Immunity, tax exemption, failure to comply with law and a lack of jurisdiction are the reasons the Pennsylvania Office of Attorney General wants Crawford County Court of Common Pleas to halt a planned sheriff’s sale of Conneaut Lake Park.
The 122-year-old amusement park faces a sheriff’s sale Nov. 7 to force payment of more than $925,000 in overdue real estate taxes, penalties and interest owed to the Conneaut School District, Crawford County and Sadsbury and Summit townships, dating back to 1997.
But Wednesday afternoon, the Office of Attorney General Kathleen Kane filed preliminary objections to the proposed sheriff’s sale and a petition to have county court halt the sale. A hearing date for petition is expected to be scheduled by county court by early next week, according to John Shuttleworth, county court administrator.
In the filing, the state argues the park is a tax-exempt charitable trust and any buyer “should be on notice that the land must be used for the public’s benefit, use and enjoyment.”
Mark Turner, executive director of Trustees of Conneaut Lake Park, the nonprofit corporation that owns the park, said Trustees had been hoping the state would intervene to try and halt the sheriff’s sale.
“We’re delighted to have an ally in that effort,” Turner said Wednesday afternoon.
On Sept. 10, the four taxing bodies filed a joint motion for a sheriff’s sale to force payment of $927,812.95 in property taxes, interest and penalties owed to them plus $14,029 in attorneys’ fees as well as costs associated with the sale to be added.
Trustees of Conneaut Lake Park have been considering filing for bankruptcy protection with U.S. District Court. That would halt any sheriff’s sale while the park seeks bankruptcy court approval to reorganize its debts and set a repayment plan. Last month, Trustees hired George T. Snyder, a partner in the Pittsburgh law firm of Stonecipher, Cunningham, Beard & Schmitt, to start bankruptcy proceedings. However, any filing of bankruptcy is projected to cost the park as much as $250,000.
“We don’t want to be quick to run to bankruptcy if we don’t have to,” Turner said in the wake of the AG office’s filing Wednesday. “The (county) court will have to determine how to deal with the back taxes. Are the back taxes due or not? That’s among the important questions in the petition that will have to be determined going forward for Conneaut Lake Park.”
The Office of Attorney General argues that Conneaut Lake Park has immunity from a sheriff’s sale since the park was conveyed to Trustees of Conneaut Lake Park Inc. in trust for perpetual benefit of the public in two deeds dated Aug. 31, 1997, and Sept. 15, 1997.
The Attorney General’s office argues Pennsylvania’s Supreme Court has ruled when land was conveyed to an association for a public park, any sheriff’s sale to satisfy the association’s debt didn’t end the trust or end the charitable use of the property.
Because Conneaut Lake Park is a public park held by nonprofit trustees for the benefit of the public, it should be tax-exempt property under state law, according to the Attorney General’s filing. The taxes may not have been properly assessed. However, the Attorney General’s Office admitted some portions of the park may be taxable.
The Attorney General’s office argues the charitable use restrictions in the deeds go with the land, and Pennsylvania’s courts have ruled that way consistently. “The notice of sheriff’s sale does not indicate the current charitable use restrictions on the park property,” according to the AG office’s petition. “Any potential buyers should be on notice that the land must be used for the public’s benefit, use and enjoyment.”
The Attorney General’s office also argues the sheriff’s sale is improper and should be dismissed since any sale of the park can’t be done through the court’s Civil Division. Under Pennsylvania law, exclusive jurisdiction of nonprofit charitable organizations like Conneaut Lake Park is within the Orphans’ Court division and any sale or change of the park’s purpose must be done through Orphans’ Court first, according to the petition.
Contacted by the Tribune, Francis Weiderspahn Jr., chairman of county commissioners, said he wasn’t surprised by the Office of Attorney General’s filing.
“Trustees have a right to protect their interest in the park,” Weiderspahn said. “It’s up to their attorney, the Attorney General’s office, the attorneys of the taxing bodies and the courts. It’s beyond the expertise of the commissioners. We’ve not dealt with anything like this before.”
Conneaut School Board President Dr. Walter Thomas declined comment after the school district’s public work session Wednesday night.
Both Kevin Van Honk, chairman of Sadsbury Township’s board of supervisors, and William Agnew, chairman of Summit Township’s board of supervisors, declined comment Wednesday when contacted by the Tribune.
Keith Gushard can be reached at 724-6370 or by email at email@example.com.