January 15, 2008
SECOND ROC JERSEY ASSOCIATES, L.L.C., PLAINTIFF-RESPONDENT,
TOWN OF MORRISTOWN, DEFENDANT-APPELLANT.
On appeal from Tax Court of New Jersey, Docket Nos. 1685-2004 and 3088-2005.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 24, 2007
Before Judges Cuff, Lihotz and Simonelli.
In these matters consolidated for appeal, we review two Tax Court judgments that fixed the assessed value of rental real estate owned by plaintiff Second Roc Jersey Associates, L.L.C., (Second Roc) for the tax years 2004 and 2005. The subject property is located on air rights and is part of Headquarters Plaza located at 21 Speedwell Avenue, Morristown. Headquarters Plaza consists of three office towers, a hotel, a movie theatre, a health club, and a parking garage. The subject property, known as Block 4901, Lot 1.04, is a one-story building, consisting of 86,213 square feet of rentable area and 40,000 square feet of corridors and a concourse that adjoins and connects the other complex facilities. In 2004 and 2005, defendant, Town of Morristown (Morristown) assessed the property at $7,900,000.
Second Roc appealed the tax assessments. Following a trial on August 2, 2006, the Tax Court judge rendered an extensive seventeen-page opinion setting the value of land and improvements at $2,100,000 for each of the two years reviewed. Morristown appeals, arguing that the Tax Court erred by attributing certain expenses to the property that should be deemed common expenses and allocated among the adjoining structures. Morristown maintains that the proper allocation of these expenses would increase the property's profitability and value.
Our scope of review is narrow. Romulus Dev. Corp. v. Twp. of Weehawken, 15 N.J Tax 209, 211 (App. Div. 1995). "'The judges presiding in the Tax Court have special expertise; for that reason their findings will not be disturbed unless they are plainly arbitrary or there is a lack of substantial evidence to support them.'" Ibid. (quoting Glenpointe Assoc. v. Twp. of Teaneck, 241 N.J. Super. 37, 46 (App. Div.), certif. denied, 122 N.J. 391, (1990)); Equitable Life Assurance Soc'y v. Town of Secaucus, 16 N.J. Tax 463, 469 (App. Div. 1996); G & S Co. v. Borough of Eatontown, 6 N.J. Tax 218, 220 (App. Div. 1982).
After consideration of the atypical physical characteristics of the subject property, and relying on credible expert testimony, the trial judge accepted the utilization of the actual expenses incurred when determining the net income generated from the subject property. He then fixed value applying the income capitalization method, which was the method recommended by both experts. We are convinced there is substantial credible evidence in the record to sustain the factual determinations made by the trial judge, and we conclude that he properly applied prevailing legal standards when rendering his determination of the value of the subject property. Morristown's challenges to the judge's findings and conclusions fail to establish a basis for disturbing the judgments. We affirm essentially for the reasons expressed by Judge Kuskin in his comprehensive opinion rendered on October 4, 2006.
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