DV Journal

A Radnor Township commissioner has been crusading for the township to recover some $291,489 in lost tax revenue due to an agreement by the Ardrossan Farms development to lease land to a farmer for $1 a year.

Issues of fairness and the intangible value of preserving open space came to the fore in a sometimes contentious discussion Monday. The Ardrossan estate was the last large piece of property to be developed in Radnor. Township commissioners seven years ago wrangled over trying to preserve part of it as a green swath of land for future generations.

Commissioner Richard Booker argued the township is getting the raw end of the deal by allowing a farmer to lease township property for that small sum. Other taxpayers must make up the brunt of the tax that otherwise would be collected by the township, county, and school district, Booker contends.

However, he lost his motion 4-2, with Commissioner Jake Abel, the other Republican on the board, voting with him. Commissioner Sean Farhy abstained.

Booker had also voted against the original agreement with Richard Billheim’s Fern Valley Farm in 2015.  The agreement allows the wealthy property owners, including County Council Chairman Brian Zidek, a Democrat, to access agricultural tax breaks under Act 319 because Billheim farms part of their properties. Zidek, for example, who owns his 14-acre estate under a limited partnership, paid $4.8 million in 2019. With the agricultural exemption it is assessed at $3.9 million and the township, school district and county receive $14,865 less in taxes yearly because of that exemption.

Zidek did not respond to requests for comment.

Booker said Delaware County’s recent countywide property tax reassessment resulted in “a tax shift” that caused commercial properties to pay less and residential property owners to pay more.

“It’s become clear that the township license agreement with Fern Valley enables landowners to avail themselves of the lower agricultural assessment values,” said Booker. “What I want is to get the township out of the business of farming.”

When the township purchased 71 acres for $12 million from the 300-acre Ardrossan estate that was being developed as upscale housing in 2013, officials promised to build a trail for the public on those acres. So far the township has not built its trail and those acres are being used by the farmer not the public, said Booker.

“There is currently no access to the land by the public and no public facilities,” said Booker. Meanwhile, Radnor Township is paying $600,000 a year in principal and interest on the $12 million it borrowed for that land.

Commissioner Lisa Borowski argued the township benefits from fewer homes being developed at Ardrossan because of the farming and the purchase of the open space. There is less wear and tear on the roads, sewers and fewer children in the school system, she said.  If not for the agreement with the farmer and the subsequent agricultural easements the property owners obtained, “we would have substantial development” at Ardrossan. She promised to work toward building the trail system.

The Montgomery Scott manor house at Ardrossan.

“It’s iconic,” Borowski said of Ardrossan, which inspired the “The Philadelphia Story,” a play and movie based loosely on the late socialite Hope Montgomery Scott, who was portrayed by Katharine Hepburn. “I don’t see how canceling the lease with the farm would be advantageous to us in any way.” It is the last working farm in Delaware County, she said.

Farhy said the lease is “not a good business proposition” for the township. He noted various other entities, like sports clubs that use township property, pay fair market value.

When Booker tried to speak again, Board President Jack Larkin cut off his mic and Farhy jumped up and said, “You are not going to mute us. We have freedom of speech.” Larkin then called a recess.

Kate Wolff, who is the wife of Billheim, said “We disagree vehemently with Booker and Farhy’s comments. While the lease is only for a dollar, we actually provide the township much more in return.”

For example, Wolff said, “We keep the fences repaired, the fence-lines trimmed and the fields maintained. And of course we have our beautiful cows in the fields for everyone to see and enjoy. This hilly ground and low-lying wetland is perfect for cattle but not suitable for anything in regards to fields for sports.”

“We donate the upkeep of this land to the township. If we did not pay the costs to maintain this ground, the township would take on that expense, creating more taxes for residence,” she said.

“As for the homeowners who have purchased tracts on Ardrossan, we appreciate that people with enough money can donate land.” she said. “Most people can’t. We support these preservation tax laws. Open ground is shrinking. Once it’s gone, it’s gone. You can’t get it back.”

During public comment, resident Leslie Morgan said, “A dollar a year is not a fair market value.” The property owners claiming the agricultural exemption should do their own farming or have agreements with Fern Valley. Her parents, who are in their 90s continue to farm on their land that receives an agricultural easement in Chester County.

“Brian Zidek can consult me, maybe my mom can come out to help him,” said Morgan.

Sara Pilling, another resident, complained that the farmer is using herbicides and pesticides on the corn he grows.

“When Hope Scott had bovines on her property, they were Ayrshire milk cows” but Billheim now has 60 Black Angus beef cattle, which are different animals and could be dangerous to children, especially during spring calving season.

“This is an incompatible business,” said Pilling.

In a related matter, many of the new homeowners also bought adjacent lots and deeded those to the North American Land Trust, receiving tax benefits and deed-restricted open space that can’t be developed next to their houses, a plan promoted by Eddie Scott, who was selling off the land on behalf of his family.  Scott declined to comment.

Meanwhile, several of the Ardrossan Farms residents are appealing the reassessment of their properties and Delaware County opposes those appeals.

“As for local taxes, I reject the premise that all taxpayers in Delaware County should subsidize these folks in Radnor,” said William Martin, the county solicitor. “There is clearly a value to the property staying undeveloped. It contributes to the value of the properties at Ardrossan Farms. The assessment is modest given the value of the Ardrossan properties. There is no reason for the rest of the county taxpayers to be subsidizing those mansions.”

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President Joe Biden’s Build Back Better Act, which just passed in the House and is now headed for the Senate, has been sold to Americans by the president, Nancy Speaker Pelosi, and Senate Majority Leader Chuck Schumer with the oft-repeated line that the wealthy need to “pay their fair share.” Why then does this bill contain a massive tax cut for the rich?

Raising the SALT cap has been acknowledged to be a tax cut for the rich by the left and right alike. The New York Times, The Wall Street Journal, Slate, and Fox Business have all reported it as such.

According to the left-leaning Tax Policy Center, the top 20 percent of earners would reap more than 96 percent of the benefits of a SALT (state and local tax) deduction repeal, and the top one percent of all earners would see 57 percent of benefits.

So, if Democrats hate tax cuts for the rich, what’s so special about this one?

Well, it doesn’t benefit all the rich. It’s actually a tax cut that almost exclusively benefits wealthy people in blue states with confiscatory state and local tax policies.

The SALT deduction forces the country as a whole to subsidize state and local taxes which pay for local state and local services. In other words, it forces every taxpayer in the country to share the tremendous tax burden of being rich in a place like California.

That means when a firefighter in Delaware pays federal taxes, part of it goes to make sure the rich don’t have to shoulder the whole cost of having excellent public schools in the suburbs of California.

When a coal miner in West Virginia pays federal taxes, he or she is helping a rich person in the suburbs of New York shoulder the cost of a lovely mass transit system that the coal miner will never set eyes on.

In Pennsylvania, 91 percent of taxpayers take the standard deduction, so only 9 percent of Pennsylvanians could possibly benefit from raising the SALT cap. And those who do benefit from it are almost always in the highest tax brackets.

People in New York were upset earlier this year when then-Governor AndrewCuomo hiked the already outrageous rates people there pay in taxes. But Cuomo told them not to worry because taxpayers from sea to shining sea will pick up the tab. “When you talk about this tax package you cannot talk about it without anticipating a SALT repeal,” Cuomo explained. “When SALT is repealed, the taxes will be going down.”

But taxes won’t be “going down” in New York when the SALT cap is raised. What will actually happen is that the tax burden will be shifted from the wealthiest New Yorkers to every single American taxpayer. The poorest federal taxpayers will help the wealthy in a handful of blue states shoulder the burden placed on them by government officials suffering from a severe Robin Hood complex.

If you’re skeptical that this deduction benefits almost exclusively wealthy people in blue states—if you’re saying to yourself, “Hey, Democrats watch out for people like me. They would never support what amounts to a regressive tax that makes me pay for government services in faraway places,” then just take a look at the members of the House SALT caucus who are dedicated to getting rid of the cap.

Of the caucus’s 31 members, 29 represented districts in California, New York, New Jersey, or Illinois.

Thirteen of the 31 represented one of the top 50 wealthiest congressional districts in the country.

Six of the members represented one of the top 10 richest districts in the country.

When this tax cut for the rich passed the House, Rep. Gottheimer, co-chair of the SALT caucus who is from New Jersey and represents the 13th richest district in the U.S., tweeted: “We scored a big round against the Moocher States.”

Gottheimer hasn’t named any of these “moocher states” except for Kentucky. But other “moocher states” would likely include Delaware where, according to the Tax Foundation, 89 percent of people take the standard deduction. Delaware reaps about 0.28 percent of SALT deduction benefits compared to New Jersey’s 5 percent. Why would Sens. Tom Carper and Chris Coons vote for a bill that scores big against Delaware?

I sympathize with wealthy people in blue states who work hard and then get taxed into oblivion by their local politicians. But a better solution would be to either elect different people — or maybe move to Florida or New Hampshire

The solution is not to make the people of Pennsylvania pick up the tab.

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