PLAZA TWENTY THREE STATION LLC VS. TOWNSHIP OF PEQUANNOCK (TAX COURT OF NEW JERSEY)

CourtNew Jersey Superior Court Appellate Division
DecidedJanuary 28, 2020
DocketA-2936-18T3
StatusUnpublished

This text of PLAZA TWENTY THREE STATION LLC VS. TOWNSHIP OF PEQUANNOCK (TAX COURT OF NEW JERSEY) (PLAZA TWENTY THREE STATION LLC VS. TOWNSHIP OF PEQUANNOCK (TAX COURT OF NEW JERSEY)) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PLAZA TWENTY THREE STATION LLC VS. TOWNSHIP OF PEQUANNOCK (TAX COURT OF NEW JERSEY), (N.J. Ct. App. 2020).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2936-18T3

PLAZA TWENTY THREE STATION LLC,

Plaintiff-Respondent,

v.

TOWNSHIP OF PEQUANNOCK,

Defendant-Appellant. _____________________________

Argued January 8, 2020 - Decided January 28, 2020

Before Judges Fuentes, Haas and Enright.

On appeal from the Tax Court of New Jersey, Docket No. 13577-2017.

Robert H. Oostdyk argued the cause for appellant (Murphy Mc Keon PC, attorneys; Robert H. Oostdyk, of counsel; James Matthew Parisi, on the briefs).

Michael D. Benak argued the cause for respondent (Mc Carter & English LLP, attorneys; Daniel Peter Zazzali, of counsel and on the brief; Michael D. Benak and Priscilla Mieir, on the brief).

PER CURIAM Defendant Township of Pequannock (Township) appeals from the Tax

Court's February 15, 2019 order granting plaintiff Plaza Twenty Three Station

LLC's motion for summary judgment, and invalidating an added assessment the

Township imposed on plaintiff's property for the 2017 tax year. We affirm.

The facts, as derived from the evidence submitted by the parties in support

of, and in opposition to, the summary judgment motion, are fully detailed in

Judge Vito L. Bianco's well-reasoned written amplification of his findings of

fact and conclusions of law pursuant to Rule 2:5-1(b). Therefore, we recite only

the most salient facts from that decision and, like Judge Bianco, view them in

the light most favorable to plaintiff, the non-moving party. Polzo v. Cty. of

Essex, 209 N.J. 51, 56 n.1 (2012) (citing Brill v. Guardian Life Ins. Co. of Am.,

142 N.J. 520, 523 (1995)).

In February 2017, plaintiff purchased a large shopping center (the

property)1 in the Township for $51,050,000. Prior to this purchase, the

Township had assessed the property in 2016 for $24,446,100. This assessment

had remained unchanged since the last reevaluation of the property in 2011 for

the 2012 tax year.

1 The property is approximately 18.76 acres in size, and the shopping center itself is approximately 162,000 square feet. A-2936-18T3 2 The shopping center has a number of commercial tenants, including Stop

and Shop, PNC Bank, Jersey Mike's, Visionworks, and Smashburger. In 2014,

there were two permits issued for construction projects on the property. The

first was issued on January 2, 2014, and closed on May 1, 2014. This permit

was described as an alteration and allowed for floodproofing and a tenant fit-up

for Stop and Shop. The total cost of construction work was listed as $2,899,500.

The second permit was issued on February 19, 2014, and completed on May 1,

2014. The permit described the construction work as an alteration to PNC Bank.

The total cost of the construction work was listed as $52,000.

In 2016, two more permits were issued for construction projects on the

property. One permit was issued on February 16, 2016, and completed on April

26, 2016. The permit described the construction work as an alteration and tenant

fit-up for Jersey Mike's. The total cost of the construction work was listed as

$123,910.

The second permit was issued on October 21, 2016, and completed on

January 4, 2017. This permit described the construction work as an alteration

and tenant fit-up for Visionworks. The total cost of the construction work was

listed as $146,700. The construction work included building (construction of

two bathrooms, a retail space, a pre-test area, a lens preparation area, and a new

A-2936-18T3 3 ceiling); plumbing (bathroom fixtures, drinking fountains, water heater, gas

piping, and HVAC); and electric improvements (lighting, service upgrade, and

furnace/air conditioning).

In 2017, a permit for a project at Smashburger was issued on March 17,

2017, and closed on May 18, 2017. The permit described the construction work

as an alteration and tenant fit-up for Smashburger. The total cost of the

construction work was listed as $315,000. The construction included building

(new tenant separation assembly, vestibule, two dining rooms, two kitchens, two

bathrooms, and walk-in refrigeration units); plumbing (bathroom fixtures,

kitchen fixtures, a water heater, and gas piping); electrical (lighting, receptacles,

switches, and a sprinkler head system); and fire improvements (kitchen hood

exhaust system and Ansul system).

In his deposition, the Township's tax assessor, Robert Sweeney, testified

he was responsible for making changes to the municipality's assessment roll,

such as imposing an added assessment or fixing a clerical error. He explained

for "something simple like replacing a furnace or hot water heater, I wouldn 't

change [an] assessment[,]" but he would "if it's more substantial [like] either

[an] addition[] [or] renovation." However, where there was a "big discrepancy,"

A-2936-18T3 4 the Township would be required to file a tax appeal, and he would not attempt

to impose an added assessment.

Sweeney testified that he did not change the property's 2012 assessment

value prior to 2017 "because the property had a history of flooding issues, [and]

there were the prior appeals with the property with the prior owner." Sweeney

stated that although he was aware that the property's market value changed

between 2011 and 2016, he did not change the assessment because "at that time

I wasn't sure. In retrospect, I would say, yes. But during those years, I wasn't

sure."

However, after plaintiff purchased the property in February 2017,

Sweeney imposed a twelve-month added assessment in the amount of

$20,500,000. This raised the total assessment for 2017 from the original

assessment of $24,446,100, to a total assessment of $44,946,100.

Although Sweeney alleged he prepared an income-based approach in

determining the amount of the added assessment, he admitted he had no

supporting documentation in his file to support this claim. Sweeney did not

submit a Chapter 91 information request as permitted by N.J.S.A. 54:4-34 to any

of plaintiff's tenants and, therefore, had no information concerning their

A-2936-18T3 5 business income. Sweeney also did not inspect any of the stores before almost

doubling the amount of the assessment.

Instead, Sweeney testified that in determining to impose an added

assessment in 2017, he reviewed the construction permits from Stop and Shop,

PNC Bank, Jersey Mike's, Visionworks, and Smashburger. However, as

plaintiff pointed out in its motion for summary judgment, and as Judge Bianco

would later correctly conclude, the imposition of an added assessment is limited

to a specific timeframe.

By way of background, N.J.S.A. 54:4-63.2 provides that added

assessments may be made when "any building or other structure . . . has been

erected, added to or improved after October 1" of the pretax year, which is the

date of the original assessment for the tax year, and completed before January 1

of the tax year. Further, N.J.S.A. 54:4-63.3 allows added assessments to be

imposed when "any building or other structure . . . has been erected, added to or

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PLAZA TWENTY THREE STATION LLC VS. TOWNSHIP OF PEQUANNOCK (TAX COURT OF NEW JERSEY), Counsel Stack Legal Research, https://law.counselstack.com/opinion/plaza-twenty-three-station-llc-vs-township-of-pequannock-tax-court-of-new-njsuperctappdiv-2020.