The opinion of the court was delivered by: Dougherty
The assessor set both the 1994 and 1995 assessments at land $4,649,000, improvements, $10,235,100, for the same total of $14,884,100. When the 1993 Base Year judgment was entered direct appeals for the 1994 and 1995 Tax Years were pending in the Tax Court. N.J.S.A. 54:3-21. The Freeze Act has been applied to the 1994 Freeze Year. AVR Realty Co., c/o Rose v. Cranford Tp., 294 N.J. Super. 294 (App. Div. 1996).
The Township of Cranford (Cranford) opposes Taxpayer's application for the freeze, arguing that a change in value of the subject property occurred after October 1, 1992 (the valuation date for the Base Year assessment) and before October 1, 1994 (the valuation date for the 1995 Freeze Year assessment). Cranford made the identical argument in opposition to the Taxpayer's 1994 Freeze Act application. The change in value is said to have resulted from: (i) a change in use of the motel portion of the improvements from, rooms leased on a daily or weekly basis, to senior citizen assisted living quarters, leased on an annual basis; and (ii) the construction of additional improvements. The Appellate Division concluded in the 1994 matter:
We have no doubt that a change in use, to the extent it may significantly affect the capitalization method of assessment, the method here used, may effect a substantial and meaningful change in value. So may a substantial addition to the improvements. Nevertheless, the [assessor's] certification failed to show that these use and structural changes effected a change of value as of October 1, 1993.
[AVR Realty Co., supra, 294 N.J. Super. at 301.]
The assessor's certification filed in opposition to Taxpayer's 1995 application asserts that: (i) Taxpayer converted its 85,000 square foot, 180 room motel use to senior assisted living quarters after October 1, 1992; (ii) Taxpayer's application for a building permit estimated a cost of $1,102,325 to complete renovations of the existing motel structure and construction of the new building (8600 square feet of administrative offices, reception, dining and lounge areas); and (iii) construction of the addition and renovations was concluded on or before November 4, 1993, when a temporary certificate of occupancy was issued. He further certifies that Taxpayer's response to a request for income and expense information, made pursuant to N.J.S.A. 54:4-34 for Tax Year 1995, indicated a net operating income allocated to the senior quarters as of October 1, 1994, of $1,102,000. The $1,102,000 net does not, he certifies, include income from the banquet facility which continued to produce income in calendar year 1994. The assessor compares the senior quarters' net operating income with the net operating income of $761,960 from the motel and banquet facilities, found in the 1993 Base Year trial. The $340,040 increase, (which would be even greater if the 1994 banquet income were deducted from the motel figures), Cranford argues, is sufficient to establish a prima facie change in value. Cranford thus seeks a plenary hearing on valuation. It is, Cranford argues, at that hearing that evidence of true value on October 1, 1994, would be presented by both parties. In effect, that hearing would be no different from any other valuation trial, except that Cranford would carry the burden of proof as to valuation while that burden generally falls upon the taxpayer, as plaintiff.
The certification of Cranford's appraisal expert (identical to that filed in the 1994 tax appeal) opines that an increase of $340,040 in net operating income translates into an increase in true value for Tax Year 1995. The expert selects a range of interest rates to be applied to net operating income under the Income Capitalization approach to value. The low rate is 11.25%; the high rate is 12.25%. No explanation is provided in the certification for the selected rates. Nor has an allocation of the seniors quarters income among shelter, personal care and meals components, been undertaken at this stage. The "opinion of value increase" is rough, at best.
Applying each of the high and low rates to the $1,102,000 net operating income from 1994's seniors operations indicates, the expert continues, a true value range as of October 1, 1994 of $9,000,000 to $9,800,000. The 1993 Base Year judgment was based upon the determination that the true value of the subject as of October 1, 1992 was $11,774,000. That value was composed of a value for the office use of $5,234,000 and a value for the motel use of $6,540,000. Because Cranford's average ratio for Tax Year 1993 was 94.87%, the judgment provided for an assessable value of $11,170,000. Cranford argues that the indicated change in value from the motel use alone is meaningful and substantial. It did not, however, assess that increase for either of Tax Years 1994 or 1995.
Taxpayer argues that Cranford has failed to meet its burden of proving a substantial and meaningful change in the true value, necessary to successfully oppose the motion. Taxpayer reads 2nd Roc-Jersey Assocs. v. Morristown Town, 11 N.J. Tax 45 (Tax 1990), to require Cranford to prove value on the return date of the Freeze Act motion. Because Cranford offered no evidence of true value as of October 11 1994, other than the admittedly rough estimate in the expert's certification, Taxpayer argues the motion must be granted. Taxpayer further asserts that the assessor's failure to have increased the assessment for Tax Year 1995, above the 1992, 1993, 1994 assessments, or to have levied an Added, or Omitted/Added Assessment to take into account the purported increase in true value of improvements from the renovations and addition completed in November 1993, leads here, as it did in the 1994 Freeze application to:
the clear inference ... that in making the ...  assessment as of ... [October 1, 1994], the assessor did not take into account any change in value at all, simply having assessed the property in exactly the same amount as for the ... [three] prior years ... The inference ... thus [being] inescapable that the ...  assessment was not made on the basis of a change in value occurring after the prior assessing date ... [Leading to the further inference that as for 1994 no change in:value occurred for Tax Year 1995 and] that the opposition to the taxpayer's  Freeze Act motion was simply an after-the-fact attempt to justify the original [$14,884,100] assessment which the Tax Court had adJudged to have been too high.
[AVR Realty Co., supra, 294 N.J. Super at 302.]
For the reasons below, it is held that Cranford is foreclosed from asserting a claim for an increase in the assessment of the subject solely by way of its opposition to Taxpayer's Freeze Act Motion. Had the assessor levied an increased assessment on the January 10, 1995 assessment list, as he was free to do, Cranford might now defend that increased assessment against Taxpayer's Freeze Act Motion. Alternatively, Cranford might have filed a petition of appeal with County Board of Taxation or a direct appeal with the Tax Court, by the April 1, 1995 filing deadline, disputing the $14,884,100 assessment on the basis of the change in value, or a counterclaim in response to Taxpayer's 1995 direct appeal, alleging the increased value from the change in use and the addition. In any of such cases Taxpayer would be on notice and in a position to proceed under the statutes to now meet Cranford's claims. In any of such cases the court would have jurisdiction of the issue. Cranford may not, however, ignore the change in use and construction of improvements asserted to result in a value increase, and await the filing of Taxpayer's Freeze Act Motion to first affirmatively pursue the increase for Tax Year 1995. The Freeze Act does not extend the statutory deadlines for making or appealing assessments. Failure to adhere to those deadlines is a fatal jurisdictional defect.
The scheme for the assessment and taxation of real property in New Jersey is designed to meet constitutional requirements of due process, to which taxpayers are entitled, McKesson Corp. v. Div, of Alcoholic Beverages, 496 U.S. 18, 110 S. Ct. 2238, 110 L. Ed. 2d 17 (1990), N.Y. Susquehanna and W.R.R. v. Vermeulen, 44 N.J. 491 (1965), as well as the need of local government for an orderly, predictable revenue stream. F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 424-25 (1985)'. The Freeze Act must be read in the context of that scheme.
N.J.S.A. 54:4-23 requires a municipal assessor to determine the "full and fair value" of each parcel of real property within the taxing district as of October 1st of each pretax year. ...