Testimony wraps up in assessment appeal case
WAYNESBURG – Allegheny Energy Supply Co. LLC and Greene County representatives wrapped up testimony Wednesday in the latest appeal by the property owner of the county’s assessment for Hatfield’s Ferry Power Station. The Greene County Board of Assessment Appeals last October affirmed the power station’s assessment for the 2003 tax year at $79.5 million and an accompanying fly ash disposal and reclamation site at another $1.1 million. The property owner appealed the board’s decision to Greene County Court of Common Pleas.
Allegheny Energy’s legal counsel presented an expert witness, Donald E. Goertel, Tuesday whose appraisal of the site totaled $5.6 million for the power station buildings and 146.54 acres of property and $154,000 for the 165.70-acre ash dump and one building.
To counter the property owner’s presentation, county solicitor David Hook and Southeastern Greene School District solicitor Lee Price, representing the taxing bodies, called Wednesday on an independent appraiser, William Thomas Bott of Equity Appraisal Co., who set a value of $11.6 million on the power station and property and $1.3 million on the ash dump.
No machinery or equipment was considered in either appraisal.
Judge William Nalitz heard two full days of testimony before the two sides concluded their arguments late Wednesday afternoon. Nalitz will eventually rule on the site’s market value. In the meantime, he directed the court reporter to provide the attorneys with a transcript of the proceedings within 20 days, gave the two sides 20 days to file briefs in memorandum to support their positions and another 10 days for anyone else to file a brief in the matter.
This is an ongoing battle, with appeals on previous tax years still active in the Commonwealth Court.
The school district in 1999 took advantage of a change in the Public Utility Realty Tax Act (PURTA), which allowed taxes to be paid to the county, municipality and school district in which a power plant resides. Acting on Southeastern Greene’s appeal of the $2.75 million market value of Hatfield’s Ferry, the Greene County Board of Assessment Appeals in 2000 raised the value of the power station to $70 million
Allegheny Energy appealed and court action ultimately resulted in the site’s value for 2000 and 2001 set at $7.7 million and $8.3 million, respectively. It is those tax year assessments that remain a subject of legal wrangling apart from this latest appeal.
Goertel testified to the methodology he used to determine the value of Hatfield’s Ferry, outlining a cost approach analysis of the site that in part involved a review of the real estate market and calculations for depreciation and obsolescence. The county and school board attorneys questioned Goertel at length about the choice of what he referred to as comparable sales. Based on the comparable sales, Goertel had set a value of $1,200 an acre for the power plant land and $800 an acre for the ash site.
Allegheny Energy attorneys Carleton Strauss and Christopher Nestor presented Goertel’s colleague, Raymond C. Geiger Jr., to further explain the market review and related calculations.
However, Hook and Price in their questioning of Geiger and subsequent testimony by the county’s chief assessor, H. John Frazier, pointed out several sales in Greene County that came in after the June 2002 date of the real estate review and meant for industrial use that were worth much more than the appraisal’s figures.
In comparison, Bott’s appraisal put a value on the land at the power station at $12,011 an acre and the land at the ash site at $7,563 an acre.
Bott testified regarding methodology and the cost approach analysis he took in determining the overall market value for Hatfield’s Ferry, explaining his calculations regarding the market for such property, depreciation and obsolescence, the exclusion of certain buildings and inclusion of parts of the remaining structures without machinery and equipment.
He said the appraisal determined the highest and best use of the property vacant and with improvements is for a power generation plant, talking about characteristics of the site like the Monongahela River that is navigable by barge, frontage on the state’s Route 21 and an electrical service line connected to the regional grid.
Strauss objected to Bott’s testimony on the appraisal because he referred to the highest and best use of the site as a power generation plant or for continued operation as a power generation plant. He said the courts have already determined the site must not be considered for its current use.
Bott gave detailed testimony that was questioned at length by the attorneys. He talked about a variety of issues such as analysis of the site as vacant property and the cost for reproduction of the site with certain structures included, still contending the site is a prime location for development as a power generation plant.