A Butler Township business recently lost an appeal in the Commonwealth Court of Pennsylvania, which upheld the tax appraisal of the AK Steel property in favor of the Butler School District, Butler Township and Butler County.

The opinion, delivered Tuesday, affirmed a March 9, 2016, decision by the Butler County Court, upholding the tax appraisal of the AK Steel property, owned by Armco Advanced Materials Corp., at $2.12 million for the 2015-16 school year, and $1.97 million for the 2016-17 school year.

The business had appealed the decision in November 2016 on the 1,256.927 acre parcel of land with 2,837,720 square feet of building area, which comprises the AK Steel Butler Works steel plant at 1 Armco Drive, Butler.

According to the opinion, for the 2015 municipal and county tax year, Butler County assessed the taxable property at $2.9 million, following an implied market value of $25.6 million for 2015 and $27.5 million for 2016.

AK Steel appealed that assessment. Following a hearing with the county Board of Property Assessment, that assessment was upheld, and the company then appealed that decision to the county court. The matter was referred to a Board of Arbitrators, who later found the market value of the property to be $18.62 million, thus reducing the tax assessment to $2.12 million for 2015.

Tom King, solicitor for the school district said all taxing bodies involved lost money on the appeal to begin with.

“They were successful by virtue of the common level ratio and having their taxes reduced,” he said.

Still unhappy with that assessment, the company again appealed that decision to the county court.

A tax assessment hearing and non-jury trial were later held in Butler County Court before by Judge Michael Yeager, with testimony from two different appraisers, Paul Griffith for the company, and David King of Nicklas King McConahy in Cranberry Township on behalf of the district and county.

Griffith testified that he determined the fair market value of the property to be $8.4 million based on the land use and property.

Fair market value is “the price which a purchaser, willing but not obligated to pay, would pay an owner, willing but not obligated to sell, taking into consideration all uses to which the property is adapted and might be reasonably applied,” according to the opinion.

His testimony did not view the highest and best use of the property as an industrial plant, and evaluated it as though it were a dead or nonfunctioning facility. He also went so far as to say that 650 acres of the property had a value of zero dollars to any buyer, according to the court opinion.

David King testified that he determined the market value of the property at $18.62 million, arguing for the $2.12 million assessed taxable value, with the highest and best use of the property as continued use as a steel mill.

The trial court accepted David King's assessment.

“A victory in these tax cases is holding the line, which is a problem with our tax system in Pennsylvania,” Tom King said. “We were able to stick our thumb in the dike.”

Upon appeal of that decision, the company argued that the trial court erred in adopting David King's assessment because he inappropriately considered its current use as its highest and best use despite a lack of any supporting evidence, as well as the property's value-in-use, concluding that he overvalued the property and used an improper factor in determining the fair market value.

The state court determined that the trial court has the discretion to decide which valuation method to use to value a particular property, and the trial court had determined that David King “did not use the property's current use as its highest and best use without substantial supporting evidence.”

“We were pleased that the Commonwealth Court dismissed the appeal and agreed with our position and with that of our appraiser,” Mike English, Butler County solicitor, said.

“Those will be the figures going forward unless any interested party would file an appeal,” he said of future tax collection.

Lawrence Lutz of Lutz & Pawk, who represented the township, credited the decision on the hard work of appraiser David King.

“We are happy at the decision at this point, and happy that we had the right appraiser,” he said.

English said the business had exhausted its “last appeal of right” but could ask the Pennsylvania Supreme Court to hear the appeal, which may or may not grant that request.

However, Tom King said the company has already filed an appeal to further tax collection years.

Officials with AK Steel declined to comment, and their attorney William Bresnahan II of Dickie McCamey & Chilcote PC did not return messages as of press time.

Currently, the Butler School District's property tax rate is 101 mills, meaning a $2.1 million assessment yields roughly $212,000 annually in property taxes. The company had been paying the school district about $275,000 on a $2.9 million assessment.