5 of the Petition and, therefore, denies the same. 6. Admitted. By way of further response, however, the faot that a non-profit oorporation has been determined to be exempt from federal inoome taxation by the Internal Revenue Servioe is not relevant to determining whether such corporation should be exempt from real estate taxes by local subdivisions as a "public charity," and, therefore, the averments set forth in Paragraph 6 of the Petition and Exhibit "B" thereto should be stricken as impertinent. 7. Admitted in part and denied in part. The Township admits that the Petitioner purchased the subject property in 1990. After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the remaining ~verments set forth in Paragraph 7 of the petition and, therefore, denies the same. a. After reasonable investigation, the Township is without knowledge or information suff icient to form a belief as to thEl truth of the averments set forth in Paragraph a of the Petition and, therefore, denies the same. 9. After reasonable investigation, the Township is without knowledge or information suff icient to form a belief as to the -2- truth of the averments set forth in Paragraph 9 of the Petition and, therefore, denies the same. 10. After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 10 of the Petition and, therefore, denies the same. 11. Admitted in part and denied in part. The Township admits that some of the residents of The Woods are provided with some level of nursing services. After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the remaining averments set forth in Paragraph 11 of the petition and, therefore, denies the same. 12. After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 12 of the Petition and, therefore, denies the same. 13. After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 13 of the petition and, therefore, denies the same. 14. After reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 14 of the Petition and, therefore, denies the same. -J- 15. The averments set forth in paragraph 15 of the Petition consist ot conclusions of law, as to which no response is required, such averments being denied by operation of the pennsylvania Rules of civil Procedure. To the extent a response is required, after reasonable investigation, the Township is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 15 of the Petition and, therefore, denies the same. 16. Admitted in part and denied in part. The Township admits that on or about August 29, 1994, the Petitioner petitioned the Board of Assessment and Revision of Taxes for tax-exempt status. It is denied that such petition involves the taxable status of the property prior to the 1995 tax year. The Township admits that the Board issued a decision denying Petitioner'S request. It is denied that such decision was incorrect. 17. The averments set forth in Paragraph 17 of the Petition consist of conclusions of law, as to which no response is required, such averments being denied by operation of the Pennsylvania Rules of civil Procedure. To the extent a response is required, such averments are admitted in part and denied in part. It is denied that the Board has unfairly discriminated against the Petitioner. It is denied that the subject property is similar to Bethany Village Retirement c~nter, The Church of God home, The Episcopal Towers, Green Ridge Village or Forest Park Nursing Home. It is admitted that if and to the extent Petitioner can establish that -4- - ,. ~ . . 2. Admitted, 3. Admitted, 4, Admitted. 5, After reasonable investigation, the District is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 5 of thc Petition and, therefore, dcnies the same, 6. Admitted. By way of further response, however, the fact that a nonprofit corporation has been determined to be exempt from fedcral income taxation by the Internal Revenue Service is not relevant to determining whether such corporation should be exempt from real estate taxes by local subdivisions as a "public charity," and, therefore, the av,;:rments set forth in Paragraph 6 of the Petition and Exhibit "B" thereto should be stricken as impertinent, 7. Admitted in part and denied in part, The District admits that thc Petitioner purchased the subject property in 1990. Aller reasonable investigation, thc District is without knowledge or information sufficient to form a belief as to the truth of the remaining averments set forth in Paragraph 7 of the Petition and, therefore, denies the same. 8. After reasonable investigation, the District is without knowledgc or information sufficient to form a belief as to the truth ofthc averments set forth in Paragraph 8 of the Petition and, therefore, denies the same, 9. Aller reasonable investigation, the District is without knowledge or information sufficient to forlll a belief as to the truth of the averments set forth in Paragraph 9 of the Petition and, therefore, denies the same, 10. Aller reasonable invcstigation, the District is without knowledge or information sufficient to form a belief as to the truth ofthc averments set forth in Paragraph 10 of the Pctition and, therefore, denies the same. 2 . . . ... II. Admiued in part and denied in part, The District admits that somc of the residents of The Woods are providcd with some level of nursing services, After reasonable investigation, the District is without knowledgc or information sufficient to form a belief as to the truth of the remaining averments set forth in Paragraph 11 of the Petition and, therefore, denies the same. 12, After reasonable investigation, the District is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 12 of the Petition and, therefore, denies thc same, 13. After reasonable investigation, the Distriet is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 13 of the Petition and, therefore, denies the same, 14, After reasonable investigation, the District is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 14 of the Petition and, therefore, denies the same, 15. The averments set forth in Paragraph 15 of the Petition consist of conclusions of law, as to which no response is required, such averments being denied by opcration of the Pennsylvania Rules of Civil Procedure. To the extent a response is required, after reasonable investigation, the District is without knowledge or information sufficient to form a belief as to the truth of the averments set forth in Paragraph 15 of the Petition and, therefore, denies the same. 16. Admitted in part and denied in part, The District admits that on or about August 29, 1994, the Petitioner petitioned the Board of Assessment and Revision of Taxcs for tax-exempt status. It is denied that such petition involves thc taxable status of thc property prior to the 1995 tax year. The District admits that the Board issued a decision denying Petitioner's request. It is denied that such decision was incorrect. 17. The averments set forth in Paragraph 17 of the Petition consist of conclusions of law, as to which no response is required, such averments being dcnied by operation of the Pennsylvania Rules of Civil Procedure. To the extent a response is 3 -a. ..~ kaarinl on tilt n.attefs Nt faRk ift the PelUteft shall \1. lI,..h~tflllM UpgR 1M filiAl ef a IIl'1llilpl iR eeeerdenec with RI1\' 21"-1 of II." R..lu of litis C9"R~ BY THE COURT: ~~i- rJ tlL,k~ Of: . . . 7 J, exclusively for the following charitable and/or religious purposes: (i) The development, purchase, owning, renting, bullding and operating of continuing llfe care retirement communities with elderly housing including life care, and full-care nursing, which provides the residential, spiritual, financial, recreational and health care fac11lties and services specialiy designed to meet the needs of eiderly persons of all religious faiths and denominations at the lowest feasibie cost; (i1) The continued supporting of the rellgious and charitable purposes of such fac11lties, which further financial aid and assistance to the aged, Infirm, poor, or sick of all religious faiths and denominations in the fields of health, economics, and social welfare and to establlsh facilities and centers for the alleviation of their needs, financially or otherwise; and (111) To proclalm the Gospel of Jesus Christ through the ministry of the Word of God and the playing and singing of music, A copy of Great Commission's Corrected Articles of Incorporation is attached hereto as Exhibit . A. and Incorporated by reference herein, 6. On or about July 24, 1990, the Internal Revenue Service notified Great Commission that the operation of The Woods by Great Commission would be entitied to exemption from Income taxation under 26 U,S,C, OSOI(c)(3). A copy of the July 24, 1990 -3- Notice from the Internal Revenue Service is attached hereto as Exhibit "B" and incorporated by reference herein. 7. In accordance with its Articles of Incorporation, Great Commission purchased the Property in 1990 for the purpose of operating The Wood] on the Property as a life care community for the elderly. The motivation and purpose for both the founding of Great COMmission and the purchase of The Woods was to provide for the essential needs of the elderly residents at The Woods, without regard to the financial status of the residents, Thus, Great Commission was founded with a charitable purpose and by the charitable efforts of those associated with Great Commission. 8, Great Commission's purchase of the Property and renovation of the improvements thereon was facilitated with tax-free bonds, on which Great Commission is named as the borrower and for which Great Commission bears the responsibility of repayment. The sole source of repayment is the revenue generated at The Woods. 9, Since its inception, Great Commission has operated The Woods on the Property as a purely public charity, and The Woods has been maintained and enhanced to a significant degree by the charitable efforts of individuals associated with Great Commission. -4- 10. The operation of The Woods by Great Commission advances a charitable purpose by providing housing and care for elderly individuals who average 84 ycan of qe, regardless of those Indl~'lduals' ability to pay rent for the units In which they live, ResIdents arc admitted to the facility without regard to their ability to pay, on a first- come, first-served basis. Great Commission docs not intend or expect to make a profit from The Woods In the foreseeable future, and In fact has Incurred substantial losses during the period of time it has operated The Woods, 11. In the course of operating The Woods, Great Commission donates a substantial portion of Its services gratuitously. For example, Great Commission has annually subsidized the rents of its residents up to an average amount of $170,000 per year. Additionally, Great Commission provides residents of The Woods with transportation services, specialized Alzheimer's care, nursing services, chaplain services, chapel facilities, and the like, 12. The Woods benefits a substantial and Indefinite class of persons who arc legitimate subjects of charity, in that The Woods has an open admissions policy benefiting the elderly, pursuant to which residents are admitted without regard to their financial status or religious affiliation, -5- 13, In Its operation of The Woods, Great Commission relieves the government of some of Its burden by providing low-rent facilities to the elderly, a number of which would qualify for admission to county facilities if they were not residents at The Woods. Great Commission subsidizes the rent of many residents who cannot afford full rent, and the Great Commission 3ubsidies average approximately $170,000 per year. 14, Great Commission operates The Woods entirely free from a private profit motive, Since Great Commission began operating The Woods, the facility has generated substantial1osscs, Additionally, Great Commission does not pay any salaries to six of the eight members of the Board of Directors, and the remaining two members of the Board are paid very modest sa1aries for the scrvices which they perform for The Woods above and beyond their duties as Board members. The remainder of the facilities' staff Is likewise paid compensation which is commensurate with the scrvices which the staff renders. 15. As a purely public charity which was founded and Is maintained by charity, The Woods and the property on which It Is located are entitled to exemption from real estate tax pursuant to Article VlI of the Pennsylvania Constitution and 6204(a)(3) of the General County Asscssment .taw (72 P,S, 65020-204(a)(3)), 16. On August 29, 1994, Great Commission submitted to the Board a request for tax-exempt status for the Property for the time period 1991 to the prescnt. After -6- a hearing, the Board issued a decision on October 24, 1994, in which the Board incorrectly clcnied Great Commission's request. A copy of the Board's decision is attached hereto as Exhibit .C.. 17. The Board has unfairly discriminated against The Woods, in that there are several other facilities located in Cumberland County which operate, at least to some extent, on a basis similar to Great Commission's operatlon of The Woods and arc deemed by the Board to be exempt, at least in part, from real estate taxation, Such facilities include the Bethany Village Retirement Center in Mechanicsburg, The Church of God Home in Carlisle, The Episcopal Towers faclllty in Shippensburg, Green Ridge VllIage in Newvllle, Messiah Village in Mechanicsburg, and Forest Park Nursing Home in Carlisle. To the extent that The Woods and the above-named faclllties operate similarly as purely public charities, The Woods should be afforded the same tax-exempt status as these faclllties, WHEREFORE, Great Commission respectfully requests this Court pursuant to 72 P.S. 05020-518.1 to conduct a hearing on Great Commission's appeal from the October 24, 1994 decision of the Board and, following the hearing, to sustain this appeal, to reverse the October 24, 1994 decision of the Board, to decree that The Woods and the Property arc exempt from taxation pursuant to 72 P,S, 05020-204(a)(3) and have been so exempt since -7- 1991, and to award Great Commission the costs of this action and any other relief the Court deems just and appropriate, ECKERT SEAMANS CHERIN & MELLOTl' -r:-~ a. ~ Timothy A, oy, Esquire Supreme Ct. I.D, #47597 One South Markel Square Building 213 Markel Street Harrisburg, PA 17101 (717) 237-6000 Attorneys for Petitioner Great Commission Care Communities, Inc. DATED: 1711I November 23, 1994 VERIFICATION I, M, Neil Enloe, hereby verify and state that the facts set forth in the foregoina document are true and correct to the best of my information, knowledge and belief. I understand that false statements herein are made subject to the penalties of 18 Pa, C,S.A. 04904 relating to unsworn verification to authorities. ~-u~ M. ell Enloe ~ )..;;. PI .... \jo. (). ').. "- ~J i r , ,- i , I { ,\ -- .\ exhibit A .\'''.,111................'-.1'...'11..'.11111 NC'UIU@ jfJ73 --0 :I.l~ l1Pdtoclono, 1C any, A. :lOY l)til contained In tho InotruQlInt und.r vhIen duch prop.rty I. rocalvad. (Ill) To t'ocelvQ any propet"CY, roal, per,onGl or lldxcd, In truat, ~ndQr tho tor~&J oC any \/11.1, doad oC truGt, or othof truae In.truQont Cor tho (Of890109 purpo,ol or any o( thaD (but tor no Qtha~" purpolUloll) I Gnd In admlnl.terlnq tho aAaG to cArry out the dlrectlona and exorclse tho po~er8 containod to,th_ cruet Instrument under vhlch the proporty ta racolved, Includlnq tho expenditure at tho principal, AO vell cu tho incomG, Cor ana or lUoro aC such purposOD. ..... ... (II) To recolve, to~o tttle to, hold, and uae tho proceeds and Incoll1O oC .toc)t.e, bonch, obllqAtions or othor IiIOcurltle. oC any corpor.:tion or corporatlonu, dOluutlc or tOfelqn, but only tor tho (oragolng purpoaoo, or dOCO at thOQ, (111) In '1onoro'll, to oxorcloo Any, All And every pover \/hlch A. corporAtion organ1z.od under tho PannoylYAnll1 Hon- protit corporAto Lev ot 1988 c.,n be Authorl:od to exercise, but not eny paver vhlch vould b. In contltct vlth Sact!on SOl(c) (l) oC the Interna) ROY8nUe Code oC 1986, )JlTICL~ (. Thl. corporotlon 10 ono vhlch doos not contocplAte pecu..n1l'\ry gAin or protlt, lncidentAl or othervlao, And no part ot i~1 net Ql1:ninqli .....111 inu:o to tho benetit at or be dilltributable to its d!.:ectorl, z:lanaqero, o!tlcers, Agents, or other prlvate p-er:\on., Clxcept that t.ho corporaticn .hell ba Quthorl:.d end .cpo.....e:ed to pay raolionablo cocponaAtlon tor lIorvicG' render.d and to ee.ko pay=ant. And di.tri.butlon. in rurth.ranc. ot It. charitable pUrpOG8'. Thl. corporation .h1111 hAvo the rlqht, but not the duty, to cherqo Caoa or prlcu Cor It. .ervie.. And product. lI.nd ,to recalva 8uch 1ncomo, but all luch lncldental lnco=e .hall be epplled to the =elntenance and operation oC It. lavtul actlvlt!e.. Ho .ubetant!ol part oC tho octlvltle. oC the corporation .hall be tho cart"ylng on o~ projJl1C]AndA, or othor.i.. att.nptlnq to IntluencQ loqillAtlon, And tho corporation .hall not pArttclpete or lntervano ln (lncludlnq the publl.hlnq or dl.tdbutlon ot .tate:ant.) any pol1tlc~1 cacpelqn on t..halt or (or 1n oppo.1tlon to) any candld~te tor publlc otrlca. 1Jl'l'ICLR ~, Hot....lth.t~ndlnq eny othor provillon at th..e article., the corporAtion shall not" C4l.'ry on any othGr actlv!tlulil not pu,.ltted to b. cA:-:l.d on (0.) by 11 corpo:,ation eXu:lpt irotl tederal incoc.. tax under Soction 501(c)(J) or tho Intorna,l Rovenuo Coda or 1986, or corrospondlng aoetion or any Cuture rederAl t~X code, or Cb) by 0 corporation, contributlona to "'plch a.rn d.d~c:lble under Sletien 110(c) (2) or t.ho Intornal Rovenue Cod. oC 1986, or cor:ospondinq Goetie" at any tuturo toder~l tax codo, 1Jl'l'ICLl 6. 1. porpetual. Tho tar.! Cor \lhlch thts corporotlon ahAll exlet AATICL~ 7. boal., Th1& corporo.tlon irl orqani:od on a nonstae}.::, 2 exhibit B '" ."" ,.....' 'n"" .,. .(" AP~-:::::"-'?3 TIJE 10: 00 L.UZ I ttDER~ It. .JACODS 1 ::(tl.'..:.l:I~~QO . '.nternl' RavenulI s.rvlce Department 01 the Trea9Ury W..hlngton. cc ~0224 Perton 10 Conlact: The Gre~t Commission rvanqel1st1o ^1I.oc1~tion 118S 8o!11nq Sprinq ROAd H.chanicsbu~JI PA 17055 TOIn;n4n&mIbi~ed 1 A ndar ~ftrqap~fo~-6701. O g:EOI!\/2-5 .,.. . J U L 2 4 1990 Our. '1'axpayer I ~hi. is response to your ru11nq request ot ~uly 20, 1990. concerninq a propo~ed chanqa in your activities. . You Were incorporated on Decembar 28, 1972. On August 5, 1975, you vora recognized ~e exempt trom federal income tax as an organization de.oribed in section 501(g)(3) ,nd olassified as organization dlscribed in section 599(a)(2) ot the Code. Your Articles of Incorporation provided that you vera orqanized for IIreligious-nonprofitll purposes. On November 1, 1989, you amlnded your Articles of Incorporation 10 that your Articles no~ read as followsl ~hi. oorporation i. o~qanized ~nd will be ope~a~.d e~clusiv.ly for ~8li91ous and oharitable purpose., and does not cont~platl pecuniary iain or pratit, incidental or otherwise. Morl ~pGQiticallY, the corporation will be orqanized and op~rated exolusively ~or the following oharitable and/or reliqlous purpQGes. (i) The development, purchaso, ownlnq, rentinq, and buildln9 ot houeln~ for the elderly ino1udinq assisted livlnq, ful1"oare nursinq, and cantinuin9 life care retirement communities which provide the reeidentiax, spiritual, tinancial, recreational and health-care tacilities and services speoiallY designed to ~eet the neod~ ot eldorly persona of all reliqlous faiths or denomination. at tHe lowee~ foasible ooat and the continued 5upportinq of the reliqious and charitable purposes of suoh faoilities ~hich turther financial aid and alsistance to the aged, infirm, poor, or sick ot all reliqious faiths and denominations in the fields of health, econo~ics, and Gooi~l ~Ql~are and to ostl~lish tacilities and centers tor the alleviation of their needs, t1nancially or otherwiue, (il) thG continuod supportinq ot the reliqious and charitable purposos ot such tacilities, which turther P.o: INCL #3 . . 1 The Great Com=lualon EVan~.liatic A.sociation financial aid and assistance to the aqed, infirm, poor, or .i~k ot all r.liqio"o faith. and denominations in the ti.14. ot htalth, economica, and loc1al .weltare and to ..tab11.h n..ds, tinancially Otherw1../ ~nd (iii) to proclaim the Goapel ot Jesu_ Christ throuqh tho ministry ot the word at Qod and the play in; and .inqinq of music. On Nov.~er 9, 1989, ~ou ~oto to the Di.trict oirector, Baltimore, concerning your amendQonts to your Article. of Incorporation and your By-LaW'. fh. Dietrict Director forwarded your request to the National Office, wherl it was det.~1ned that ~scauso ot the .ubstantial Ohanqas in your ac~ivltle., ~ou ehould r.~Q.t a private letter rulinq. By l.tter dated July 20, 1990, you have re~lstod a rulinq that your exemption under .eotion SOl(o)(~) ot the Code will QOntin~4 although you will change yo~ aotivities. your ~rinc1pal activity, ein~o your incorporation, hAa been the operation ot a ;oapel =~.lc group, the Courier., who bave pertormed in oyer 8000 churoh... You h~Ye conduoted a weekly television program in Pennsylvania tor tha past 2~ years. Your direotors have now dete~lned th.t you should expand your activities to inolude the proviaion ot retirement and nur.ing taoilities for the aged. You hAVO r.cently expanded your BQard oC Directors to include two directors witb substantial experience in nursinq home ad=inistration. While you will expand your actiVities, you will ~ontinue to perto~ your qospel =usic and =l.alenary activitie.. You recently created a sl~.idiary 1n order to pur~has. and operate a home tor the aqed. The new orqanization, th. Great co=mlssion Care communiti.., has '12,080,000 ot bonds outstanding which were used to purchase The Woods at Cedar Run, You have now determined that you wish to purchase a nursinq home. ~hi. will enable you to provide skilled nursin; care to the residents o~ ~he Wood. at CGda~ R~, where the avorage aqe ot the resident is oVer 80 years old. The seller is A Pennsylv~niA 1imitad pa~ner8hip, sus~.hannA Center tor Nurqin~ and Rehabilitation. The pa~ner.bip has existed since 19SJ, it con~ists at a general partnor and 22 limited partners. The qeneral partner is Frank Caswell who has been manaqinq the center, ~aU examined a~ least tour nursing homes betor- you chose Sus~eh4nna. ~cu made your d.oision bA~.d on criteria you have established, inoludinq the age and location ot the tac1lity. J fhe a~eat Commission Evln~eli.tiQ ABsoeiation You will retain Frank caswell ae the maneqer ot Susquehanna. You have detor=1n84 that the continuity of ~ar.aqament vill help insure the success ot the projeot. . Section 501(0)(3) ot the Cod. ~rovide. tor the'exemption from tederal 1nco=e tax ot organizAtion organized and operated exclusively tor charitable purposes. Seotion 1.501(0) (3)-1(a) (1) of the Income ~ax Requlations provides that in order tor an orqanization to be exempt under siction 501(e)(3) ot the cod. it must be both organized and operated exolusivelY tor one or ~or8 ot the p~oee8 specified in suoh Bection. It an organization tail. to meat either the organizational t.st or the operational teat, it is not exempt. , seotion 1.S01(o) (3)-1(b) (1) of the reiUlations provides that an orqanizatlon is orqanized exclusively tor one O~ mora exempt purpOGGS only it ita a~icl.. of organization limit tha purposes ot oucb organization to one or more exempt purposes and the articles do not IxprQI.1y empower the organization to tngaga, otherwise than as an insubstantial part of i~1 activities, in aoti~!ties Which in ~lemeelve8 are not in turthe~ance ot one or more exempt purpo6es. seotion 1.501(0) (3)-1(0) (1) of tho requlations ~rovia'l that an orqanization will be rtqarde~ aa "ope~at.4 exclusively" for one or ~or9 exempt purpose. only it it enqaqes primarily in activities which acoomplish one or more of .uch t~.mpt purpOSGS specified.!n section 501(0) (3). An orqaniz~tion will not be 80 roqarded it more than an inaUb.~antial part ot itl activities i. not in furtherance ot an exempt purpose. Section 1.S01(e) (3)-1(0) (2) at the requlations provi~es that an orqanlzation i. net oplrated exolusively for one or more exempt purposes it ita net earnings inure in whOle or in part to the benetit ot priVAte shareholders or individuals. The section cross references thQ definition ot p~ivata sharehold.r which is contained in section 1.801(a)-1(c). That section provides that the words. privata Iharaholder or individual in section 501 tafer. to persons havin~ a personal and private interese in tbe activities of the orqanization. Section 1.501(0) (3)~1(d) (1) (ii) of the regulations provides that an organization is no~ organized or operated eXclusivel~ tor one or ~ore ot the purposes speoified in section 501(e) (3) o~ the Code unless it served _ public rather than a private interost, Thug, to meet the requirements of this subdivision, it is necossary for an organization . 4 ~h. Q~.at commission lVLnqlliatic A81Qc1ation ~o ..tabli.n thAt it is not cr~anl:ed or operated tor the benetit ot privati interests .ucb A' designated lndlvi~uals, the creator or his faMilY, shareholders ot the c~anization, or per,ons controlled, directly or in41rectly, cy such private inter~at8. Section l,SOl(c) (3)-1(d) (~) ot the re9Ulations statee that the term "cl\aritabh" is used in section !I01(o) (3) 0' tho Code in ita qanorally ace.pted legal .ense. such term includea tho relief ot the poor, distressed, and the promotion ot health. Rev. Rul. 76-314, 1976-2 C.B. 351, indicates that an orqanization that is orqanize4 and operato4 in order to provide skilled nursinq ie exempt trom federal income tax as an orqanlzation described in .eotion !Ol(o) (3) at the Code. ~h. organl;ation provided its nursinq faoilities in a home health care settlnq. Rev, Rul. 79-17, 1979.1 e.B. 193, provides ~at a nonpro~it hospice that p~ovided .ervice. on both an inpatient and outpatient basis vas exe=pt as an orqanization described in section SOl (c) (3) of the Cod.. By alleviatinq the ~.ntal and physical distress of persons vho ar$ ill, the orqan!2Ation i. described in section 1.!Ol(c) (~)-l(d) (2) of the :r:equlaUons. Rev. Rul. 80-114, ~S80-1 C.S. 115, provides that an o~~anization that operates A health care facility tor patients under the care ot Christian Science praotitioners is exempt from 'ederal income tax as an orqanization described in section !Ol(c)(3) ot the Code. It vas conolude4 that the organization was operatinqa health care facility that serves charitable purposes even though the organization vas not olas.itied as a hospital. . In the qeneral law ot Charity, the promotion of health has traditionally been considered a charitable purpose. See Rest~temen~ l$eoon~l ot Trugts, 368, 372. 10u have as~e~ whether the expansion ot your activities by the purchase and operation o~ a Skilled nureing fa~ility, will enable you ~o continue to be classified ag an organization described in section 501(c) (3) ot the.Code. !t is clear from thQ above citad revenuo rulings that th9 provision ot skilled nursi~q can promote health, a charitable activity. It is quite cleAr that you will be enqaqed 1n the provision of 8kille~ nursing carGo But, it ia also necessary to determine that you vill be operated for the benefit of the publio, rather than for the benet~t of privata individuals. ~PR-~O-93 TUE la:O~ ~IEIt~DEPC ~ J~CODS 13el"'~8~~(lO P.OE. ," ." 5 T~a Groat eom=ission EVanqaliatic Association ~e have exa~inGd the In'0r=at1on you haVe .ub~itt8d 1n order to determine that you will ba operated ~or publid rather than tor private purposes. We have looked at a number ot documents thAt you have IUbmitted tOl: tha purposes of obtaininq ta~ exempt bond tinancinq. In addition, we have examined the appraisal o~ the p~operty you wish to purchase. The purpOSQ ot this examination vas to d.t8~ine Whether private interests were beinq served to an impermissible degree. Fro~ the documents you hays lubmitted, we can tind no evidence that private interests are beinq served. You repre.ent that you are payinq tair market value tor the property you will buy. There is no evidence that you ara controlled by tnA Geller. Your Board ot Oirectors il the eame as when you wore created, excspe tor the addition o~ two p.r~ons with expertise in nurein~ home administr~tlon. ~herQ i. no evidence that you w111 have contracts that will benetit either the sellers or your ottiC6rs or dir.otor~. Tho only relationship you will have with the .eller, is your employment ot Frank Caswell.' the taoility manaier. You have established that you have a .Ubstantial bu.iness . purpose for retaininq Mr. caswell 80 that you can oontinU6 the sucoessful manaqament ot the tacility. BaGed on the I!oreqoinq aMlysis. ....e rule that the expansion of your aotivities to inolude the ownership and operation ot tho nUrsin~ home will not .tt.eQt your exempt otaeu. provided you operate as described in your submissions. This letter expreBsea no opinion concerning the'mar~eta~ility, reliability, or value, ot ehe bonds to be issued on vour behalf. In addition, no opinion is expressed. oonce~inq the accu~}~y ot the bond documents you have eubmitt8d. This lettet' also does not ~adQ a dotar=inat1on regarding wh~ther tn. p~eha.8 ot property io at fair \Ilarltet value. A copy ot this letter i. beinq !orvarded to your Oistric~ Diroctor, Baltimore, MD. Please kt.p A oopy in your pe~anent reoo~dB. SincerG1~rs, .J {U.<.,1'e .~ C...e, Jeannn S. Gossa chint, Exempt anizations RU1-inqll Br .., ,..,. .t.,., ""...."" .." ,.., "". Wit IO.'-"UD (t) Exhibit c to if d d :1__ ] ]~ -:::r 1'..) IJ en ,- IJ) . ~:i ('. IIi () = , . <.) Q.- " .' IJ) J~D m .. " . 5:) It) ::t "':::J- <,J () m ~ .;q- lY) r- ~ ()- - m '::t- \J '" - :0- <=> +i = -tJ ~ ~ . . GREAT COMMISSION CARE COMMUNITIES,INC" Petitioner, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. CUMBERLAND COUNTY BOARD OF : Docket No. 94-6700 Civil Term ASSESSMENT AND REVISION OF TAXES, LOWER ALLEN TOWNSHIP, Md~TSHORESCHOOL DISTRICT , Respondents : Assessment Appeal RETURN OF SERVICE I, Samuel W. Sieger, hereby certify that I served the Rule Md Petition of Great Commission Care Communities, Inc. In Appeal From M October 24, 1994 Decision of CumberlMd Cou....ty Board of Assessment Md Revision of Taxes Denying Request for Exemption From Taxes upon ;r:..;,llvl/,;.".... for Respondent CumberlMd County Board of Assessment Md Revision of Taxes, I Courthouse Square, Carlisle, PA 17013, on P-<c-",. f,~v ;;1" ,/, 1994, at .7:!.{'- r: ,m, J.!7JJ/ '1'1 Date . . / . <-~~'#"('/~"~~i Y!~/ Samuel W. Sieger GREAT COMMISSION CARE COMMUNITIES,INC" Petitioner, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. CUMBERLAND COUNTY BOARD OF : Docket No. 94.6700 Civil Term ASSESSMENT AND REVISION OF TAXES, LOWER ALLEN TOWNSHIP, and WEST SHORE SCHOOL DISTRICT, Respondents : Assessment Appeal RETURN OF SERYXCE I, Samuel W. Sieger, hereby certify that I served the Rule and Petition of Great Commission Care Communities, Inc. in Appeal From an October 24, 1994 Decision of Cumberland County Board of Assessment and Revision of Taxes Denying Request for Exemption From Taxes upon / ,-; ,.... /f;.; WI... \,/'" I~ , for Respondent West Shore School District, 507 Fishing Crcck Road, Lewisbcrry, PA 17339, on Poi't! f',,, j~ .- :r IJd, 1994, at 1,'t<f,- L,m, IJI.2 / '/'1 Dale ( ~~-~)~~~~~- Samuel W. Sieger rY en ..: ~ -'l P.; Z . 0>< :s'" :sZ 00 uS ~o Oz .....:~ P::;-'lZ OP::;": O~> UIIl-'l ~:s>< =Oen ...U~ Z~~ _OP.; ..... ~n ., 'oJ -.1" r.") ., -.) .. OJ ~ 5 p::; .~ :a < -E p::; -'l U OJ ~..: Z ~P.; ... ~ 0 U -'lP'; Cilz !>P.; en- -..: t:l . u... ::: f1j Q Z "" E= ~~ 0_ 'l':s uZ ..en ...0 I7l f1j ..::s 'tIJ ~:s o en p::; 0 z..: ClU :: o P::; fIl P::; ~ ... <::: c o .0... ~ lIlen-'lenC:5 >< :;j ~~ U ~ "'~"''tlii!OJ zp.;zo:...P::; OP.;OCllen o":oP.;Q U...U5: offioen2l z...ZZo ~;;j":;;:= ;;::en-'lOU ~~p::;...en 1Il~1Xlz~ :s..::s~P::; o~o:3g UOU":en ... offi F.l z:s~i= <V,lo< ;j&l~O !:lY.<z~m ::Il<pp.... oo~op::;..... U Uo ~oo...!:l OP::;ZOIIl ~~<z::Il ~1Il~~~ 0><i:lP::;~ ~E-<p';~o iijg;P.;; o<p U U == 8 ., ~!;M~ ~ ~ Vi ~ ~ I=~~~~ ~ ~ oa.;:: ~;;!i . GREAT COMMISSION CARE COMMUNITIES, INC., Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CUMBERLAND COUNTY BOARD NO. 94-6700 CIVIL TERM OF ASSESSMENT APPEALS, CUMBERLAND COUNTY, LOWER ALLEN TOWNSHIP AND WEST SHORE SCHOOL DISTRICT, Respondents ASSESSMENT APPEAL RESPONSE OF CUMBERLAND COUNTY BOARD OF ASSESSMENT APPEALS AND COUNTY OF CUMBERLAND TO RULE DATED DECEMBER 1. 1994 RESPONDENTS, Curnberland County Board of Assessment Appeals and County of Cumberland (collectively referred to herein as "County"), by Its Assistant County Solicitor, Stephen D. Tiley, Esquire, submits the within Response to the "Petition of Great Cornrnlsslon Care Communities, Inc" In Appeal From an October 24, 1994 Decision of Cumberland County Board of Assessment and Revision of Taxes Denying Request for Exemption From Taxes," averring In opposition thereto as follows: 1, Admitted in part and denied In part. The County admits that Petitioner Is a Pennsylvania non-profit corporation having Its principal place of business In Cumberland County. The County admits that the Petitioner operates a facility known as "The Woods at Cedar Run," After reasonable Investigation, the County Is without knowledge or Information suHlclent to form a belief as to the truth of the averment that The Woods are operated as a living facility for the elderly and, therefore, denies such averment. 2. Admitted. 3. Admitted, 4. Admitted. 5, Denied. After reasonable Investigation, the County Is without knowledge or Infolmatlon sufficient to form a belief as to the truth of the averments set forth In Paragraph 5 of the Petition and, therefore, denies the same. 6. Denied. After reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 6 of the Petition and, therefore, denies the same, By way of further response, however, the fact that a nonprofit corporation has been determined to be exempt from federal Income taxation Is not determinative of whether or not the entity Is a purely public charity and therefore exempt from real estate taxes In the Comrnonweallh of Pennsylvania. 7. Admitted in part and denied In part. The County adrnlts that the Petitioner purchased the subject property In 1990. After reasonable Investigation, the County Is wllhout knowledge or Information sufficient to form a belief as to the truth of the remaining averments set forth In Paragraph 7 of the Petition and, therefore, denies the same, B. Denied. After reasonable Investigation, the County is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph B of the Petition and, therefore, denies the same. 9. Denied. After reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 9 of the Petition and, therefore, denies the same, 10. Denied. After reasonable Investigation, the County Is without knowledge or information sufficient to form a belief as to the truth of the averments set forth In Paragraph 10 of the Petition and, therefore, denies the same. 11. Denied. After reasonahle Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 11 of the Petition and, therefore, denies the same. 12. Denied. After reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 12 of the Petition and, therefore, denies the same, 13. Denied. After reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 13 of the Petition and, therefore, denies the same. 14, Denied. After reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 14 of the Petition and, therefore, denies the same. 15, Denied, The averments set forth In Paragraph 15 of the Petition consist of conclusions of law, as to which no response Is required, such averments being denied by operation of the Pennsylvania Rules of Civil Procedure. To the extent a response Is required, after reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the truth of the averments set forth In Paragraph 15 of the Petition and, therefore, denies the same, By way of further response, the applicable statute Is the Fourth to Eighth County Assessment Law (72 P.S. ~5453.101, at sic.) and in particular ~5453.202 thereof.) 16. Admitted In part and denied In part, The County admits that on or about August 29, 1994, the Petitioner petitioned the Board of Assessment and Revision of Taxes for tax-exempt status. It Is denied that such petition Involves the taxable status of the property prior to the 1995 tax year. The County admits that the Board Issued a decision denying Petitioner's request. It Is denied that such decision was Incorract. By way of further response, the averments of paragraph 16 of the Petition contain conclusions of law to which no responsive pleading is required. 17. Admitted In part and denied In part. The averments set fcrth In Paragraph 17 of the Potltlon consist of conclusions of law, as to which no response Is required, such averments being denlod by operation of the Pennsylvania Rules of Civil Procedure. To the extent a response Is required, such averments are admitted In part and denied In part. It Is denied that the Board has unfairly discriminated against the Petitioner. It Is denied that the subject property Is similar to Bethany Village Retirement Center, The Church of God Home, The Episcopal Towers, Green Ridge Village or Forest Park Nursing Home, It Is admitted that If and to the extent Petitioner can establish that the subject property Is operated as a purely public charity, that such property may be afforded tax-exempt status. However, after reasonable Investigation, the County Is without knowledge or Information sufficient to form a belief as to the averment that Petitioner's Property Is operated as a purely public Charity and, therefore denies the same. WHEREFORE, Respondents, Cumberland County Board of Assessment Appeals and County of Cumberland, respectively request Your Honorable Court to deny Petitioner's appeal and to affirm the decision of October 24, 1994, of the Board of Assessment and Revision of Taxes. Respectfully submitted, Dated: h ?, 1'l'1r ~ /- I~<V D_ ?"-7 Steph 0, Tiley, Esquire Assistant Cumberland County Solicitor Attomey for Board of Assessment Appeals 5 South Hanover Street Carlisle, PA 17013 (717) 243.5838 Supreme Court I,D, No.: 32318 PRAECIPE fOR LISTING CASE FOR TRIAL (Must be typewritten and submitted in duplicate) . - " " '-', 'ro 'mE PR.JIH:lKYl'ARY OF CLt1BERLAtIl COUNl'Y '" '" ..,. N Please list the following case. (Check one) for JURY trial at the next , ,~." -\'1 term of civil cOUrt?" .~ ~~ t.D c.n K for trial without a jw:y. ----------------------------------------- CAPl'ION OF CASE (entire caption llUst be stated in full) (check one) Civil Action - Law Appeal from Arbitration GREAT COMMISSION CARE COMMUNITIES, INC., (-P:l.ii!,/tHH+ Petitioner vs. (Kl Appeal fr.om Cumberland (other) County Board of Assessment and Revision of Taxes Decision CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAKES, LOWER ALLEN TOWNSHIP, and WEST SHORE SCHOOL DISTRICT, ti)efend8ntt vs. Respondents The trial list will be called on 8/15/95 and Trials commence on 9/18/95 Pretrials will be held on 8/23/95 (Briefs are due 5 days before pretrials.) (The party listing this case for trial shall provide forthwith a copy of the praecipe to all counsel, pursuant to local Rule 214.1.) No. 94-6700 Civil 19 Indicate the attorney who will try case for the party who files this praecipe. Jack M. Hartman, Esqui~~ Indicate trial coWlsel for other parties if known. Stephen D. Tiley, Esquire, Counsel for Board of Assessment Appeals: Robert E. Yetter, Esquire, Counsel for Lower Allen Township: Matthew M. Hoffman, Esquire, Counsel for West Shore School Di~tri~t This case is ready for trial. Sigood7"nVt~ Print . Jack M. Hartman Date. CYt-V( h---' JCl.cJS-- I Attorney fora Petitioner, Great Commission Care Communities, Inc. .' . GREAT COMMISSION CARE COMMUNITIES, INC., Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, I'ENNSYL VANIA v. CUMBERLAND COUNTY BOARD OF ASSESSMENT APPEALS, CUMBERLAND COUNTY, LOWER ALLEN TOWNSHIP AND WEST SHORE SCHOOL DISTRICT, Respondcnts NO, 94-6700 CIVIL TERM ASSESSMENT APPEAL PRAECIPE FOR ENTRY OF APPEARANCE TO: PROTHONOTARY Please enter my appearance on behalf of Petitioner, Great Commission Care Communities, Inc., in the above-captioned action. JACK M. HARTMAN, ATTORNEY AT LAW By: C1.L~-L a-;;:;;r:f:;;~uire Suprcme Ct. J.D. #21902 One Keystone Plaza, Suite 107 Front and Market Streets P. O. Box 786 Harrisburg, P A 17108-0786 (717).232-3046 DATED: August 14, 1995 Attorney for Petitioner, Great Commission Care Communities, Inc. CERTIFICATE OF SERVICE I, Jack M, Hartman, Esquire, hereby ccrtify that I am this day serving a copy of the foregoing document upon thc person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United Statcs mail, first-class postage prepaid, as follows: Matthew M. Hoffman, Esquire Steele & Hoffman 422 Frick Building Pittsburgh, PA 15219 Counsel for West Shore School District Stephen D. Tiley, Esquire Assistant CumberlWld County Solicitor 5 South Hanover Street Carlisle, PA 17013 Counsel for Board of Assessment Appeals " '.' Robert E. Yetter, Esquire Metzger, Wickersham, Knauss & Erb Mellon Bank Building III Market Street P. O. Box 93 Harrisburg, PA 17108-0093 Counsel for Lower Allen Township JACK M. HARTMAN, A TTORNEY AT LAW . Hartman, Esquire me CI.!.D. #21902 One Keystone Plaza, Suite 107 Front WId Market Strcets P. O. Box 786 Harrisburg, PA 17108-0786 (717) 232-3046 DATED: August 14, 1995 Attorney for Petitioner, Great Comrnission Care Communities, Inc. IOI-2"~-19':.:. O.~:~,~'. .1>,:1 H"iF'T1I,d I ,'if r. ~, U:d,j P.02 02 "!. HARTMAN & MILLER, P.c.. AnORNEY" AT LAW O~E KE'I'510Nl! rlAiA . SUITE 107 .-'FRl~r4i~A.~()-MARt-"El STREEn;---~-(-~:(i..I(~)::Tb6 . U^,UU~l'lrRG . PA . 17108.07(\6 TElEPHONE (717) 21~-:lU4f) . FAnat.nu (717) 13~a.b3H JAC~ M. HARTM"" bWID C. MlttER November 29, 1995 Tho: Honorable J. Wesley Olcr, Jr. Judge, 9th Judicial Districl One COllrthollse Squnre Corli~lc. PA 17013 Re; Great Commissillll Care Commllnilies, Inc. v, Cumberlam) County Ooard of Assessment nnd Revision of TllXCS, ctnl.. Cumberland Counly No. 94-6700 Dear Judge Oler; Tbis is to confirm fol' all cOllnsel a tolephollc convcrsation wilh your chambers on November 27, 1995 that selllement in principlc has been reached and trial is not needed ia the nbove.rderenccd case. Plense reel rrce to call me if yo II have any ljlle,tions. Thallk you for YOllr consideration orthis mailer. Sincerely. ~ JMH;sll eo: Timothy J. Finkclston. Esquire Robert E. Yetter, E,qllire Stephen D, Tiley, Esquire Tor,:,L P.O.2 (~' .~ ",..... ...... . ~ ~~ ~ - r'o I.: " ",( ( ; i,.t , ' ,. I. r " Iii {;~! , , IL II ,-: ,0, - ......... o .... I (l " <-, \ ~.1 (., J .j ~ f ~ en p., ~ti ~ Z o Il<ji:! 0 Il< ~~~fii~ e::: Z ~ ... 0 0>- ~ 41 C5~~iS~ ::e~ ::eE-o t:: E-o~ ~ 0 ~!il0""lt:: t;~~~~ ::eZ ::e ..: .~ as~ .... >- E-o 0 ~ OD ~ U :;:l E-o~ZO uS ~~ 41 00 Z ~Il< Z~~=~ .... .... I'! p.,O E-o..: O' D ""lU O!a ;: ~ ffi - '" Oz ""l""l fiiU . OO""len ~~ <h>~!: E-o..::S 5~ en as ~ UZ..:~ 011 ~ ~ ~ ~ ~""lZ Slm O<~O Zt.'l D~< cO ::e~ ZE-o~= 0< ~~5~O O~> ::g oE <ZOen E=:~ U~""l U~ ~~""lfii <0 ~~~oi ~::e>- 'f< ""lp., Den .... E-o::e ~ f:l cA'~ D E-ouZ "'''''l ~~ ~ ~~ asp.,ffi .~ ::e~>< ~ 0_ Df:l<'t:l Oil< ZCJ t.'lU U<E-o a GREAT COMMISSION CARE COMMUNITIES, INC., Petitioner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNT~ PENNSYLVANIA vs. CUMBERLAND COUNTY BOARD NO. 94.6700 CIVIL TERM OF ASSESSMENT AND REVISION OF TAXES, LOWER ALLEN TOWNSHIP, and WEST SHORE SCHOOl. DISTRICT, Respondents: CIVIL ACTION . LAW STIPULATION AND JOINT MOTION FOR AGREED ORDER AND NOW, this 1.J.'fJI day of 5y4.h, 1996, It Is hereby agreed and stipulated between Petitioner, Great Commission Care Communities, Inc" by Its attomeys, Hartman & Miller, P.C,; and Respondents, Cumberland County Board of Assessment and Revision of Taxes and County of Cumberland, by Its Assistant Solicitor, Stephen D, Tiley, Esquire; and Respondent, Lower Allen Township, by Its attomeys, Metzger, WIckersham, Knauss & Erb; and Respondent, West Shore School District, by Its attorneys, Steele & Hoffman, as follows: 1, Petitioner, by prior legal counsel, flied a Petition appealing the October 24, 1994 decision of the Cumberland County Board of Assessment and Revision of Taxes denying Petitioner's request for exemption from taxes, Said Petition was flied to the above captioned term and number and a Rule was entered on December 1, 1994. A hearing was thereafter scheduled but by Order of Court dated November 29, 1995 the said hearing was canceled, 2, The parties have now sell led this case, The parties have agreed that a portion of the Petitioner's property will be exempt for a defined period of time, The partial exemption herein stipulated to shall be applicable for part of the year 1994, SllpulaUon and Joint Motiun fur Agreed Order Page I of 6 , . beginning July 1, 1994 and continuing through December 31, 1994, and continuing thereafter for the calendar years 1995, 1996 and 1997. During this period, the continuation of the exemption prov:ded for herein Is conditioned upon the continued use of the exempt and common facilities for their present uses, and the continued operation and ownership of the property by a non-profit entity, 3, The property which Is the subject of this appeal Is the retirement center owned by the Petitioner known as "The Woods at Cedar Run" and consists of Independent living apartments, personal care units, an alzheimer's care center and related facilities such as the chapel and community room, card room and library, administrative offices, kitchen and dining facilities. "The Woods at Cedar Run" Is situate at 824 L1zburn Road, Camp HIli (Lower Allen Township), Cumberland County, Pennsylvania, The property has a total gross building area of 133,633 square feet and Is known as Cumberland County Tax Parcel Number 13-24.0803-001, 4, On and after January 1, 1998 the partial exemption herein stipulated to will not automatically cease but the Cumberland County Assessment Office may, without peltlon to the Board of Assessment Appeals or Court, choose to assess for taxes all or any part of the herein exempted portion of the property according to law and procedures then In effect. On and after January 1, 1998 any party may petition the Board of Assessment Appeals for an Increase or decrease In exemption, or for a change In valuation of the taxable portion of the property. Any change In assessment or exemption status on or after January 1, 1998 may result In an assessment for a partial or supplemental tax bill for as much as the second half of the 1997-98 school tax bill which Is on a fiscal year from July 1, 1997 through June 30, 1998. On and after January 1, 1998 this Stipulation and Joint Motion for Agreed Order shall be of no further force and effect and of no evidentiary value to either party In any future proceedings concerning the exemption of all or any part of the property. Slipulallon and Joinl Malian for Agreed Order rage 2 of6 5, For the period of time covered by this Stipulation, the parties stipulate and agree that the following portion of the property shall be deemed exempt for real estate tax purposes: a, The alzheimer's unit (Woodland Suites) together with Its separate dining facility and wellness room. the dock and laundry area, the housekeeping area, and the chapel and community room area, all on the first floor of the property, having a total exempt square foolage of 12,092 square feet. b. The entire second floor of the property containing the "Srookvlew Suites" which are personal care living units, having a total exempt square footage of 22,604 square feet, c, 19 low Income apartments and 13 handicapped equipped apartments situate In the Independent living portion of the property (floors three through six), each of which is stipulated to contain 528 square feet, for a total exempt area of 16,896 square feet. No portion of the hallways or other common facilities on the independent living unit floors shall be wholly or partially exempted, 6, The totally exempt area Is 51,592 square fe&t, or 38,61 % of the total building area, 7. The fitness room and barber/beauty shop and the main dining rooms, all situate on the first floor of the property, shall remain taxable and consist of 3,646 square feet. 8, Tho remaining portion of the first floor of the property not Identified as exempt In paragraph five (a) of this Stipulation or Identified as taxable In paragraph seven of this Stipulation, shall be designated common area and has a total area of 9,891 square feet. The said common area shall be partially exempt In the same Slipulation and Jolnl MOlion ror Agreed Order Pagc3 or 6 . . , , . percentage as tax exempt area of the building Is to the total gross building area, to wit: 39%, Therefore, 3,857 square feet (9,891 . 39%) shall be exempted from real estate assessment. 9. The totally exempt area and partially exempt area, together, Is, therefore, 55,449 square feet, or 41,49% of the total gross building area, which, for purposes of this stipulation, shall be rounded to 42% of the total gross building area. 10. The exemption for real estate tax assessment purposes shall be arrived at by multiplying the total assessment for the Improvements to the property by 42%. 11, During the effective period of this Stipulation the exempt area of the existing Improvements shall be fixed at 42% of the existing area of the building, or 56,126 square feet regardless of any Interpretation, or lack of clarity, In connection with the description contained In this Stipulation of the exempt, partially exempt, and taxable areas, 12, During the effective period of this Stipulation the assessed valuation of the property, and Its parts, shall not be changed, nor appealed by any party hereto, 13, During the effective period of this Stipulation any new construction, reconstruction, or remodeling of the first floor shall be deemed to be exempt, partially exempt common area, or taxable, depending on Its usage, and In the same manner as the portions of the first floor have been so described and allocated In this Stipulation, Any new handicapped living units or low Income units which may be constructed, remodeled, or so designated, or otherwise created by the taxpayer shall nevertheless continue to be taxable and shall not be deemed to be exempt pursuant to this Stipulation, for the affective period of this Stipulation. 14, The Cumberland County Assessment Office shall promptly notify the appropriate taxing bodies of the change In assessment, effective retroactively to July 1, 1994, and Instruct the taxing bodies to rnake any appropriate refunds If taxes have Slipul.lion and Jolnl Motion for Agreed Order rage 4 of6 , been paid. 15, For any real estate taxes not paid as of the date of this Stipulation, the amount of penalty and Interest attributable to the now exempt portion of the taxes shall be waived so that penally and Interest Is only paid on the taxes that would have been billed If this Stipulation had been In force and effect, and Implemented, on July 1, 1994, 16. Each party to this appeal shall bear Its own costs. 17, The Court Is requested to enter the proposed Order attached hereto, 18. The undersigned Attomeys each hereby warrants to the other and to the parties and to the Court that he has reviewed this Settlement Stipulation with his client or clients and that he has specifically been authorized to enter Into this Settlement Stipulation by his client or clients, Respectfully Submitted, Date: o//~ /ttt PETITIONER, GREAT COMMISSION CARE COMMUNITIES, INC. BY:~~ Ha an & Miller, P.C, Ja M. Hartman, Esquire Attomey for Petitioner RESPONDENT, CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES and COUNTY OF CUMBERLAND Date: 9jt?!?6 By: Stt~ {~i1e~~E's~'~;: Assistant County Solicitor Attorney for Respondent Slipulalion and Join! Mallon for Agreed Order Puge 5 of 6 , . RESPONDENT, LOWER ALLEN TOWNSHIP Date: Cf II ~ I 't y By: RESPONDENT, WEST SHORE SCHOOL DISTRICT Date: qll?/q~ By: ~~9.Z:~l&- Steele & Hoffman Timothy J. Flnkelston, Esquire Attorney for Respondent Sllpulal!on and Join! Mollon for Agreed Order Page 6 of 6