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Owners Maintenance Corp. v. Borough of Fort Lee

2005 WL 3078223 (N.J. Super. App. Div. 2005) (Unpublished)

TAXATION; ZONING—When the effective date of a zoning change is contingent upon the happening of an event and that event happens after a rollback date, the economic effect of the change can be used in setting a new valuation even if the ordinance, itself, was passed before the rollback date.

In 2001, the assessment for a largely undeveloped parcel of land was doubled. The owner sought relief from the increase in the Tax Court. In 1987, the municipality agreed to make zoning changes to allow the owner to build residences and office buildings on the property. In 1994 and 1995, the municipality “adopted ordinances creating a Plan[ned] Unit Development zone for the property. At the same time as [this] ordinance was adopted,” the municipality adopted a further ordinance vacating certain public streets. The effective date of this further ordinance was upon the completion of a traffic signal improvement and upon the dedication of a particular road as a public street and the acceptance of that road by the municipality. In 2000, those conditions were met, and in February, 2001, the assessor increased the assessment. Shortly thereafter, the county tax board directed the municipality “to rollback all the assessments that were changed in 2001” to the assessments that were in effect on October 1, 1999. There were certain exceptions, such as “added and omitted assessments ... zoning changes and subdivisions,” etc. Based on this global command by the Tax Board to rollback all of the assessments, the property owner argued that its property’s assessment should have been rolled back as well. The Tax Court disagreed, holding that the Tax Board’s order was not applicable to this particular property because the reassessment was based on the zoning change that became effective when the owner dedicated the required road to the municipality and it was accepted. According to the Tax Court and the Appellate Division, the zoning change, although adopted in 1994 and 1995, did not become effective until 2000, a date after the October 1, 1999 rollback date. Consequently, according to each court, the dedication of the roadway by the owner “made the property ready for commercial development, thereby substantially increasing its value.” That increase came after the rollback date. “[A]djusting an assessment [of a taxed property] for legitimate reasons is an appropriate exercise of the assessor’s statutory obligation and is not arbitrary or discriminatory.” In rejecting the property owner’s contention that the zoning change occurred in 1994 and 1995, the Appellate Division, although disagreeing with the factual contention, stated that if that “were the case ... [the property owner] obtained a benefit during the intervening years to which it was not entitled. There is no law prohibiting an assessor from correcting past mistakes by a proper increase in the assessment of a property.”


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