Camden County Council on Economic Opportunity, Inc. v. City of Camden

CourtNew Jersey Tax Court
DecidedApril 22, 2019
Docket11115-2008
StatusUnpublished

This text of Camden County Council on Economic Opportunity, Inc. v. City of Camden (Camden County Council on Economic Opportunity, Inc. v. City of Camden) is published on Counsel Stack Legal Research, covering New Jersey Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Camden County Council on Economic Opportunity, Inc. v. City of Camden, (N.J. Super. Ct. 2019).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS

___________________________________ CAMDEN COUNTY COUNCIL ) TAX COURT OF NEW JERSEY ON ECONOMIC OPPORTUNITY, INC., ) DOCKET NO. 011115-2008 ) DOCKET NO. 014496-2010 Plaintiff, ) DOCKET NO. 014508-2010 ) DOCKET NO. 012170-2013 v. ) DOCKET NO. 012500-2014 ) DOCKET NO. 011004-2015 CITY OF CAMDEN, ) DOCKET NO. 011145-2016 ) DOCKET NO. 008348-2017 Defendant. ) DOCKET NO. 008361-2018 ___________________________________ )

Decided: April 18, 2019

Albert M. Belmont, III, Esq. (Bochetto & Lentz, PC, attorneys) for plaintiff

Michelle Banks-Spearman, City Attorney, City of Camden for defendant

DeALMEIDA, J.T.C. (t/a)

This is the court's opinion on the parties’ cross-motions for summary judgment in the

above-referenced matters challenging the denial of a local property tax exemption for an apartment

complex in Camden City (City) for tax years 2008 through 2010, and 2013 through 2018. For the

reasons explained more fully below, the court concludes that a portion of the property is exempt

from local property taxes pursuant to N.J.S.A. 54:4-3.6, and a portion of the property is not. The

court, therefore, grants the taxing district's motion for summary judgment in part, and denies the

motion in part, and grants the property owner's cross-motion for summary judgment in part, and

denies the cross-motion in part. Further proceedings are necessary to determine the percentage of

the property that qualifies for the exemption for each tax year and to adjudicate the property

owner's challenge to the amount of the assessments on the property. I. Findings of Fact

This opinion sets forth the court’s findings of fact and conclusions of law on the parties’

cross-motions for summary judgment. The court's findings of fact are based on the certifications

and exhibits submitted on the motions.

In 1964, Congress enacted the Economic Opportunities Act of 1964, 42 U.S.C. §§ 2782 to

2797 (repealed 1981). The statute was designed to combat poverty in low-income communities,

including the City. The legislation authorized local public and private non-profit groups called

community service organizations to carry out community action programs created by the act.

In 1966, plaintiff Camden County Council on Economic Opportunity, Inc. (CCCEO) was

incorporated under New Jersey law as a non-profit, community service organization in response

to the federal legislation. In a separate action concerning other parcels in the City owned by

CCCEO, the court determined that the organization was organized exclusively for charitable

purposes. The City admits the court's findings on that point are binding here. CCCEO's by-laws

provide that the organization will fulfill its mission by, among other things, "[e]nsuring that

Camden County residents gain and maintain accessibility to adequate sanitary and safe housing

[with] special emphasis on the construction and[/]or renovation of decent, affordable housing that

will increase housing ownership and rental opportunities for low- and moderate-income

families[.]" Approximately eighty percent of CCCEO’s funding comes from State and federal

grants. The remaining funding is obtained from private foundations and individuals.

In 2002, CCCEO purchased an eighteen-building, 132-unit, garden-apartment complex,

the Sheridan Apartments, in the City for $1.05 million. The property is comprised of three parcels

designated by the municipal tax assessor as Block 445, Lot 1, Block 449, Lot 1, and Block 446,

Lot 3 (the subject property). For tax years 2008 through 2010, the assessor placed an aggregate

2 assessment of $1,200,000 on the three parcels. For tax years 2013 through 2018, the assessor

raised the aggregate assessment to $2,704,100. 1

The court's findings of fact concern October 1, 2007, the operative date for tax year 2008.

CCCEO's use of the subject property has been relatively consistent since that time. The findings

of fact, therefore, will be determinative of the subject property's eligibility for an exemption for

each tax year at issue. As of October 1, 2007, twenty-five units at the subject property were used

for transitional housing for people who were homeless or leaving a shelter. CCCEO provided

tenants in those units supportive services, including mentoring, training, employment

opportunities, and healthcare. Tenants in transitional housing were required to attend the programs

and pay a fee equal to one third of their monthly income, but not more than $300, which served as

rent. These tenants remained in the program for up to eighteen months. Transitional housing units

were not concentrated in any building on the subject property. Nor were particular units reserved

for the program, which was also operated by CCCEO at other buildings it owns. The City concedes

that if the twenty-five units used for transitional housing were in a single building with no market

rate rental units, that building likely would qualify for an exemption.

1 CCCEO intended to apply for low-income tax credits from the New Jersey Housing Mortgage Finance Agency that it could sell to raise funds to renovate the subject property for rental to low- income tenants. As part of the application process, CCCEO was required to enter into a payment in lieu of tax (PILOT) agreement with the City. An agreement requiring a PILOT payment of approximately $105,100 per year for the subject property was approved by the City's governing body on June 13, 2002. A financial agreement pursuant to the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 to -22, was executed on the same day between Sheridan Urban Renewal Associates, LP (Sheridan), of which CCCEO is a general partner, and the City, naming Sheridan as the redeveloper of the subject property. In the matters before the court, the parties initially disputed whether the financial agreement and PILOT agreement ever took effect and, if so, whether they remain in effect. CCCEO subsequently informed the court that it does not claim an exemption for the tax years in question based on the agreements. In light of that development, and because this court lacks jurisdiction over any contractual dispute the parties may have with respect to the PILOT and financial agreements, see McMahon v. City of Newark, 195 N.J. 526 (2008), the court makes no findings of fact or conclusions of law regarding the agreements.

3 The remaining 100 apartments were available to anyone to rent. There was no income-

related restriction on who may rent those units. Thus, there was no income cap in place.

Theoretically, a high-income tenant could rent a unit at the subject property. This was unlikely,

however, as it is not disputed that the subject property serves a low-income community.

Tenants not in the transitional housing program were required to execute a written lease

and produce a security deposit of one month’s rent. Each rental unit was separately metered and

tenants were responsible for the cost of utilities. CCCEO notes that most tenants participated in

an energy assistance program that covered the cost of utilities with public funds. That program,

however, was available to any member of the public who qualified and was not funded by CCCEO.

Leases for the unrestricted units permitted CCCEO to evict tenants who did not pay rent. The

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Camden County Council on Economic Opportunity, Inc. v. City of Camden, Counsel Stack Legal Research, https://law.counselstack.com/opinion/camden-county-council-on-economic-opportunity-inc-v-city-of-camden-njtaxct-2019.