AGREEMENT for PAYMENT IN LIEU OF TAXES THIS AGREEMENT made this day of, 2013, by and between WARMINSTER TOWNSHIP, a Township of the Second Class, having a principal business address of 401 Gibson Avenue, Warminster, PA 18974 (the Township ), COUNTY OF BUCKS, having a principal business address of 55 East Court Street, Doylestown, PA ( County ), CENTENNIAL SCHOOL DISTRICT, having a principal business address of 433 Centennial Road, Warminster, PA 18974 (the School District )(collectively, the Township, the County and the School District, are referred to hereinbelow, as the Taxing Districts ), and ANN S CHOICE, INC., a Maryland Not-for-Profit corporation authorized to do business in the Commonwealth of PA, with a principal business address of 701 Maiden Choice Lane, Catonsville, Maryland 21228 ( Ann s Choice ). WHEREAS, Ann s Choice is the owner and operator of a certain property known as Ann s Choice continued care retirement community located at 10000 Ann s Choice Way, Warminster, PA 18974; WHEREAS, the real estate on which the Ann s Choice continued care retirement community is located is identified as Bucks County Tax Parcel No. 49-24-15-12 (the Property ); and WHEREAS, the primary use of the Property is that of a continued care retirement community ( CCRC ) which the parties acknowledge is deemed a purely public charity as defined by the Pennsylvania Constitution and Pennsylvania Institutions of Purely Public Charity Act, 10 P.S. 371 ( Act 55 ); and WHEREAS, on January 20, 2012, Ann s Choice filed an Amended Complaint in the Court of Common Pleas of Bucks County, PA (the Court ) at Docket No. 2011-03127, seeking declaratory judgment in its favor and against the Taxing Districts, in the nature of a declaration 1
by the Court that a certain February 21, 2001, PILOT Agreement by and between Ann s Choice (or its predecessors in interest) and Taxing Districts is invalid unenforceable and void ab initio, and further seeking a refund of all payments made by Ann s Choice to Taxing Districts from 2001 to the filing of the Complaint; and WHEREAS, Ann s Choice commenced a second action against the Taxing Districts on February 24, 2012, by the filing of a Complaint for Refund pursuant to 72 P.S. 5566(c) in the Court, seeking refund of certain sums paid by Ann s Choice to the Taxing Districts pursuant to the above-referenced February 21, 2001 PILOT Agreement, for all periods from December 2008 to December 2011. Said case is docketed in the Court at No. 2012-01743; and WHEREAS, contemporaneously with the filing of the foregoing civil actions, Ann s Choice commenced two (2) tax assessment appeals, both of which challenge the assessed value of the Property, which same appeals are docketed in this Court at Nos. 2012-00048 and 2012-02239. Taxing Districts have all intervened in the foregoing tax assessment appeals; and WHEREAS, subsequent to the filing of the foregoing actions, Ann s Choice commenced a tax assessment appeal, which challenges the assessed value of the Property, from the Notice of Assessment Change dated March 12, 2012, which same appeal remains pending at the Board of Assessment of Bucks County; and WHEREAS, each of the foregoing actions arise from or relate to the underlying question of what value should properly be assigned to the Property and what, if any, payments previously made to the Taxing Districts in the form of PILOT payments must be refunded to Ann s Choice; and WHEREAS, the parties have consulted regarding the issues in these cases, and the mutual benefit to be derived from the resolution of these matters through negotiated settlement; 2
WHEREAS, the Taxing Districts and Ann s Choice desire to affirm the tax exempt status of the Property, to avoid appeals or litigation regarding the determination that the Property is entitled to exemption from real property taxes, and further desire to provide a basis for the voluntary payment in lieu of real property taxes to the Taxing Districts pursuant to the authority set forth in the Pennsylvania Institutions of Purely Public Charity Act, 10 P.S. 371 ( Act 55 ); and WHEREAS, the Taxing Districts agree that the Property is exempt from local real property taxes and agree not to contest the determination that the Ann s Choice Property is entitled to an exemption from real property taxes, so long as the payments in lieu of taxes that are provided for in this Agreement are made. Ann's Choice and the Taxing Districts further agree, upon execution of this Agreement, to discontinue the litigation in the Court of Common Pleas of Bucks County, and as presently pending at Docket Nos 2011-03127, 2012-01743, 2012-00048 and 2012-02239, and as presently pending at the Board of Assessment; NOW, THEREFORE, in consideration of the foregoing promises and other good and valuable consideration as hereinafter set forth, the parties, intending to be legally bound, hereby agree as follows: 1. INCORPORATION OF RECITALS. All of the foregoing recital paragraphs set forth above in this Agreement are herein incorporated by reference as if set forth at length. 2. WAIVER. Ann s Choice waives any and all claims to any portion of any refund for any amounts paid under the February 21, 2001 PILOT Agreement. 3
3. VOLUNTARY PAYMENT Ann s Choice agrees to make monetary contributions (hereinafter referred to as Voluntary Payments ) to the Taxing Districts during the term of this Agreement as follows: a. For tax year 2012 and annually thereafter during the term of this Agreement, Ann s Choice shall make Voluntary Payment as follows: a. To the Township in the amount of $ 218,370; b. To the County in the amount of $ 296,789; and c. To the School District in the amount of $ 1,484,841. b. Timing of Voluntary Payments a. For tax year 2012, Voluntary Payments provided hereunder representing past due payments for 2012, shall be made by Ann s Choice to the Taxing Districts in quarterly installments on or before March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013. b. For tax year 2013 and thereafter, Voluntary Payments provided hereunder shall be made by Ann s Choice to the Taxing Districts on a quarterly basis, and shall be paid on a calendar year basis, on or before March 31, June 30, September 30 and December 31 of each year. c. In addition, upon execution of this Agreement, Ann s Choice shall pay the Taxing Districts the following amounts representing full and final payment of all past due PILOT payments (under the 2001 PILOT) as follows: a. $1,378,634.00 to School District, paid in two equal installments of $689,317 each, due July 31, 2013 and January 31, 2014; 4
b. $650,000.00 to Bucks County on or before March 31, 2013; and c. $142,855.78 to Warminster Township on or before March 31, 2013. 4. EXEMPTION OF PROPERTY. In consideration of Ann s Choice s undertaking as described herein, the Taxing Districts hereby warrant, covenant and agree that, for purposes of the Property at issue, they shall consider and treat Ann s Choice as an institution of purely public charity and the Property as exempt from real property taxes for each year covered by this Agreement, and that they will not take any action to challenge or otherwise change the tax exempt status of the Property under the Pennsylvania Constitution, Act 55, the General County Assessment Law, or otherwise during the term of this Agreement. 5. TERM. This initial term of this Agreement shall be for a period of forty (40) years, commencing January 1, 2012 and expiring on December 31, 2051. 6. ADJUSTMENT OF ANNUAL PAYMENT. Payments under this Agreement shall remain fixed during during the first five years of the term, as set forth in paragraph 3 of this Agreement. At the end of the first five year interval and thereafter at each next five year interval, the Voluntary Payment for such five year interval shall be adjusted upward by an amount that is equal to the average 12 month Philadelphia Area Consumer Price Index (CPI-U for ALL ITEMS) for the four (4) preceding years. Once adjusted, the Voluntary Payment for the five year interval shall remain fixed for that interval. 5
7. BINDING EFFECT. a. This Agreement shall remain in full effect, and shall bind the parties hereto, so long as the principal use of the Property is a continued care retirement community. b. If, at any time during the term of this Agreement, the primary use of the Property shall change from a continuing care retirement community to another use, then, in that event, upon Notice to Ann s Choice as provided under this Agreement, the Property shall be subject to the imposition of real estate taxes according to law, and the terms of this Agreement shall be deemed of no further force or effect. c. At the end of the Term, the Property s assessment will be set in the same manner as all other taxable real estate is assessed in Bucks County. 8. NOTICE. Any notice contemplated under this Agreement shall be provided, in writing, to the other party, at least 120 days prior to any action contemplated in the notice. 9. PILOT AGREEMENT. The parties acknowledge and agree that this Agreement is intended to be a voluntary agreement (i.e. a voluntary PILOT Agreement) within the meaning of Act 55, 10 P.S. 373, 377. 10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. 11. BINDING EFFECT. This Agreement shall be binding upon the parties and their successors and assigns. 6
IN WITNESS WHEREOF, the parties have set their hands and seals, with the full intent to be legally bound hereby, on the date first written above. WARMINSTER TOWNSHIP By: Attest: BUCKS COUNTY: By: Attest: CENTENNIAL SCHOOL DISTRICT By: Attest: : ANN S CHOICE, INC. By: Attest: : 7
COMMONWEALTH OF PENNSYLVANIA : : SS. COUNTY OF BUCKS : On this day of, 2013, before me, the undersigned officer, personally appeared who acknowledged himself to be the of ANN S CHOICE, INC., and that as such, he was duly authorized to execute and that he executed the foregoing PILOT Agreement for the purposes therein contained by signing the foregoing Agreement with the full intent to be legally bound thereby. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public 8
COMMONWEALTH OF PENNSYLVANIA : : SS. COUNTY OF BUCKS : On this day of, 2013, before me, the undersigned officer, personally appeared who acknowledged himself to be the CHAIRMAN of the Board of Supervisors of WARMINSTER TOWNSHIP, and that as such, he was duly authorized to execute and that he executed the foregoing PILOT Agreement for the purposes therein contained by signing the foregoing Agreement with the full intent to be legally bound thereby. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public 9
COMMONWEALTH OF PENNSYLVANIA : : SS. COUNTY OF BUCKS : On this day of, 2013, before me, the undersigned officer, personally appeared who acknowledged himself to be the CHAIRMAN of the Board of Commissioners of Bucks County, and that as such, he was duly authorized to execute and that he executed the foregoing PILOT Agreement for the purposes therein contained by signing the foregoing Agreement with the full intent to be legally bound thereby. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public 10
COMMONWEALTH OF PENNSYLVANIA : : SS. COUNTY OF BUCKS : On this day of, 2013, before me, the undersigned officer, personally appeared who acknowledged himself to be the PRESIDENT of the Board of Directors of CENTENNIAL SCHOOL DISTRICT, and that as such, he was duly authorized to execute and that he executed the foregoing PILOT Agreement for the purposes therein contained by signing the foregoing Agreement with the full intent to be legally bound thereby. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public 11