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HOT TOPICS IN ASSESSING

This hot topic discusses the assessment of property tax exemption for a Christian mission and highlights relevant case law and municipal defenses. It explores the requirements for public health, safety, and welfare, as well as the application of the Freeze Act.

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HOT TOPICS IN ASSESSING

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  1. HOT TOPICS IN ASSESSING Kenneth A. Porro, Esq. Chasan Lamparello Mallon & Cappuzzo, PC 300 Lighting Way Secaucus, New Jersey 07094 (201) 348-6000 kporro@chasanlaw.com

  2. Public Health, Safety & Welfare (C of O) - - Tax Exemption Christian Mission John 316 v. Passaic City Tax Court of New Jersey, Appellate Division, Docket No. A-003547-17 (matter on appeal, 3/12/19 oral argument, awaiting Appellate decision) • Plaintiff failed to meet statutory and case law for property tax exemption for the tax year 2017 • The Certificate of Occupancy reflects the required public health, safety & welfare acceptable site condition

  3. Public Health, Safety & Welfare (C of O) - - Tax Exemption • The property as of October 1, 2016 under construction (Thanksgiving & unilateral gathering not condoned by Court) • The prior property use was a commercial warehouse, used for storage and sale of beverages.

  4. Whole Assessment Pantasotev. City of Passaic 100 N.J. 408 (1985) • Look to the municipal assessment as a whole, not land versus improvement separately

  5. MISCELLANEOUS CASE LAWThird Party Standing Dolan v. Borough of Woodcliff Lake Docket No. BER-L-2219-14, 2017 W.L.695392 (N.J. Tax Ct., Feb. 13, 2017 NOT APPROVED FOR PUBLICATION) • A mere difference of opinion … will not lead to a conclusion of invalidity.

  6. Third Party Standing • Deference to knowledge of local conditions • Court should not substitute its own opinion • “Hindsight” does not invalidate Mayor & Council reasonable action

  7. PRE-EXEMPTION State v. C.I.B. International (Little Ferry) • affirms local government’s police power to preserve public health, safety and welfare (See,N.J.S.A. 40:48-2) • In CIB the State issuance of a multi-family “Green Card (min. stds.)” did not in and of itself “preempt” local government

  8. BUNDLE OF RIGHTS Milgram v. Ginaldi 208 WL 2726727 (App. Div. 2008) cert. denied, 197 N.J. 259 (2008) • bundle of rights (view, breeze, access, sunlight, etc.) Harvey Cedars v. Karan 214 N.J. 384 (2013) • shifting of burden of proof in condemnation case to upland property owner that the benefit of the public sand dune project can outweigh constitutional taking compensation • Court sought to avoid “windfall,” but is it really a “windfall” to government?

  9. PW TO FORCE ACTION Gupta, et al. v. Twp. of Weehawken, N.J. Div. of Taxation, etc. NJ Tax Court Docket No. 015796-2014, Hudson County, N.J. • Property owners filed a PW to force Revaluation, because “new” Weehawken development assessments arguably were discriminatory as to older existing Weehawken property assessments • Settlement resulted in a 2018 Weehawken revaluation.

  10. CLEAN HANDS F.M.C. Stores Co. v. Borough of Morris Plains 100 N.J. 418 (1985) • Government must turn on square corners • Cf.Oberhand v. Director, Div. of Taxation, 193 N.J. 558 (2008) doctrine of “manifest injustice” • But see, State Director’s Ratio statutory authority as related to lack of jurisdiction.

  11. MUNICIPAL DEFENSES • Tort Claim Act • Statute of Limitation • arbitrary & capricious (unreasonable) standard • etc. . . . alive and well

  12. FREEZE ACT APPLICATION 160 Chubb Properties, LLC v. Township of Lyndhurst Tax Court of New Jersey, Appellate Division, Docket No. A-004402-18 • The Plaintiff, 160 Chubb Properties, LLC, purchased the subject professional office building located at 160 Chubb Avenue, Lyndhurst, New Jersey, known as Block 231, Lot 3, on December 3, 2013 for $10,300,000 • The transaction was marked as a non-usable NU #19 sale

  13. FREEZE ACT APPLICATION • The building is a 130,191 sq. ft. professional office building • The Plaintiff filed property tax appeals for the 2014 and 2015 tax years • The Plaintiff during its ownership obtained construction permits for the subject property in the approximate amount of $355,100 with renovations during the 2014, 2015 and 2016 tax years, which the Township categorized as the building’s transition years

  14. FREEZE ACT APPLICATION • The property occupancy improved over those years of Plaintiff’s ownership, which is reflected in its November 17, 2016, $20,025,000 sale • On or about November 5, 2015, the parties resolved the 2014 and 2015 tax appeals entering into a Stipulation of Settlement setting the 2014 and 2015 tax years with 2016 Freeze Act • The Plaintiff, new owner sought 2017 Freeze Act application, which was not part of the prior agreement

  15. FREEZE ACT APPLICATION • In fact, paragraph 4 of the Stipulation of Settlement contained a provision for the applicability of N.J.S.A. 54:51A-8 (the “Freeze Act”) for the 2016 tax year • As noted, the property sold the subject property on November 17, 2016, for $20,025,000 • There must have been a contract in place reflecting the meeting of the minds as of October 1, 2016 for the statutory valuation data for 2017 tax year

  16. FREEZE ACT APPLICATION • On July 19, 2017, well after the November 17, 2016 $20,025,000 sale price, the new owner under the old owner’s name filed its motion for application of the Freeze Act to the 2017 tax year • It is interesting to note that Plaintiff, prior owner who was the movant did not even own the property as the date of its motion for Freeze Act “protection” • The Township asserted that this action is contrary to the representation of the Plaintiff’s representative to the Lyndhurst Tax Assessor and in bad faith based upon its November 17, 2016 $20,025,000 sale

  17. FREEZE ACT APPLICATION • Moreover, Plaintiff, the title owner was not properly named at the time of filing its motion • The Township further asserts that the Freeze Act motions are a statutory measure to protect the property owner, not cause a windfall at other municipal property owner’s detriment • Lyndhurst asserts that the trial court erred by ignoring the significant changes in building condition included, but not limited to, building improvements, new tenant occupancy and the November 17, 2016 $20,025,000 sale as well as Plaintiff’s lack of standing

  18. FREEZE ACT APPLICATION • Lyndhurst further asserts that the trial court erred by refusing the Defendant, municipality’s demand for a plenary hearing • The plenary hearing arguably would have demonstrated the significant changes to the property in question and Plaintiff’s representations and admissions to the Lyndhurst Tax Assessor • Moreover, the lack of standing issue could have been additionally considered

  19. FREEZE ACT APPLICATION • Thereby, the $16,250,000 Township assessment for 2017 was reduced by Freeze Act order of the Court to $13,000,000, with the back drop of a July 19, 2016 $20,025,000 sale • This case is under appeal.

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