HomeMy WebLinkAbout03-4921, 04-920,921,922,949,950SHENANDOAH MOBILE
COMPANY, and
SHENANDOAH PERSONAL
COMMUNICATIONS
COMPANY,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Vo
CIVIL ACTIONILAW
CUMBERLAND COUNTY
BOARD OF ASSESSMENT
APPEALS,
Defendant
NO. 03-4921 CIVIL TERM
SPECTRASITE
COMMUNICATIONS,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Vo
CUMBERLAND COUNTY
BOARD OF ASSESSMENT
APPEALS,
Defendant
Vo
CIVIL ACTION--LAW
CUMBERLAND COUNTY,
SOUTH MIDDLETON
TOWNSHIP, and SOUTH
MIDDLETON SCHOOL
DISTRICT,
Interested Parties
NO. 04-920 CIVIL TERM
SPECTRASITE
COMMUNICATIONS,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Vo
CUMBERLAND COUNTY
BOARD OF ASSESSMENT
APPEALS,
Defendant
Vo
CIVIL ACTIONILAW
CUMBERLAND COUNTY,
UPPER FRANKFORD
TOWNSHIP, and BIG SPRING
SCHOOL DISTRICT,
Interested Parties
NO. 04-921 CIVIL TERM
SPECTRASITE
COMMUNICATIONS,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Vo
CUMBERLAND COUNTY
BOARD OF ASSESSMENT
APPEALS,
Defendant
Vo
CIVIL ACTIONILAW
CUMBERLAND COUNTY,
SOUTHAMPDEN TOWNSHIP,
and SHIPPENSBURG AREA
SCHOOL DISTRICT,
Interested Parties
NO. 04-922 CIVIL TERM
SBA TOWERS, INC.,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Vo
CUMBERLAND COUNTY
2
BOARD OF ASSESSMENT
APPEALS,
Defendant
CIVIL ACTIONILAW
CUMBERLAND COUNTY,
SOUTH NEWTON TOWNSHIP,:
and BIG SPRING SCHOOL
DISTRICT,
Interested Parties
NO. 04-949 CIVIL TERM
SBA TOWERS, INC.,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CUMBERLAND COUNTY
BOARD OF ASSESSMENT
APPEALS,
Defendant
CIVIL ACTION--LAW
CUMBERLAND COUNTY,
EAST PENNSBORO
TOWNSHIP, and EAST
PENNSBORO SCHOOL
DISTRICT,
Interested Parties
NO. 04-950 CIVIL TERM
IN RE: TAX ASSESSMENT APPEALS
BEFORE OLER, J.
OPINION and ORDER OF COURT
OLER, J., September 15, 2004.
In these six cases, which have been consolidated by agreement of counsel because
of a common question of law, Plaintiffs are appealing from real estate tax assessments by
3
Defendant of Plaintiffs' telecommunication tower facilities.~ At issue on the appeals is
the correctness of Defendant's underlying classification of Plaintiffs' telecommunication
towers as realty as opposed to personalty for real estate tax purposes.
The procedural history of the cases may be summarized as follows. On September
18, 2003, Plaintiffs Shenandoah Mobile Company and Shenandoah Personal
Communications Company filed a petition for appeal from Defendant's tax assessment of
their telecommunication towers.3 Defendant filed an answer to Plaintiffs' petition on
October 2, 2003,4 and the case was listed for trial on January 7, 2004.5 On March 4,
2004, Plaintiff Spectrasite Communications filed three petitions for appeal, each listing
the Cumberland County Board of Assessment Appeals as Defendant, as well as
Cumberland County and the local townships and school districts in which the towers
were located as interested parties.6 On March 5, 2004, Plaintiff SBA Towers filed two
petitions for appeal, each listing the Cumberland County Board of Assessment Appeals
~ The following cases have been consolidated at Number 03-4921 Civil Term: Numbers 03-4921 Civil
Term, 04-920 Civil Term, 04-921 Civil Term, 04-922 Civil Term, 04-949 Civil Term, and 04-950 Civil
Term. See Order of Ct., Apr. 16, 2004.
: See Pet. of Appeal from Determination of Real Estate Tax Assessment, filed Sept. 18, 2003 (hereinafter
Shenandoah's Pet. of Appeal); Pet. for Appeal, filed Mar. 4, 2004 (hereinafter Spectrasite/South
Middleton Township Pet. for Appeal); Pet. for Appeal, filed Mar. 4, 2004 (hereinafter Spectrasite/Upper
Frankford Township Pet. for Appeal); Pet. for Appeal, filed Mar. 4, 2004 (hereinafter
Spectrasite/Southampden Township Pet. for Appeal); Pet. for Appeal, filed Mar. 5, 2004 (hereinafter SBA
Towers/South Newton Township Pet. for Appeal); Pet. for Appeal, filed Mar. 5, 2004 (hereinafter SBA
Towers/East Pennsboro Township Pet. for Appeal).
~ Shenandoah's Pet. of Appeal.
4 Answer, filed Oct. 2, 2003 (hereinafter Def.'s Answer to Shenandoah's Pet.).
5 Praecipe for Listing Case for Trial, filed Jan. 7, 2004.
6 S~'¢ Spectrasite/South Middleton Township Pet. for Appeal (listing Cumberland County, South
Middleton Township and South Middleton School District as interested parties); Spectrasite/Upper
Frankford Township Pet. for Appeal (listing Cumberland County, Upper Frankford Township, and Big
Spring School District as interested parties); Spectrasite/Southampden Township Pet. for Appeal (listing
Cumberland County, Southampden Township, and Shippensburg Area School District as interested
parties).
4
as Defendant, as well as Cumberland County and the local townships and school districts
in which the towers were located as interested parties.7
On April 13, 2004, Plaintiff Spectrasite Communications filed a motion to
consolidate the six cases pending against Defendant.8 On April 16, 2004, pursuant to an
agreement of counsel, the court ordered the cases consolidated, with filings to be made at
Number 03-4921 Civil Term.9
A pre-hearing conference was held on June 9, 2004,~° and a two-day hearing was
conducted on June 24, 2004, and June 28, 2004. ~
For the reasons stated in this opinion, Defendant's treatment of Plaintiffs'
telecommunication towers as realty for purposes of the county's tax on real property will
be sustained.
STATEMENT OF FACTS
Plaintiffs are Shenandoah Mobile Company, Shenandoah Personal
Communications Company, Spectrasite Communications, and SBA Towers, Inc.~2
Shenandoah, Spectrasite, and SBA Towers are all telecommunication tower companies
which own towers throughout Pennsylvania.~3 Spectrasite and SBA Towers are also part
of an industry group, along with Crown Communications and American Tower
Company, which is cooperating in the coordination of real estate tax assessment
appeals.TM Defendant is the Cumberland County Board of Assessment Appeals.~5 The
7 See SBA Towers/South Newton Township Pet. for Appeal (listing Cumberland County, South Newton
Township, and Big Spring School District as interested parties); SBA Towers/East Pennsboro Township
Pet. for Appeal (listing Cumberland County, East Pennsboro Township, and East Pennsboro School
District as interested parties).
8 Mot. to Consolidate, filed Apr. 13, 2004 (hereinafter Spectrasite's Mot. To Consolidate).
9 Order of Ct., Apr. 16, 2004.
l0 In Re: Pre-Hearing Conference, June 9, 2004.
~ Notes of Testimony 2, Hr'g., June 24, 2004, and June 28, 2004 (hereinafter N.T. ~.
l: N.T. 1-2.
~3 Stipulations of Fact ¶2, Pls.' Ex. 13, Hr'g., June 24, 2004, and June 28, 2004 (hereinafter Stipulations
of Fact ¶~.
14 Stipulations of Fact ¶3.
Interested Parties of record are Cumberland County, South Middleton Township, Upper
Frankford Township, Southampden Township, East Pennsboro Township, South Newton
Township, South Middleton School District, Big Spring School District, Shippensburg
Area School District, and East Pennsboro School District.~6
For the sake of clarity, the word "tower" will be used when referencing the actual
telecommunication towers, and the term "tower facility" will be used when referencing
the tower, fence, concrete foundation and equipment building on each site. With respect
to the types of towers, a monopole tower will be defined as a self-supporting, tubular
tower which ranges 50-200 feet in height,l? A lattice tower will be defined as a self-
supporting, three- or four-legged tower which is widest at the bottom and tapers as it
rises.~8 Lattice towers can reach heights of up to 1,000 feet.~9 Finally, it should be noted
that Plaintiffs' lease the underlying land on which their tower facilities are located.2° The
assessments at issue in these cases were made only on Plaintiffs' tower facilities;
assessments on the leased land were separately issued to the landowners.2~
These cases involve six telecommunication towers located in Cumberland County
(identified as Towers "A-F").22 Tower "A," parcel number 25-25-0006-351 LL, is
owned by Shenandoah Mobile Company.23 It is a 70-foot monopole tower located at 102
Market Street, New Cumberland Borough, Cumberland County, Pennsylvania.24 The
lease for Tower "A's" facility commenced on August 23, 1999, and is a five-year lease,
which will automatically be renewed, unless terminated by the tower company, through
~s N.T. 1-2.
16 N.T. 1-2.
~7 Stipulations of Fact ¶4.
~8 Stipulations of Fact ¶4.
19 Stipulations of Fact ¶4.
20 Stipulations of Fact ¶ 1 0.
2~ Stipulations of Fact ¶12.
22 Stipulations of Fact ¶¶5, 7.
23 Stipulations of Fact ¶7.
24 Stipulations of Fact ¶7.
6
four more five-year periods.25 The original assessment issued for the improvements at
Tower "A's" facility specified an assessed value of $202,860.00, which was modified by
the Board of Assessment Appeals to $95,000.00.26
Tower "B," parcel number 43-06-0031-012 LL, is owned by Spectrasite
Communications.27 It is a 150-foot lattice tower located at 200 Center Road, Upper
Frankford Township, Cumberland County, Pennsylvania.2a The lease for Tower "B's"
facility commenced on June 3, 1998, and is a four-year lease, which will automatically be
renewed, unless terminated by the tower company, through four more five-year periods.29
The original assessment issued for the improvements at Tower "B's" facility specified an
assessed value of $217,560.00, which was modified by the Board of Assessment Appeals
to $142,000.00.30
Tower "C,"
Communications.3~
parcel number 39-12-0324-004 LL, is owned by Spectrasite
It is a 180-foot lattice tower located at 44 Kline Road, Southampton
Township, Cumberland County, Pennsylvania.32 The lease for Tower "C's" facility
commenced on March 6, 1998, and is a five-year lease, which will automatically be
renewed, unless terminated by the tower company, through five more five-year periods.33
The original assessment issued for the improvements at Tower "C's" facility specified an
assessed value of $244,860.00, which was modified by the Board of Assessment Appeals
to $136,530.00.34
:s Stipulations of Fact ¶11.
26 Stipulations of Fact ¶ 13.
27 Stipulations of Fact ¶7.
28 Stipulations of Fact ¶7.
29 Stipulations of Fact ¶11.
s0 Stipulations of Fact ¶ 13.
s~ Stipulations of Fact ¶7.
s: Stipulations of Fact ¶7.
ss Stipulations of Fact ¶11.
34 Stipulations of Fact ¶13.
7
Tower "D," parcel number 40-10-0632-016 LL, is owned by Spectrasite
Communications.35 It is a 160-foot lattice tower located at 1500 Holly Pike, South
Middleton Township, Cumberland County, Pennsylvania.36 The lease for Tower "D's"
facility commenced on August 22, 1998, and is a five-year lease, which will
automatically be renewed, unless terminated by the tower company, through four more
five-year periods.37 The original assessment issued for the improvements at Tower "D's"
facility specified an assessed value of $221,060.00, which was modified by the Board of
Assessment Appeals to $136,530.00.38
Tower "E," parcel number 09-22-0533-001 LL, is owned by SBA Towers.39 It is a
120-foot monopole tower located at 4404 Industrial Park Road, East Pennsboro
Township, Cumberland County, Pennsylvania.4° The lease for Tower "E's" facility
commenced on January 1, 2001, and is a five-year lease, which will automatically be
renewed, unless terminated by the tower company, through four more five-year periods
and one period of four years and eleven months.4~ The original assessment issued for the
improvements at Tower "E's" facility specified an assessed value of $244,860.00, which
was modified by the Board of Assessment Appeals to $70,000.00.42
Tower "F," parcel number 41-11-0304-019 LL, is owned by SBA Towers.43 It is a
195-foot lattice tower located at 212 Hammond Road, South Newton Township,
Cumberland County, Pennsylvania.44 The lease for Tower "F's" facility commenced on
November 21, 1997, and is a five-year lease, which will automatically be renewed, unless
3s Stipulations of Fact ¶7.
36 Stipulations of Fact ¶7.
37 Stipulations of Fact ¶1 1.
38 Stipulations of Fact ¶ 1 3.
39 Stipulations of Fact ¶7.
40 Stipulations of Fact ¶7.
41 Stipulations of Fact ¶1 1.
42 Stipulations of Fact ¶ 1 3.
43 Stipulations of Fact ¶7.
44 Stipulations of Fact ¶7.
terminated by the tower company, through four more five-year periods and one period of
four years and eleven months.4s The original assessment issued for the improvements at
Tower "F's" facility specified an assessed value of $244,860.00, which was modified by
the Board of Assessment Appeals to $100,000.00.46
Cumberland County is a fourth class county.47 The predetermined assessment
ratio for real estate in Cumberland County is 100 percent.48 The above assessment values
which were determined by the Cumberland County Board of Assessment Appeals
represent the fair market value of each of the tower facilities.49 The common level ratio,
which is set at 95.4 percent for Cumberland County, is not implicated as a factor in these
cases because it does not vary by more than 15 percent from the predetermined ratio,so
Much of the testimony at the hearing focused on the question of whether
Plaintiffs' towers were, or were at least intended to be, permanent fixtures at the tower
facilities. This testimony included explanations about the erection and disassembly of
telecommunication towers, reasons for removing or replacing towers, and general trends
in the tower industry pertaining to the erection and removal of towers.
The process of erecting a tower begins with the submission of bids.s~ The bid
forms are broken down by the tasks which need to be performed,s2 These tasks include,
but are not limited to, foundation work, tower erection, electrical work, fencing, and
landscaping,s3 After bids have been submitted and jobs awarded, preparation of the
tower facility site begins, including erecting a fence, clearing the trees and vegetation,
4s Stipulations of Fact ¶11.
46 Stipulations of Fact ¶ 13.
47 See Act of Aug. 9, 1955, P.L. 323, §210, as amended 16 P.S. §210.
48 Stipulations of Fact ¶ 15.
49 Stipulations of Fact ¶ 15.
50 Stipulations of Fact ¶ 15.
5~ N.T. 146.
52 See Pis.' Ex. 3, Hr'g., June 24, 2004 and June 28, 2004 (hereinafter Pis.'/Def.'s Ex.
Pis.' Ex. 6.
53 N.T. 145-48; Pis.' Ex. 3; Pis.' Ex. 5; Pis.' Ex. 6.
Pis.' Ex. 5;
9
grading, stoning, and matting,s4 Sometimes it is also necessary to have an access road
constructed from the highway or roadway to the tower facility site.ss
The first step in the actual erection of either a monopole or a lattice tower is the
laying of the concrete mat and pier foundation,s6 Leonard Greisz, a Director of Internal
Controls Compliance with Shenandoah, and Patrick Doyle, an employee of Crown
Castle, testified as to this procedure,s7 Their testimony was corroborated by Patrick
O'Reilly, a Director of Field Operations for Spectrasite, and Andrew Getsy, a Field
Operations Manager for SBA.sa First, engineers conduct a geotechnical analysis to
determine whether they will be drilling in soft dirt, hard dirt, or bedrock.59 The softer or
looser the ground is, the deeper the concrete foundation must be.® After the needed
depth of the foundation is determined, the ground is drilled, and rebar cages are placed in
the ground.6~ Bolts are then placed inside the rebar cages, and the cement is poured.62
Additionally, Mr. O'Reilly testified that instead of a mat and pier foundation, lattice
towers may have a straight caisson under each leg of the tower.63 A straight caisson is
simply an individual concrete foundation under each leg of the tower which is about eight
feet in diameter, and anywhere from twenty to thirty feet deep.64 Otherwise, a straight
caisson is created in the same manner as the mat and pier foundation.6s
54 N.T. 146-47.
55 N.T. 147.
56 N.T. 140.
57 N.T. 27-28, 99.
58 N.T. 204-05, 221.
59 N.T. 48.
60 N.T. 48.
61 N.T. 140.
62 N.T. 140.
63 N.T. 213.
64 N.T. 213.
65 See N.T. 213.
10
Mr. Greisz and Mr. Doyle next testified about the erection of towers. While the
cement is curing, the next stage of erecting the tower proceeds.66 Usually workers will
begin constructing the individual sections of the tower during this time.67 After the
cement has cured, a crane lifts the first section of the tower over the bolts and onto the
mat and pier foundation.6a A lock washer is then placed over the bolts, and, finally, a
large nut is used to securely fasten the tower to its foundation.69 After the first segment
of the tower has been securely fastened to its foundation, the remaining segments of the
tower are moved into place by crane and attached to the previous segments of the tower
until the entire tower has been erected.7° After the tower has been erected, lights will be
attached to it and electricity will be run to it, making the tower ready to host antennas.TM
During the hearing, Mr. Doyle also gave extensive testimony on the disassembly
process for telecommunication towers as he narrated a videotape showing the
disassembly of a tower in West Virginia.TM The West Virginia tower was a 180-foot
lattice tower which was composed of nine sections and over 100 parts.73 Before any
disassembly could begin, the lights were taken off the tower, and the tower facility site
was de-energized.TM Additionally, any antennas or co-axle cables which would have been
attached to the tower would also have had to have been taken down or disconnected
before disassembly could begin.75
66 N.T. 140-41.
67 N.T. 140.
68 N.T. 42, 141.
69 N.T. 42, 141-42.
70 See N.T. 42-43, 114; see also Def.'s Ex. 1.
ex See N.T. 147, 156-57.
7: N.T. 110, 114; Pls.' Ex. 35.
73 N.T. 114-15.
74 N.T. 156-57.
75 See N.T. 157-58.
11
Once these preliminary matters had been addressed, riggers ascended the tower
and securely attached the strapping from the crane to the top section of the tower.76 The
riggers then began unfastening the bolts which held the top section of the tower in place,
and, once the section was loose, the crane lowered the section to the ground.?? The
riggers then moved down to the next section of the tower, attached the crane's strapping,
unfastened the bolts, and lowered the section to the ground.78 The tower sections were
not disassembled before they were taken away from the site unless they were too large to
transport.79 Once the sections became too large to transport, the sections were
disassembled and the parts were categorized before being taken away.8° Eventually, the
riggers unbolted the final section of the tower, which was the section attached to the
concrete foundation.8~ After the last section had been unbolted from the foundation and
disassembled, the riggers cleaned up the site, the last of the tower pieces were taken
away, and the tower disassembly was complete.82
The entire disassembly process for the West Virginia tower lasted about twelve
hours.83 Mr. Doyle testified that the time period which was required to disassemble the
West Virginia tower was longer than the time normally needed to disassemble a lattice
tower because the access to the site was poor, and there was little room at the site for the
cranes and trucks to move around.84 Additionally, Mr. Doyle testified that disassembling
a monopole tower would be a much simpler process than disassembling a lattice tower.85
After the antennas and power cables have been removed, disassembling a monopole
76 N.T. 116-17.
77 N.T. 117-18.
78 N.T. 118-19.
79 N.T. 119.
8° N.T. 119.
8~ N.T. 131.
82 N.T. 131-35.
83 See N.T. 126, 135.
84 N.T. 126-27.
85 N.T. 150-51, 170-71.
12
tower requires loosening the foundation bolts, using a crane to pick the tower up and lay
it on its side, and disassembling the tower segments once the tower has been laid on the
ground. 86
Once a tower has been disassembled, only the cement foundation, equipment
building, and fence are left at the site.a7 These parts of the facility are not damaged
during disassembly, and could be used if another tower were later erected at the site.aa In
fact, the fencing and cement foundation are removed from the site only if their removal is
a specified condition in the lease,a9
The towers themselves are also reusable after disassembly.® The only parts of the
towers which must be replaced after disassembly are the bolts which hold the pieces and
sections of the tower together.9~ Additionally, any pieces of the tower which are
damaged during disassembly also must be replaced before the tower can be
reassembled.92 Otherwise, the towers can either be transported to a new site and erected,
or put in a storage facility until they are needed for another site.93
During the hearing, the witnesses testified to a number of reasons that towers
might be disassembled and moved to another location. The major reason cited for tower
removal was a change in business circumstances.94 For example, if there were a
population shift and a tower were no longer needed in one area, but instead needed in a
more densely populated area, then the tower would be moved into the more densely
86N.T. 150-51, 170-71.
87 N.T. 55.
88 See N.T. 55, 144-45,207. The lack of any damage to parts of the tower facility during disassembly is
evidenced by the tower industry's occasional "drop and swap" practice, in which one tower is taken down
at a site, only to be replaced at the site by another--usually taller--tower. N.T. 144-45.
89 N.T. 55.
90 N.T. 139.
91 N.T. 138.
92 N.T. 120, 156.
93 N.T. 120, 139.
94 N.T. 60-62, 196.
13
populated area.95 Additionally, there might be times when a tower would no longer be a
sufficient height; therefore, the original tower would be disassembled and a taller tower
would be erected in its place.96 This procedure is referred to in the industry as a "drop
and swap.''97 Finally, sometimes a company will build a spec site, which is a tower
facility that is built in anticipation that companies will eventually want to attach antennas
to it.98 If the tower were to become financially unviable because companies did not
attach antennas to it, or if zoning requirements mandated that the tower be taken down
because of non-use, then the tower would have to be taken down.99
Notwithstanding the availability of technology to disassemble a tower, the process
is highly laborious, expensive, and demanding in terms of expertise, courage, and
equipment. Furthermore, notwithstanding the theoretical reasons recounted above for
taking down or moving towers, the practice in the telecommunication tower industry is
that these towers are not being taken down or moved on a frequent basis.~°°
Mr. Greisz testified that, during the almost ten years in which he has worked for
Shenandoah, he could not remember a tower that was built where the lease was
terminated and the tower was taken down.~°~ Mr. Doyle testified that, of the well over
400 towers which his company owns in Pennsylvania, his company is considering
moving or taking down only 30 of the sites.~°2 Mr. O'Reilly testified that, of the 2,200
towers which Spectrasite owns in the northeastern United States, only ten have been or
are in the process of being moved or swapped, none of which is located in
95 N.T. 64.
96 N.T. 144.
97 N.T. 144-45.
98 N.T. 159.
99 N.T. 196-97.
~oo See N.T. 27-28, 74, 103, 109-10, 215, 226.
~o~ N.T. 27-28, 74.
lo: N.T. 103, 109-10.
14
Pennsylvania.~°3 Mr. Getsy testified that, of the over 400 towers which SBA Towers
owns in Pennsylvania, he was not aware of any being removed. ~04
Finally, Plaintiffs called Brian Kostel, a senior tax accountant for Crown Castle)®
Mr. Kostel testified that, according to an advisory letter issued by the Pennsylvania
Department of Revenue, telecommunication towers which are bolted to their foundations,
instead of being sunk into their foundations, are considered personal property, thus
subjecting the rental space on the towers to sales tax.~°6
DISCUSSION
Statement of Law
Assessability of Real Estate. Section 201 of the Fourth to Eighth Class County
Assessment Law provides for the assessment of all real estate in the county:
The following subjects and property shall as hereinafter provided be valued
and assessed and subject to taxation for all county, borough, town,
township, school, (except in cities), poor and county institution district
purposes, at the annual rate,
(a) All real estate to wit: Houses, house trailers and mobile homes
permanently attached to land or connected with water, gas, electric or
sewage facilities, buildings, lands, lots of ground and ground rents, trailer
parks and parking lots, mills and manufactories of all kinds, all office type
construction of whatever kind, that portion of a steel, lead, aluminum or
like melting and continuous casting structures which enclose, provide
shelter or protection from the elements for the various machinery, tools,
appliances, equipment, materials or products involved in the mill, mine
manufactory or industrial process, and all other real estate not exempt by
law from taxation ....
Act of May 21, 1943, P.L. 571, §201, as amended, 72 P.S. §5453.201.
Assessment of Chattels' as Real Property for Real Estate Taxation. As a general
proposition in real property law, there are three classifications for chattels that are used in
connection with real estate:
103 N.T. 215.
104 N.T. 226.
105 N.T. 230.
106 N.T. 234-35; Pls.' Ex. 9.
15
First, those which are manifestly furniture, as distinguished from
improvements, and not peculiarly fitted to the property with which they are
used; these always remain personalty. Second, those which are so annexed
to the property that they cannot be removed without material injury to the
real estate or to themselves; these are realty, even in the face of an
expressed intention that they should be considered personalty .... Third,
those which, although physically connected with the real estate, are so
affixed as to be remov[able] without destroying or materially injuring the
chattels themselves, or the property to which they are annexed; these
become part of the realty or remain personalty, depending upon the
intention of the parties at the time of the annexation; in this class fall such
chattels as boilers and machinery affixed for the use of an owner or tenant
but readily removable.
Clayton v. Lienhard, 312 Pa. 433,436-37, 167 A. 321,322 (1933) (citations omitted).
The court in In Re Sheetz, Inc., 657 A.2d 1011 (Pa. Commw. Ct. 1995), elaborated
on the third classification of chattels, setting out a test for determining whether a chattel
has become a fixture of real property for purposes of real estate taxation. Id at 1013.
The considerations which must be taken into account when making this determination are
"(1) the manner in which [the chattel] is physically attached or installed, (2) the extent to
which it is essential to the permanent use of the building or other improvement, and (3)
the intention of the parties who attached or installed it." Id The intention of the parties
is the most important consideration to examine, with the first two considerations acting as
"objective manifestations that aid in determining the intention of the parties." Id at
1014. Furthermore, permanence is not to be equated with perpetuity, but rather with the
intention to "'remain where affixed until worn out, until the purpose to which the realty is
devoted is accomplished or until the item is superseded by another item more suitable for
the purpose.'" Id (quoting Mich. Nat'l Bank v. City of Lansing, 293 N.W.2d 626, 627
(mich. Ct. App. 1980)).
In Sheetz, the Commonwealth Court held that canopies which cover gas pumps at
gas stations are fixtures of real property, and hence are taxable as such similar facilities.
Id The Court held that the canopies were affixed to a poured concrete foundation by
bolts, which were then covered by concrete. Id Next, the court held that the canopies
were essential to the permanent use of the gas pumps because stations with canopies had
16
a higher sales volume. Id Additionally, the canopies essential nature was demonstrated
through Sheetz's seeking variances of zoning requirements in a number of cases to allow
for the erection of canopies at their stations. Id These facts led the court to conclude
that Sheetz intended the canopies to be a permanent fixture of its gas stations which
would remain until they were worn out, or Sheetz no longer occupied the premises. Id
Finally, the Court of Common Pleas of Dauphin County, Bratton, J., has in a
recent decision addressed the specific issue of real estate taxation of telecommunication
towers. In holding that the tower was real property for purposes of real estate taxation,
Judge Bratton noted that although the tower itself could be removed without injury to the
tower, the concrete foundation to which the tower was attached could not be removed
without causing injury to the real estate. See, e.g., Shenandoah Mobile Co. v. Dauphin
County Bd of Assessment Appeals', docketed at 2003 CV 3196 TX, Dauphin County,
2004.
Application of Law to Facts
In the court's view, Plaintiffs' telecommunication towers are properly classified as
realty for purposes of Pennsylvania's real property taxation scheme. An analysis of the
considerations set forth in Sheetz leads to this conclusion.
First, the towers are firmly affixed to the ground, and, although their removal is
not a practical impossibility, the process involves a high degree of expense, manpower,
equipment, and skill. Second, the towers are essential to the use of the rest of the facility,
which is clearly real estate.
Third, and perhaps most important, the intent of the parties that the towers be
features of the real estate as opposed to transient items of personalty is manifest in the
extended terms of the leases and the practice of the industry, whereby dismantling of
towers is almost exclusively a theoretical matter.
ORDER OF COURT
AND NOW, this 15th day of September, 2004, after careful consideration of the
tax assessment appeals filed herein, following a hearing, and for the reasons stated in the
accompanying opinion, it is ordered as follows:
17
With respect to parcel number 25-25-0006-351 LL:
THE MARKET VALUE as of January 1, 2004 (and for succeeding years until
revised), for the parcel owned by Shenandoah Mobile Company, situated in New
Cumberland Borough, Cumberland County, Pennsylvania, is fixed at $95,000.00.
THE PERTINENT COMMON LEVEL RATIO for Cumberland County has been
stipulated to be 95.4 percent. The predetermined ratio is 100 percent.
THERE BEING A DIFFERENCE of less than 15 percent between the common
level ratio and predetermined ratio, as a result of which assessments are to be determined
by application of the predetermined ratio, the assessment with respect to the aforesaid
parcel is fixed at $95,000.00 as of January 1, 2004, for county and municipal taxes, and
July 1, 2004, for school real estate taxes.
With respect to parcel number 43-06-0031-012 LL:
THE MARKET VALUE as of January 1, 2004 (and for succeeding years until
revised), for the parcel owned by Spectrasite Communications, situated in Upper
Frankford Township, Cumberland County, Pennsylvania, is fixed at $142,000.00.
THE PERTINENT COMMON LEVEL RATIO for Cumberland County has been
stipulated to be 95.4 percent. The predetermined ratio is 100 percent.
THERE BEING A DIFFERENCE of less than 15 percent between the common
level ratio and predetermined ratio, as a result of which assessments are to be determined
by application of the predetermined ratio, the assessment with respect to the aforesaid
parcel is fixed at $142,000.00 as of January 1, 2004, for county and municipal taxes, and
July 1, 2004, for school real estate taxes.
With respect to parcel number 39-12-0324-004 LL:
THE MARKET VALUE as of January 1, 2004 (and for succeeding years until
revised), for the parcel owned by Spectrasite Communications, situated in Southampton
Township, Cumberland County, Pennsylvania, is fixed at $136,530.00.
THE PERTINENT COMMON LEVEL RATIO for Cumberland County has been
stipulated to be 95.4 percent. The predetermined ratio is 100 percent.
18
THERE BEING A DIFFERENCE of less than 15 percent between the common
level ratio and predetermined ratio, as a result of which assessments are to be determined
by application of the predetermined ratio, the assessment with respect to the aforesaid
parcel is fixed at $136,530.00 as of January 1, 2004, for county and municipal taxes, and
July 1, 2004, for school real estate taxes.
With respect to parcel number 40-10-0632-016 LL:
THE MARKET VALUE as of January 1, 2004 (and for succeeding years until
revised), for the parcel owned by Spectrasite Communications, situated in South
Middleton Township, Cumberland County, Pennsylvania, is fixed at $136,530.00.
THE PERTINENT COMMON LEVEL RATIO for Cumberland County has been
stipulated to be 95.4 percent. The predetermined ratio is 100 percent.
THERE BEING A DIFFERENCE of less than 15 percent between the common
level ratio and predetermined ratio, as a result of which assessments are to be determined
by application of the predetermined ratio, the assessment with respect to the aforesaid
parcel is fixed at $136,530.00 as of January 1, 2004, for county and municipal taxes, and
July 1, 2004, for school real estate taxes.
With respect to parcel number 09-22-0533-001 LL:
THE MARKET VALUE as of January 1, 2004 (and for succeeding years until
revised), for the parcel owned by SBA Towers, INc., situated in East Pennsboro
Township, Cumberland County, Pennsylvania, is fixed at $70,000.00.
THE PERTINENT COMMON LEVEL RATIO for Cumberland County has been
stipulated to be 95.4 percent. The predetermined ratio is 100 percent.
THERE BEING A DIFFERENCE of less than 15 percent between the common
level ratio and predetermined ratio, as a result of which assessments are to be determined
by application of the predetermined ratio, the assessment with respect to the aforesaid
parcel is fixed at $70,000.00 as of January 1, 2004, for county and municipal taxes, and
July 1, 2004, for school real estate taxes.
With respect to parcel number 41-11-0304-019 LL:
19
THE MARKET VALUE as of January 1, 2004 (and for succeeding years until
revised), for the parcel owned by SBA Towers, Inc., situated in South Newton Township,
Cumberland County, Pennsylvania, is fixed at $100,000.00.
THE PERTINENT COMMON LEVEL RATIO for Cumberland County has been
stipulated to be 95.4 percent. The predetermined ratio is 100 percent.
THERE BEING A DIFFERENCE of less than 15 percent between the common
level ratio and predetermined ratio, as a result of which assessments are to be determined
by application of the predetermined ratio, the assessment with respect to the aforesaid
parcel is fixed at $100,000.00 as of January 1, 2004, for county and municipal taxes, and
July 1, 2004, for school real estate taxes.
BY THE COURT,
s/ J. Wesley Oler, Jr.
J. Wesley Oler, Jr., J.
Carl C. Risch, Esq.
10 East High Street
Carlisle, PA 17013
Attorney for Shenandoah Mobile Company
and Shenandoah Personal Communications Company
Dusty Elias Kirk, Esq.
Sharon F. DiPaolo, Esq.
Pepper Hamilton, LLP
One Mellon Center, 50th Floor
500 Grant Street
Pittsburgh, PA 15219
Attorneys for Spectrasite Communications
and SBA Towers, Inc.
Mark A. Mateya, Esq.
407 North Front Street
Box 11848
Harrisburg, PA 17108
Attorney for County Commissioners
Association of Pennsylvania
20
Stephen D. Tiley, Esq.
5 South Hanover Street
Carlisle, PA 17013
Attorney for Cumberland County
Board of Assessment Appeals
Philip H. Spare, Esq.
44 West Main Street
P.O. Box 318
Mechanicsburg, PA 17055
Attorney for Big Spring and
South Middleton School Districts
21