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Pompton Lakes Senior Citizens Housing Corp. v. Borough of Pompton Lakes

February 25, 1997


The opinion of the court was delivered by: Kuskin


In this 1995 local property tax appeal, the plaintiff Pompton Lakes Senior Citizens Housing Corp. ("Housing Corp.") seeks an exemption from taxation, under the "charitable purposes" provisions of N.J.S.A. 54:4-3.6, for a residence occupied by the superintendent of a senior citizens housing complex ("Housing Complex"). The residence and Housing Complex are both owned by the plaintiff, but are located on separate, adjoining tax lots. The Housing Complex enjoys an exemption from local property taxation pursuant to N.J.S.A. 55:14J-30 and N.J.S.A. 55:16-18, and, in accordance with the requirements of such statutes, the Housing Complex makes payments in lieu of taxes. The Housing Complex has not received, or even applied for, a charitable exemption under N.J.S.A. 54:4-3.6. The relevant portions of this statute provide as follows:

The following property shall be exempt from taxation under this chapter: ... all buildings actually and exclusively used in the work of associations and corporations organized exclusively for ... charitable purposes; ... the land whereon any of the buildings hereinbefore mentioned are erected, and which may be necessary for the fair enjoyment thereof, and which is devoted to the purposes above mentioned and to no other purpose and does not exceed five acres in extent; ... provided in case of all the foregoing, the buildings, or the lands on which they stand, or the associations, corporations or institutions using and occupying them as aforesaid, are not conducted for profit, ... The foregoing exemption shall apply only where the association, corporation or institution claiming the exemption owns the property in question and is incorporated or organized under the laws of this State and authorized to carry out the purposes on account of which the exemption is claimed....

The parties have filed cross-motions for summary judgment. I grant the defendant's motion and deny the taxpayer's motion because, under the provisions of R. 4:46-2 and the standards for consideration of summary judgment motions set forth in Brill v. Guardian Life Insurance Co. of America, 142 N.J. 520, 523 (1995), I find that (i) there is no genuine issue with respect to a material fact; and (ii) the defendant municipality is entitled to judgment as a matter of law.


The Housing Corp. was formed pursuant to Title 15 of the New Jersey Statutes, N.J.S.A. 15:1-1 through 15:19-6 (replaced in 1983 by Title 15A, N.J.S.A. 15A: 1-1 through 15A:16-2). The Certificate of Incorporation, dated December 15, 1972, defines the purposes of the corporation as follows:

(a) To plan, sponsor, construct, operate, maintain, rehabilitate, alter, convert, and improve housing and housing projects for the Senior citizens of Pompton Lakes on a non-profit basis.

(b) To act as sponsors for housing and related programs pursuant to applicable provisions of N.J.S.A. 55:14J-1 et. seq. (The New Jersey Housing Finance Agency Law of 1967), N.J.S.A. 55:16-1 et. seq. and all other provisions of applicable state and federal laws.

The certificate then sets forth certain powers of the corporation, pursuant to the two stated purposes, concluding with the following paragraph (h):

(h) To have and exercise all other powers necessary or convenient to effect any or all of the purposes for which the corporation is organized. Notwithstanding anything herein to the contrary, the corporation shall exercise only such powers as are in furtherance of the exempt purposes of organizations set forth in Section 501 (c) of the Internal Revenue Code and its Regulations as they now exist or as they may be hereafter amended from time to time.

This Certificate of Incorporation satisfied the requirements of the Limited-Dividend Nonprofit Housing Corporations or Associations Law, N.J.S.A. 55:16-1 to -22 *fn1 N.J.S.A. 55:16-18 (now N.J.S.A. 40A:20-12) provided in relevant part:

When the governing body of any municipality in which a project of a housing corporation or housing association is or will be located, by resolution finds that the project is or will be an improvement made for the purposes of the clearance, replanning, development, or redevelopment of any blighted area (as defined in any law of this State) within such municipality, or for any of such purposes, then such project and improvement shall be exempt from all property taxation; provided, that in lieu of taxes the housing corporation or housing association owning said project shall make to the municipality payment of an annual service charge for municipal services supplied to said project, in such amount, not exceeding the tax on the property on which the project is located for the year in which the undertaking of said project is commenced or 15% of the annual gross shelter rents obtained from the project, whichever is the greater, as may be agreed to by the municipality and the housing corporation or housing association and approved by the authority.

On October 27, 1976, the Pompton Lakes governing body adopted a Resolution as contemplated by N.J.S.A. 55:16-18 containing a finding that the Housing Complex "will be an improvement made for the purpose of assisting the clearance, replanning, development of blighted areas in this municipality," and providing an exemption from local property taxation in exchange for payment of an annual service charge in lieu of taxes.

Construction of the Housing Complex occurred in 1978 as contemplated by such Resolution and N.J.S.A. 55:16-18, and was financed by the then New Jersey Housing Finance Agency ("NJHFA") pursuant to N.J.S.A. 55:14J-1 to -58. *fn2 N.J.S.A. 55:14J-30 (now N.J.S.A. 55:14K-37) provided that a municipality, in which a housing project financed by the NJHFA [now the New Jersey Housing and Mortgage Finance Agency ("NJHMFA")]) was located, may, by ordinance or resolution as appropriate, provide that such project shall be exempt from real property taxation if the housing sponsor enters into an agreement with the municipality for payments to the municipality in lieu of taxes for municipal services.

As of October 1, 1994, the relevant assessing date in this matter, the Housing Complex contained 100 apartment units rented to low and very low income senior citizens. The Complex had, as of such date and prior thereto, a full-time resident superintendent. The superintendent's responsibilities included supervision of all custodial, maintenance and grounds workers as well as any outside laborers. The Complex's alarm systems, including emergency alarms in each of the apartments, were wired to the superintendent's residence. The superintendent also ...

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