When the owners of the Ritz-Carlton luxury hotel wanted a tax cut, they knew where to turn.

In a private meeting in 2003, the then-chairman of the city Board of Revision of Taxes gave the hotel owners a once-in-a-lifetime deal. He dropped the Ritz’s value from $35 million to $19.5 million, saving it $400,000 a year in property taxes.

The chairman, David B. Glancey, says he can’t remember how he arrived at the number. But he says the break — worth more than $2 million so far — was justified because the hotel was in financial trouble.

“I made a lot of commonsense decisions,” said Glancey, a former Democratic Party chief who left the agency two years ago. He said other BRT members, some still on the board, always signed off on his decisions.

The BRT says it no longer allows those backdoor tax cuts. But the Ritz settlement and hundreds like it live on, part of a legacy of private deal-making that has resulted in millions trimmed from the tax rolls and untold losses to the city’s bottom line.

Decades of such deals and persistent mismanagement by the BRT have left Philadelphia with one of the most unfair and chaotic property tax systems in the nation.

Last week, after years of delays, the BRT finally produced the long-promised fix — a new set of proposed “actual values,” supposedly based on what properties are really worth in the marketplace.

But an Inquirer review of dozens of commercial properties found that many new numbers still bear little resemblance to recent sale prices.

The Red-Lion Bustleton Shopping Center, an 18-store strip mall, is currently valued at $1.04 million. Under the BRT’s new system, its tax value would be $1.5 million, even though last year the property sold for nearly $5 million.

For the BRT, confusing numbers are nothing new. But they are a symptom of deeper problems at the agency, a relic of the 19th century that’s historically been used as a political dumping ground.

Now, with the city in a revenue crisis, an Inquirer investigation raises questions about whether the BRT is capable of handling the complex and politically sensitive task of repairing Philadelphia’s broken tax system.

The review shows:
Political influence pervades the agency. Former assessors say they were routinely pressured to give breaks to people with pull. One said he was ordered to lower the assessment of the Democratic Party headquarters in Center City while other values on the block were soaring.

The agency is a jobs bank for Philadelphia pols. It’s run by a board of seven insiders selected in a backroom process engineered by party leaders. Nearly half the agency’s jobs go to patronage employees who know little about appraisal.

More than 9,000 properties haven’t been reassessed in at least 20 years. The oversight has cost the city millions.

The BRT works far better for insiders than for rank-and-file taxpayers. While some lawyers have won reductions in nearly three-quarters of their appeals, more than half the homeowners who challenge their assessments are turned away.

The BRT has violated state open-government laws for years, hiring contractors, making deals with property owners, and deciding on citywide reassessments without any public meetings or minutes.

The agency’s records are a mess. Assessments have been cut by millions with little evidence to support the decision other than a newspaper clipping, a building diagram — or nothing at all.

Glancey’s settlements violated a BRT rule that said all cuts of more than $150,000 needed full board approval, city audits say. Glancey said he thought he could stand in for the full board.

With the Ritz-Carlton, an apparent BRT goof made a good deal even better. In his settlement, Glancey agreed to limit increases to no more than the rate of inflation until 2010. That sheltered the Ritz-Carlton’s owner, the Arden Group Inc., during the recent real estate boom.

But for the last two years, the agency failed to make even those modest increases, leaving the assessment unchanged.

“That was stupid,” said retired assessor Nicholas Gerace, who once handled the hotel’s file. “Two years of a free ride. That’s unbelievable.”