An article in Wednesday's Washington Post about the dispute over the property tax liability of the Capital Centre in Largo failed to point out that the Arena has been placing $325,000 each year in escrow for taxes pending the outcome of the litigation. Capital Centre's owner, Abe Pollin, said that sum represents a fixed-amount payment due to the Maryland National Capital Park and Planning Commission under a contractual arrangement he believes to be in lieu of property taxes.
The Capital Centre sports arena in Largo may lose its tax-exempt status and be required to pay Prince George's County more than $2 million in current and back property taxes as a result of a ruling issued yesterday by the Maryland Court of Appeals.
The state's highest court apparently resolved a four-year controversy over the arena's tax status by ruling that the county's supervisor of assessments had the sole power to decide whether the $20 million facility should or should not pay taxes.
The county tax assessor, Harry Shipp, decided in 1974 that the centre should pay taxes. He has sent Capital Centre owner Abe Pollin early tax bills ever since. Pollin has not paid the bills. Instead, he has had a team of layers headed by Peter F. O'Malley, an influential leader of the county Democratic Party, fight the assessor's decision in both administrative tax boards and the state courts.
Pollin's attorneys were successful at every step of the process until they reached the Maryland Court of Appeals. There, the seven judges based what could be a multi-million-dollar decision on their interpretation of a simple, one-paragraph clause in the original contract between the Capital Centre's developers and the owners of the land on which the arena was built - the Maryland-National Capital Park and Planning Commission.
The clause stated that the county tax assessor would decide the tax status of the arena and that his decision could not be challenged.
When the assessor, Shipp, ruled that the building should be taxed, Pollin directed his lawyers to file a challenge with county's property tax assessment appeal board.
The planning commision then went to Prince George's County Circuit Court , charging that Pollin had broken his contract.
Circuit Court Judge Samuel Meloy ruled in Pollin's favor, stating that the clause prohibiting the Capital Centre from challenging the assesor's decision was "inimical to our system of justice."
The Court of Appeals ruled yesterday that Meloy should have decided in favor of the planning commision. It also said that Pollin and his lawyers knew what they were getting into when they accepted the original contract.
"Represented by counsel at every stage of the negotiations," the Court of Appeals judges wrote in their decision," the arena fully understood the import of the clause (prohibiting it from challenging the assessor's decision)and the nature of the rights it relinquished, as well as the risks inherent in such a waiver."
The ruling only affects the tax status of the arena. The 60 acres of land surrounding the building, which Pollin rents from the park and planning commision, still enjoys tax-exempt status.
Capital Centre officials were unable to say last night how much they might owe the county in back taxes. Records in the assessor's office indicate that the figure is at least $2 million.
Although the county government was involved in the suit to collect taxes from the Capital Centre, the administration of County Executive Winfield Kelly had taken several steps to make Pollin feel welcome. These steps included leasing the land to Pollin, supplying the arena with access roads and sewage hookups and having county police patrol the building.