Opinion
No. 1856 C.D. 2017
12-06-2018
Archbishop of Philadelphia c/o Saint Joseph's Parish, Appellant v. Chester County Board of Assessment Appeals and Downingtown Area School District and Borough of Downingtown
BEFORE: HONORABLE ROBERT SIMPSON, Judge HONORABLE ELLEN CEISLER, Judge HONORABLE DAN PELLEGRINI, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE PELLEGRINI
Before us is the appeal of the Archbishop of Philadelphia/Saint Joseph's Parish (Parish) from the decision of the Court of Common Pleas of Chester County (trial court) refusing to find Holy Family Center (Center) fully exempt from real property taxes as a place of religious worship or necessary for religious worship. For the following reasons, we affirm the trial court's decision.
The Parish is located in Downingtown, Chester County (County), Pennsylvania. The Parish is very large both in terms of parishioners, with 4,800 families which translates into approximately 14,000 parishioners, as well as the size of the property and its physical plant, which consists of approximately 39 acres on which a church, school, convent, rectory and administration building have been built (Property). Those buildings are tax exempt and are not at issue in this appeal.
In 2016, the Parish constructed the Center. It has 5,442 square feet and houses the pastor's office, the Parish's business office, meeting rooms and an adoration chapel. Upon completion of the Center, the County listed it on the tax assessment rolls as a commercial office building and, therefore, taxable.
The Parish appealed the assessment to the Chester County Board of Assessment Appeals (Board). It sought to have the Center classified as tax exempt claiming it is entitled to an exemption from real estate taxes pursuant to Section 204(a)(1) of the General County Assessment Law (Law), Act of May 22, 1933, P.L. 853, as amended, 72 P.S. § 5020-204(a)(1), and 53 Pa.C.S. § 8812(a)(1) as an actual place of regularly stated religious worship. The Parish alleged that it was entitled to an exemption because the offices and conference rooms of the Parish office and adoration chapel are used by the pastor, church officers and staff to conduct the routine business of the church and are directly related to the worship, prayer, mission and spiritual outreach purposes of the Parish.
That section provides as follows:
(a) The following property shall be exempt from all county, city, borough, town, township, road, poor and school tax, to wit:
(1) All churches, meeting-houses, or other actual places of regularly stated religious worship, with the ground thereto annexed necessary for the occupancy and enjoyment of the same[.]
Following a hearing, the Board exempted approximately 50% of the Center from real estate taxation for tax year 2017. The Parish filed a tax assessment appeal with the trial court contending that the Board erred by not finding the entire Center tax exempt. Downingtown Area School District (School District) intervened in the appeal.
The total assessment for the 39 acres on which the Center sits was $1,023,470, consisting of an assessment of $583,520 for the land and $439,950 for the Center.
I.
Before the trial court, Monsignor Joseph McLoone (Monsignor McLoone) testified that there is an adoration chapel in the Center "which is open 24 hours a day" where any one "can walk up, walk in, and walk into the Chapel 24 hours a day and pray." (Reproduced Record (R.) at 28a.) He testified that the Center has a large conference room where Parish organizations such as bible study groups, a bereavement group, and charismatic prayer groups can meet, and where he can meet with families when a funeral is being planned. He stated that he also meets at his office in the Center with prospective brides and grooms, conducts spiritual counseling, and hears confessions. He testified that, in his opinion, worship occurs in the adoration chapel, senior meeting room and library, but admitted that services in the adoration chapel are "very infrequently" held. (R. at 39a.) When asked, "in what other areas of the Holy Family Center do you say that regularly stated worship services occur," Monsignor McLoone answered, "None. No regularly scheduled." Id. He also stated that "no worship takes place" in the kitchen, youth director's office, community supervisor's office, business manager's office or Parish secretary's office, or even the staff meeting room.
Monsignor McLoone then went on to state that while the Center contains business offices:
I constantly tell the staff that we exist primarily for what we would call the Sunday celebration of the Eucharist. You know, like when 4,000 people come to church on the weekend. So everything we do in that building (i.e., the Center) relates to what's going on in the church, the larger church, which really has no space for these kinds of preparatory things that get us prepared for the weekend celebration. The bulletin is prepared there. The masses are prepared. . . . Everything is done in these - in the office complex and it helps us prepare ourselves so we can come together as a parish family.(R. at 30a.)
Julie Wiant, the Parish's business manager, testified that the Parish is a tax-exempt organization with 26 U.S.C. § 501(c)(3) status. She testified that no portion of the Center is leased out to a third party, no portion is ever used or occupied by organizations outside the church, and no commercial use is made of the Center. She also testified that as part of the municipal approval process for the construction of the Center, the municipality required there to be approximately 22 parking spaces designated for the Center. When asked about the various offices shown on the architectural plan for the Center, Ms. Wiant testified that all the offices and conference rooms are occupied by Parish staff in order to perform the business of the Parish, and that "we all exist for the Sunday services." (R. at 49a.)
The trial court found that none of the Center was actually used or necessary for "regularly stated religious worship," finding:
[T]he property in question is an office building which houses offices, meeting rooms and an "adoration chapel." While these uses might be convenient for operation of a religious facility, they are not necessary, for that purpose.(Trial Court slip op., 2/14/18, at 4-5.)
* * *
In our view and even after a further review of the evidence, we find that the property at issue is not only clearly not an actual place of regularly stated religious worship but it is also not even reasonably necessary for the use and enjoyment of that property which is such actual place of regularly stated religious worship.
Even though the trial court found that none of the Center was being used for regularly stated religious worship, apparently - because none of the taxing bodies filed an appeal from the Board's determination - the trial court affirmed the Board's decision granting the 50% partial exemption of the Center. The Parish then took this appeal claiming it is entitled to a tax exemption for the entire Center.
Our scope of review in a tax appeal case is limited to determining whether the trial court abused its discretion, committed an error of law, or made findings of fact unsupported by substantial evidence. Benedictine Sisters of Pittsburgh v. Fayette County Board of Assessment Appeals, 844 A.2d 86, 88 n.3 (Pa. Cmwlth. 2004), appeal denied, 898 A.2d 1073 (Pa. 2006). A property owner's entitlement to a tax exemption is a mixed question of law and fact, and this Court will not disturb the trial court's decision absent an abuse of discretion or lack of supporting evidence. Camp Hachshara Moshava of New York v. Wayne County Board for Assessment and Revision of Taxes, 47 A.3d 1271, 1275 (Pa. Cmwlth. 2012) (citation omitted).
II.
The Parish claims that all of the Center, as well as the attendant parking area, walkways and other necessary improvements, are entitled to a religious exemption under Section 204(a)(1) of the Law, 72 P.S. § 5020-204(a)(1), because its purpose supports regularly stated religious worship.
At the outset, "[a]n institution seeking a real estate tax exemption bears a heavy burden of establishing its entitlement to such an exemption. A property owner's entitlement to a tax exemption is a mixed question of law and fact, and this Court will not disturb the trial court's decision absent an abuse of discretion or lack of supporting evidence." Camp Hachshara Moshava of New York v. Wayne County Board for Assessment and Revision of Taxes, 47 A.3d 1271, 1275 (Pa. Cmwlth. 2012) (citations omitted).
The Pennsylvania Constitution states that the "General Assembly may by law exempt from taxation: . . . (i) [a]ctual places of regularly stated religious worship[.]" Pa. Const. art. VIII, § 2. Because this provision was a limitation of the power of the General Assembly, the General Assembly's implementation could not be broader than that given to it - in this case, no more than an "actual place of regularly stated religious worship." See Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 44 A.3d 3 (Pa. 2012). In implementing this restriction, the General Assembly enacted Section 204(a)(1) of the Law, 72 P.S. § 5020-204(a)(1), which provides:
(a) The following property shall be exempt from all county, city, borough, town, township, road, poor and school tax, to wit:
(1) All churches, meeting-houses, or other actual places of regularly stated religious worship, with the ground thereto annexed necessary for the occupancy and enjoyment of the same[.]
III.
Mount Zion New Life Center v. Board of Assessment and Revision of Taxes and Appeals (Mount Zion), 503 A.2d 1065 (Pa. Cmwlth. 1986), is the touchstone for what is considered an "actual place of religious worship" and what portion of the property is "necessary for the occupancy and enjoyment of the same" within the meaning of Section 204(a)(1) of the Law.
Mount Zion involved a religious retreat center that provided accommodations to clergy so that they could focus on Christian learning, prayer, counseling and spiritual encouragement. Regarding what was considered worship, Mount Zion did not equate worship with a specific type of formal ceremony involving a church-type building where congregants gather, but rather gave a broad reading to worship which includes prayer and teaching, i.e., the predominant activity at a retreat center. Id. at 1071. In Benedictine Sisters of Pittsburgh v. Fayette County Board of Assessment Appeals, 844 A.2d 86 (Pa. Cmwlth. 2004), appeal denied, 898 A.2d 1073 (Pa. 2006), we further amplified on Mount Zion's holding, explaining that the word "worship" in Section 204(a)(1) of the Law is not limited to a type of formal ceremony involving a church-type building where congregants gather, but also includes prayer, teaching, adoration, meditation, spiritual readings and discussions.
Mount Zion then addressed how a court determined whether property was an "actual place" of religious worship. After examining the case law, we found that the dominant factor used to determine whether the tax exemption authorized by 72 P.S. § 5020-204 was used for religious purposes was not whether the property was only used for worship, but rather whether the primary purpose of the property was for worship while the other non-worship activities were merely incidental. Mount Zion, 503 A.2d at 1071. As an example of property not considered primarily used for worship, we cited with approval Pennsylvania Conference of the Pentecostal Holiness Church v. Mercer County Board of Assessment Review, 25 D. & C.3d 536 (1982). In that case, the court refused to grant a tax exemption for an all-purpose building which was used as a dining hall, a kitchen and a place where classes, seminars, lectures, committee and auxiliary meetings were held, in addition to occasional worship services and a once-per-year retreat which included worship services and seminars, because the primary purpose of the all-purpose building was not for worship, even though it sometimes occurred there.
Applying this "primary purpose" test, in Mount Zion, we held that the retreat center was entitled to an exemption for its meeting hall, a portion of the house and two rooms in its lodge, because those places were primarily used for prayer. However, we affirmed the county's denial of an exemption for non-religious worship related rooms and buildings such as the portion of the house that was used for lodging, the living room of the retreat center's manor house, the storage areas, and the rooms in the lodge that were not used for prayer.
Mount Zion and the cases that followed limited the exemption to only the discrete areas of the property that were primarily used as a place of religious worship. See In re Order of St. Paul the First Hermit, 873 A.2d 31, 39 (Pa. Cmwlth. 2005) (holding that a gift shop, bookstore and cafeteria within a church were not exempt because they were not "essential to the primary use of the Shrine as a place of regularly stated religious worship," as well as three outdoor areas that were primarily used for worship, but were used too irregularly to qualify for an exemption under Section 204(a)(1)); St. Aloysius Roman Catholic Church v. Fayette County Board of Assessment Appeals, 849 A.2d 293 (Pa. Cmwlth. 2004) (where this Court affirmed the allocation of separate areas of the appellant's residence or "parsonage" into either tax exempt or non tax exempt status depending on whether that area could be classified as a place of regularly stated religious worship. We noted that sporadic use of the upper level of the parsonage for religious classes or meetings would not bring it within the scope of the exception); see also Connellsville St. Church of Christ v. Fayette County Board of Assessment Appeals, 838 A.2d 848, 853 (Pa. Cmwlth. 2003) ("The regularity and constancy of this worship brings the primary use of this part of the building within the Mount Zion standards for a place of regularly stated worship.").
Finally, Mount Zion considered the second part of Section 204(a)(1) of the Law, i.e., whether any of the retreat's property was necessary for the occupancy and enjoyment of the exempt property. Citing First Baptist Church of Pittsburgh v. City of Pittsburgh, 20 A.2d 209 (Pa. 1941), the Mount Zion court explained that "necessary" does not mean absolute necessity but, rather, that the property must be more than merely desirable. Mount Zion, 503 A.2d at 1072. Answering the church's argument that the entire property was entitled to an exemption because it was necessary for the occupancy and enjoyment of the places of worship, if that were so, "little limitation will be placed on the amount of land that may be taken over by a church, thereby casting an additional burden on other taxpayers." First Baptist Church, 20 A.2d at 213.
IV.
The Parish here makes an argument similar to the one made in First Baptist. Even though it is not clear in the record that certain areas of the Center were primarily used for religious purposes and other areas were admittedly used for non-religious worship purposes, the Board found the Center to be 50% tax exempt. The Parish is not claiming that this percentage is insufficient to cover those areas being primarily used for religious worship. Rather, its argument is that the Center would not exist without the Parish, and the primary purpose of the Parish is religious worship, which means all the Property that the Parish holds is necessary for religious worship, making it entitled to an exemption.
In its 1925(a) opinion, the trial court stated that the appeal should be dismissed because the Parish's 1925(b) statement fails to identify with sufficient specificity how the trial court erred in reaching its decision. The trial court posits that the Parish thus failed to preserve any issues for appeal. The Parish raised two issues in its 1925(b) statement, generally stating that the Center is actually being used for religious purposes or that the Center is necessary for religious purposes. The specificity that the trial court was apparently expecting was that it erred in finding that none of the discrete areas in the Church were being used for religious purposes. For example, if that were the challenge, the 1925(b) statement should have alleged the trial court erred in not finding that the area occupied by the adoration chapel was used for religious worship or why the conference room that was used occasionally for a charismatic study group and bible study was not used for religious worship. If the Parish had made that argument on appeal that there were discrete areas entitled to exemptions that raised the percentage of the Center in excess of the 50% granted by the Board, we would agree with the trial court that the Parish's 1925(b) statement was deficient. As can be seen above, that was not the argument that was raised. Given that this is a close issue and neither the Board nor the School District are advancing that the 1925(b) statement was deficient regarding the issue the Parish is advancing, we decline to dismiss the appeal for lack of specificity in the 1925(b) statement. --------
However, what this argument ignores is that the Property that is not used for religious worship but merely owned by a religious entity for its convenience in carrying out its affairs is not the same as being necessary for religious worship. Only discrete areas used for religious worship are entitled to the exemption, and even Monsignor McLoone admitted in his testimony before the trial court that there are significant areas of the Center that are not used or necessary for religious worship. Given that no one is challenging the trial court's holding that the Parish is entitled to a religious exemption for 50% of the Center's value, even though it found that the entire Center was not used or necessary for religious worship, we will affirm the trial court.
/s/_________
DAN PELLEGRINI, Senior Judge Judge Brobson did not participate in the decision of this case. ORDER
AND NOW, this 6th day of December, 2018, the order of the Court of Common Pleas of Chester County is affirmed.
/s/_________
DAN PELLEGRINI, Senior Judge