CRANBERRY TWP — The Westinghouse campus sold in January for $180 million. Real estate tax was paid on just $145.4 million of the transaction.

That $34.6 million gap represents a loss of $173,000 in deed transfer taxes each to the township and Seneca Valley School District.

But the site's former owner says state law mandates that result.

In a March 6 letter to Cranberry Township Manager Jerry Andree and Seneca Valley Superintendent Tracy Vitale, Columbia Property Trust laid out the details of how the $180 million sale was conducted.

Because “membership interests” in a number of holding companies were sold — rather than the property itself — tax was not owed on the $35 million gap between the property value and sale price, said Debbie Newmark, Columbia's senior director of corporate compliance and transactions.

“Under Pennsylvania law, if 90 percent or more of a real estate entity is sold, realty transfer tax is paid upon the 'Computed Value' of the real estate, ... and not based upon the purchase price paid for the acquisition of the acquired company,” the letter states.

The 823,979-square-foot property in Cranberry Woods was passed through at least four holding companies to facilitate the $180 million January sale. According to records filed with the Butler County Recorder of Deeds, realty transfer tax — 1 percent to the commonwealth and 0.5 percent each to the township and school district — was paid on the $144 million computed value of the property.

The computed value of real estate is taken by multiplying the county's assessed value by the state-promulgated common level ratio.

A number of property-sale-related loopholes have been closed in the past decade, including the “89-11” loophole in which a company would buy 89 percent of a property, then later buy the remaining 11 percent. That permitted the full nonpayment of deed tax.

After that loophole was closed, companies quickly found another way to bypass deed taxes: buying an entity that owned a single building, rather than the property itself. Though that loophole was closed by Act 52 of 2013, the Westinghouse transaction — which includes at least four holding companies — appears to be more sophisticated than the one-holding-company transactions used prior to Act 52.

Andree said the township has been in touch with the office of state Sen. Scott Hutchinson, R-21st, about the transaction.Recently, Andree said, Hutchinson's office has assured Cranberry that the state's Department of Revenue will audit the transaction, as they do with a number of other realty transfer taxes.“I am very, very confident the people of the commonwealth will do their due diligence,” Andree said.A request for comment from the revenue department on the process of reviewing such a transfer was not immediately returned Monday.

While the Eagle has reported the buyer of the Westinghouse campus is Fortress Investment Group, a New York equity firm, there has been little in the way of official confirmation.The March 6 letter to the township and school district identified the buyer of the property as CF Reactor LLC, a holding company created in Delaware in November, according to that state's Department of State filings.According to those filings, the principal place of business for the newly formed LLC is Fortress Investment Group.