Big tax hikes on some city homes

In Center City, the $3 million home of the late novelist Pearl S. Buck was hit with a 28 percent tax hike.

Henry S. McNeil Jr., heir to the Tylenol fortune, was told his taxes were going up 108 percent on his $11 million Rittenhouse Square mansion.

On a somewhat humbler block, former City Councilman Angel Ortiz will see taxes go up 25 percent on his four-bedroom home in the Northern Liberties section.

Ortiz, who says he'll appeal, wonders why he's on the list, focused mainly on million-dollar houses in some of the city's swankiest neighborhoods.

"Are they saying, 'This guy is political, and we got to make an example of him'?" he asked.

The list of 54 reassessments released yesterday is just the start. Owners of hundreds of mostly high-end homes in Philadelphia - some of whom have been getting breaks for years - are about to be hit with higher bills.

It's the latest fallout from the disclosures about the long-running tax break that the city gave State Sen. Vincent J. Fumo. His 27-room Green Street mansion, which Fumo was trying to sell for $6 million, until recently was valued at just $250,000.

The Philadelphia Democrat got the biggest tax hike on the list released yesterday; his bill will go from $6,611 to $25,201 next year.

In order not to single out Fumo, assessors from the city's Board of Revision of Taxes have begun to increase values on about 500 other large homes.

Next up are deluxe properties in Chestnut Hill and Northeast Philadelphia, said Eugene Davey, the board's director of assessments.

Davey - whose agency in past years has had a reputation for cronyism - blamed the earlier low valuations on a computer glitch. There was no favoritism, he said.

"It would be hard to believe there would be any special treatment," Davey said.

Under the board's arcane tax system, the city sets "market values" for properties at about a third of the real sale price of comparable homes.

The board then applies a formula to that number to come up with assessments, and tax bills.

But the board's "market value" can vary widely from the real prices - and not just with Fumo's house.

Take the Rittenhouse Square mansion of McNeil, whose father made a fortune helping to develop Tylenol and other products.

For years, the board had set the value at $865,400. Now, it's set at $1.8 million.

Even at the city's one-third formula, that would appear to be a bargain: The house is up for sale for $11.7 million.

"Glamorous square views," says the Realtor's Web site, promising "vast land, grand scale and precious privacy." The 31/2 story townhouse has 8,600 square feet, a carriage house, and enclosed gardens with fountains.

McNeil, who did not respond to a request for comment, was also hit with a 5 percent tax increase on his four-story home at 306-08 S. 19th St.

Davey said assessors were focusing on homes with at least 5,000 square feet of interior space.

Ortiz's four-bedroom house, for example, has 8,400 square feet. The board hiked his value to $250,000, up from $200,000.

Ortiz said he was bemused at how he ended up in such pricey company.

"I'm going to have to elevate my wine buying," he said, adding that his idea of a splurge was a $12 State Store special.

Davey said the process of judging properties is easy for most Philadelphia rowhouses, where there are lots of sales, and values are easier to judge. But with high-end properties, there often are few comparable sales, he said.

Even when properties are on the market - such as Fumo's - the board must fix values based on past sales, he said.

In Fumo's case, he said, the board estimated that the property would eventually sell for about $3 million. Fumo's tax bill will roughly quadruple.

As with the other taxpayers, the senator's higher bill comes due in 2009.

The tax board's biggest bite so far came in the 2000 block of Delancey Place, which Davey describes as one of the most beautiful in the city.

Nine properties on the Center City block, all valued by the board at about $2 million, will be paying higher taxes. One of them is the old Pearl S. Buck house at 2019 Delancey. Buck, awarded the Pulitzer Prize in 1932 for her novel The Good Earth, died in 1973.

In 2006, David and Natalie Bauman - owners of Bauman Rare Books - bought it for $3 million. The Baumans did not respond to a request for comment.

A few doors down, Nancie and Frank Lundy got a letter from the board two weeks ago notifying them that their tax bills would be going from $11,000 to nearly $19,000.

"It's a tough one to take," said Nancie Lundy, who's block captain.

"We don't know if they're just doing this because they figure they can get more from these neighborhoods," she said.

She said the city attempted to significantly hike their assessment a few years ago, and the couple appealed and won a reduction. They are likely to appeal again, though they are weighing other options.

"When my husband opened the bill, the first thing he said was, 'We're moving.' "

Davey said the board would increase assessments of 50 more high-end properties in the next couple of months. Assessors will get to the rest as soon as possible, he said.

The next 50 owners still have not been notified because the board is in the middle of a switch to new computer software.

But even the new system won't catch everyone, he said.

"There are always those odd properties that may not get changed" and must be fixed by hand, he said.

Also on the list of 54 was the Russian United Benevolent Association hall in Northern Liberties. The city boosted the market value of the club's nearly century-old building by 84 percent, almost doubling the annual $2,900 tax bill. This comes after two increases in the last six years, including one last year.

Mike Shiroky, club president, said he was concerned that the dozens of aging Russian and Slavic immigrants who use the hall mostly as a tavern might not be able to afford the increase.

"What are we going to do, shut the doors and sell the place?" said Shiroky. "It's ridiculous. I don't understand why they did this. It's not like we did any improvements - painting is not an improvement."