Weekly Press: Center City District Sued over Maintenance Exemption

Weekly Press: Center City District Sued over Maintenance Exemption

The Center City District (CCD) was slammed with an class-action lawsuit earlier this month from former Pennsylvania Supreme Court Justice Russell M. Nigro on the grounds that the district doesn’t equally apply its public maintenance services to condominium owners.

Or rather, the public maintenance service fees don’t apply to those who purchased their condominiums prior to September 13, 2005.

Created in 1990, the CCD was the city’s first of many improvement districts, like University City’s UCD. It’s mission? That centered on improving the quality of life in several downtown neighborhoods. This entailed using public services to make said neighborhoods cleaner and safer because the city could no longer foot the bill.

Part of the cost of paying for those services however was transferred onto homeowners who reside within CCD, which covers 120 blocks and more than 4,500 properties. It is roughly bounded by the Schuylkill on the west, Sixth Street on the east, Vine Street on the north and Locust Street on the south, with extensions along the Broad Street corridor.

According to the district’s budget, the fees charged each property contributes to its $15.2 million to its annual budget.

So why the lawsuit?

Well in the district’s early days, when the only Condos to dot downtown Philly’s skyline were basically limited to the Academy House at 1420 Locust St., with many of its owners- senior citizens. And according to the CCD’s President Paul Levy, many of those senior citizens couldn’t afford the $93 the district required them to pay in fees. In response, the district allowed owners for whom the condos were their primary residence to file an opt-out exemption.

But that was 1990. As the city’s downtown continued to re-emerge as a booming metropolis of high- end restaurants, cafes and boutiques; its Condo Market also boomed. The opt-out option no longer seemed viable, so in 2005, the Center City District’s Board determined that everyone who purchased condominiums after September 13th of that year were required to pay the district’s fees. Those who had the exemptions would, like NYC’s practice of rent control, remain in place until they moved out.

Nigro, who’s currently employed at the BRT, purchased a $1.35 million condominium on Washington Square after the 2005 deadline, and according to the lawsuit, had to pay $1,176 to the district to cover that year’s assessment.

To George Bochetto, who filed the suit on Nigro’ suit: the district’s assessment is actually a tax. The CCD’s collection policy violates the taxing-uniformity clause of both the Pennsylvania Constitution as well the equal-protection clause of the U.S. Constitution.

Though Levy disputes the lawsuit’s legitimacy. “We believe that the suit that has been filed is without merit and are convinced that the Center City District has done the right thing in allowing long-term owner occupants to “opt out” of the CCD charge,” Levy explained over an email exchange, adding, “We would be concerned if the growth of Center City’s new condominiums had an adverse impact on the senior citizens who have lived in Center City for decades, many of whom live on fixed incomes.”