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Panel rejects YMCA's latest request for tax exemption

Wednesday, January 26, 2000

By Marylynne Pitz, Post-Gazette Staff Writer

The Downtown YMCA lost its property tax exemption this week and could wind up having to pay city, county and school district taxes unless it successfully challenges that ruling.

Under an agreement reached in 1989, in lieu of taxes the YMCA for the past decade has made payments that were the equivalent of 40 percent of what its assessment would have required. But last year, it reapplied for an exemption.

The Allegheny County Board of Property Assessment, Appeals and Review voted to reject the YMCA's exemption request after two of its members, Kenneth Behrend Jr. and Michael Suley, held hearings.

Clifford Levine, a lawyer for the YMCA, insisted yesterday that the nonprofit organization meets all five legal criteria for tax exemption and said his client will appeal to Allegheny County Common Pleas Court.

The Downtown YMCA's land and building are assessed at $1.8 million. If it had to pay taxes at the Pittsburgh Board of Education's rate of 59.5 mills, for example, the school district would receive about $107,000 annually.

As the property board's decision is retroactive to 1999, the YMCA could wind up paying the school district as much as $214,000 in taxes to cover 1999 and 2000. The ruling also would apply to city and county taxes.

During the hearings, Ira Weiss, a lawyer for the school board, argued that a health club occupies 40 percent to 50 percent of the property and that the YMCA should be taxed as a result.

"The Y says the health club is an integral part of their mission," Weiss said yesterday.

The Downtown YMCA has waged battles over its tax-exempt status for at least the past two decades.

Initially, the property assessment board said the nonprofit organization was 12 percent taxable. Both sides appealed, and Allegheny County Common Pleas Judge Ralph Smith decided the YMCA was 100 percent taxable. The YMCA appealed to Commonwealth Court, which sent the case back to Smith and ordered a floor-by-floor evaluation of the building and its programs.

Then, a settlement was reached, requiring the YMCA to pay 40 percent of what it would otherwise owe in taxes.

Levine said that because of recent decisions and a new Pennsylvania law, the issue of tax exemptions is much clearer now.

To qualify for exemption, an organization must be open to the public, have a charitable purpose, serve clients regardless of their incomes, donate a substantial amount of services, benefit an "indefinite class" of people and relieve the government of some of its burden.

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