On certification to the Superior Court, Appellate Division.
The opinion of the Court was delivered by Handler, J.
[100 NJ Page 410] In this case, the taxpayer, the Pantasote Company, appealed the 1979 tax assessment of its property in the City of Passaic, New Jersey, to the Passaic County Board of Taxation, which affirmed the assessment. Pantasote appealed the judgment to the Tax Court, and later filed additional appeals pursuant to N.J.S.A. 54:3-21 covering the 1980 and 1981 assessments. For each of the three years, Pantasote raised the issues of valuation and discrimination. The court affirmed the original assessments, ruling that Pantasote failed to show that the assessment of the property was incorrect. 6 N.J. Tax. 34 (Tax Ct.1983). Pantasote appealed to the Appellate Division, which affirmed the judgment substantially for the reasons given by the Tax Court. We granted Pantasote's petition for certification, limiting the appeal to the issue of the Tax Court's use of a presumption in favor of the original tax assessments. 99 N.J. 143 (1984).
Pantasote owns approximately 5.725 acres of industrial property located at 2-52 Jefferson Street in the City of Passaic. The site consists of a complex of connected buildings constructed of steel, concrete and brick devoted to the manufacture of a chemical product. 6 N.J. Tax. at 37. Most of the construction occurred between 1884 and 1916, although a number of improvements, including a two-story office building, have been added since 1951.
The values assessed by Passaic are as follows:
Land $149,400 $149,400 $149,400
Improvements $1,468,500 $1,480,500 $1,529,300
TOTAL $1,617,900 $1,629,900 $1,678,700
The County Board affirmed the 1979 valuation of $1,617,900.
Before the Tax Court, taxpayer's expert, Carl Krell, relied primarily on the capitalization of income approach in an attempt to establish a lower true value. He utilized nine assertedly comparable leases of industrial property in arriving at an economic rent for the property. Taxpayer's expert also employed the market approach to value, introducing statistics relating to the sale of one nearby industrial complex. Krell rejected the use of a cost approach because he found it difficult to depreciate the older property and he did not believe the property should be characterized as special purpose or unique structure, for which the cost approach is the usual valuation method. He also classified the reactors and silos, which were installed specifically for the conversion of the complex to chemical manufacturing, as personal property, thus excluding them from the real property value.
The city's expert and chief assessor, Albert Galik, arrived at his 1979 assessment by adjusting the assessment of the previous year. The 1978 assessment apparently reflected a recently concluded ...