Another Downtown property gets a large assessment reduction
Another Downtown skyscraper has won a big property assessment cut, adding to the woes facing the city’s tax base.
The assessment on One PNC Plaza has been sliced from $60 million to $37.3 million, a $22.7 million reduction for the 2023 tax year. For 2022, the assessed value was trimmed by $20 million to $39.9 million.
Allegheny County assessment board members approved the cuts Thursday.
One PNC Plaza is the 11th prominent Downtown property to get a substantial reduction, adding to the mounting tax losses facing the city, the Pittsburgh Public Schools, and the county.
At the same time, the taxing bodies did receive a rare bit of good news Thursday from the assessment board as it relates to Downtown.
Assessment board members voted to revise the 2022 taxable value on the Even Hotel at 425 Forbes Ave., part of the Kaufmann’s department store redevelopment, from $ 991,600 to $9,915,500. For 2023, it was increased from $1 million to nearly $10.7 million.
Before the appeals, the hotel’s assessment was $13.4 million so it is still receiving a break, though not nearly as significant as before Thursday’s change.
The board had approved the reductions to $991,600 and $1 million, respectively, two weeks ago. Amy Schrempf, assessment board solicitor, said Thursday those numbers were the result of a “typographical error.”
“It was our mistake and we just wanted to correct it,” she said.
In all, the 2023 assessments on the 11 Downtown buildings, even with the revised Even Hotel calculation, have been slashed by $354.8 million. They could cost the three taxing bodies a combined $8.1 million in tax refunds for just last year alone.
The massive cuts have triggered warnings from both the city controller and Pittsburgh schools officials about the potential for big refunds or revenue losses.
They also have energized efforts to offer expanded tax abatements and other aid to Downtown building owners and developers who want to convert office space to residential units.
The cuts are the result of two factors. The first is rising office vacancies caused in large part by the COVID19 pandemic and hybrid work policies. The other is a steep drop from 87.5% to 63.5% in the common level ratio, the number used in appeal hearings to calculate taxable value. The ratio fell again this year to 54.5%.
As a result, city school directors are considering a possible lawsuit to force the county to do a reassessment. The last one, in 2012, was ordered by the courts.
For PNC, the One PNC Plaza reduction is the third it has received Downtown.
The assessment on the Tower at PNC Plaza, the bank’s headquarters, was slashed by more than half, from $147.2 million to $72.3 million for the 2022 and 2023 tax years, a reduction of $74.8 million.
At Two PNC Plaza, the 2023 taxable value plunged from $53 million to $33.8 million, or by about $19.1 million. For the 2022 tax year, it fell $16.6 million to $36.3 million.
Combined, the bank has received $116.6 million in assessment cuts on those three Downtown properties for the 2023 tax year and $111.4 million for 2022.