Opinion
Docket No. 010009-2008 Docket No. 017491-2011
06-18-2014
Re: Chai Lifeline, Inc. v. Township of Mahwah
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
JOSEPH M. ANDRESINI
JUDGE
(201) 996-8029
Marc Leibman, Esq. Steven Muhlstock, Esq. Dear Counsel:
This letter serves as the court's opinion with respect to the parties' cross-motions for summary judgment. Plaintiff, Chai Lifeline, Inc. ("Plaintiff") filed a complaint with the Tax Court appealing the Bergen County Board of Taxation ("County Board") Judgment for property located at 1058 Ramapo Valley Road, designated as Block 25, Lot 28 (the "Subject property"). Plaintiff made a motion for summary judgment, contending there were no material facts in dispute to prevent it from being granted an exemption from property taxation by way of N.J.S.A. 54:4-3.6. The Township of Mahwah ("Defendant"), also made a motion for summary judgment. However, Defendant believed no material facts existed under which Plaintiff would be entitled to a property tax exemption under N.J.S.A. 54:4-3.6. For the reasons set forth below, summary judgment is granted in favor of Plaintiff and Defendant's cross-motion is denied. *
Procedural History and Findings of Fact
In this matter, Plaintiff seeks property tax relief from the Defendant. Plaintiff argues the Subject property is exempt from taxation under N.J.S.A. 54:4-3.6. The Subject is assessed as follows:
Land $502,600.00On or about October 11, 2007, Plaintiff requested, by letter, the Tax Assessor of Mahwah grant the Subject tax exempt status. Plaintiff alleges that the Tax Assessor ignored this letter, so Plaintiff made another request for tax exempt status, by letter, on or about October 22, 2010. Ignored again, Plaintiff filed a 2008 County Board Petition. On July, 11, 2008 the County Board affirmed the assessment. On or about October 22, 2010, Plaintiff again requested, by letter, tax exempt status from the Assessor. Plaintiff alleges this request was ignored. In his certification the Tax Assessor does not confirm or deny that he ignored Plaintiff's three letters seeking an exemption. Plaintiff made timely application to the County Board, which, on August 24, 2011, affirmed the assessment without prejudice. Plaintiff then appealed to the Tax Court on October 13, 2011.
Building $357,600.00
Total $860,200.00
Plaintiff filed a motion for summary judgment on March 2, 2012, stating the Subject is entitled to tax exemption, because it is used for a charitable purpose. On April 11, 2012, Defendant made a cross-motion for summary judgment arguing the Subject, as used by Plaintiff, is not entitled to an exemption. Moreover, Defendant asserted that even if the property is tax exempt Plaintiff is not entitled to tax exempt status for 2008-2010, because Plaintiff did not make a timely application for tax exempt status in those years.
Plaintiff is a non-profit organization whose stated mission is to:
Restore the light of childhood to children whose innocence ended when life-threatening or lifelong illness was diagnosed.Plaintiff offers programs in furtherance of its mission in all 50 states, Israel, the United Kingdom, and Canada. Plaintiff's mission goes beyond just support for those children with life threatening illnesses, because it includes their siblings and parents. According to the Director of Communications for Chai Lifeline, Melanie Kwestel, "parents and siblings suffer from the unrelenting stress of living with the uncertainty of illness and of caring for a medically fragile child." (Kwestel Certification ¶ 8).
Through programs that address the emotional, social, and financial needs of seriously ill children, their families, and communities, Chai Lifeline restores normalcy to family life, and better enables families to withstand the crises and challenges of serious pediatric illness.
[Pl.'s Mot. Summ. J.1.]
Craig and Pamela Goldman donated the Subject property to Plaintiff on July 26, 2007. The property comprises 4.58 acres and is now known as the "Pamela and Craig Goldman River Retreat." The Subject is improved with a single family five bedroom home, an in-ground swimming pool, and a historic mill. Between July 26, 2007 and October 1, 2007, the Subject was used primarily for staff meetings and selection of clients. In September 2007, a caretaker was hired to prepare the property to be used as a retreat. The Subject was then used as a retreat on multiple occasions in both 2011 and 2012. The retreat is used exclusively by families. According to Plaintiff, the parents and siblings of terminally ill children visit the retreat to obtain respite from their grief and the stress of hospitals, treatments, and therapies.
In support of its motion for summary judgment Plaintiff provided: (1) Certification from Chai Lifeline's Executive Director, Abraham Cohen; (2) Chai Lifeline, Inc. Bylaws; (3) Letter sent by Plaintiff's former counsel to Defendant requesting the tax exemption; (4) 2008 decision of the County Board denying Plaintiff's tax exemption; (5) Letter sent by Plaintiff's current counsel to Defendant requesting tax exemption; (6) 2011 decision of the County Board denying Plaintiff's tax exemption; (7) Plaintiff's complaint against Mahwah Zoning Board which contains a description of the charitable purpose Plaintiff uses the property for. Information provided by Plaintiff indicates the Subject is utilized to help families who have a child or children with life threatening or a very serious illness. Plaintiff allows those families in crisis to stay at the property for a short time to get away from their tragic situation. The property is used by only one family at a time. Plaintiff does not charge any family to use the Subject. Plaintiff absorbs all costs of maintaining the property through donations.
In support of its motion for summary judgment Defendant relies extensively on certification from the Tax Assessor for the Township of Mahwah who determined Plaintiff is not entitled to a tax exemption on the Subject. The Assessor states that even though Plaintiff filed an application for tax exempt status on October 9, 2007, he was not given any information that showed the Subject was used for a tax exempt purpose prior to October 1, 2007. Next, the Assessor notes that no applications, County Tax Board Petitions, or Tax Court complaints were filed for tax years 2009 or 2010. Specifically, the Assessor certifies he has not received any of the following: (1) any form or application from third parties to use the Subject; (2) any documentation on how Plaintiff chooses persons to use the Subject; (3) list of users, dates the Subject was used, or calendar showing how, when and how long the Subject was used; or (4) any representation of how the property is maintained and the costs associated with that maintenance.
In addition to those asserted obligations, the Assessor contends he could not find that the property was tax exempt, because Plaintiff does not provide any services to people at the property. He believed the betterment of users of the property is speculative and akin to people feeling relaxed when on vacation or visiting a hotel. Defendant further maintains that the Subject could not be tax-exempt, because the asserted use does not relieve the government from a public burden nor does it include services or provide long-term help.
Conclusions of Law
I. Summary Judgment Standard
Current New Jersey Court Rules allow either party to move for summary judgment before the case is tried. The court should grant the motion if, from the pleadings, depositions, answers, admissions, and affidavits, it appears that there is "no genuine issue as to any material fact challenged." R. 4:46-2. This court, when presented with a motion for summary judgment, will grant the same where "there is no genuine issue as to any material fact . . . and . . . the moving party is entitled to judgment or order as a matter of law." Id. It is the movant who bears the "burden to exclude any reasonable doubt as to the existence of any genuine issue of material fact" regarding the claims asserted. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 74 (1954) (citations omitted). A genuine issue of material fact exists "only if, considering the burden of persuasion at trial, the evidence submitted by the parties, on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c).
In making a determination as to whether there is a genuine issue of material fact, for summary judgment purposes, the trial court must ascertain "what reasonable conclusions a rational jury can draw from the evidence[.]" Brill v. Guardian Life Insurance Co., 142 N.J. 520, 535 (1995).
[T]he court must accept as true all the evidence which supports the position of the party defending against the motion and must accord that party the benefit of all legitimate inferences which can be deduced therefrom. Thus, if reasonable minds could differ, the motion must be denied.
[Pressler, Current N.J. Court Rules, comment 1 on R. 4:40-2 (2014).]
"[T]he essence of the inquiry. . . [is] 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Brill, supra, 142 N.J. at 536 (citation omitted). The trial court is required to consider "whether the competent evidential materials presented, are sufficient to permit a rational fact finder to resolve the alleged disputed issue in favor of the non-moving party." Id. at 540. Accordingly, "a non-moving party cannot defeat a motion for summary judgment merely by pointing to any fact in dispute." Ibid. Instead, the non-moving party has the burden "to make an affirmative demonstration, where the means are at hand to do so, that the facts are not as the movant alleges." Spiotta v. William H. Wilson, Inc., 72 N.J. Super. 572, 581 (App. Div. 1962), certif. denied, 37 N.J. 229 (1962).
Even though the allegations of the pleadings may raise an issue of fact, if other papers show that, in fact, there is no real material issue, then summary judgment can be granted. Id. Thus, "bare conclusions in the pleadings, without factual support in tendered affidavits, will not defeat a meritorious application for summary judgment." U.S. Pipe & Foundry Co. v. Am. Arbitration Ass'n, 67 N.J. Super. 384, 399-400 (App. Div. 1961) (citation omitted). Furthermore, disputed issues, which are of an insubstantial nature, cannot overcome a motion for summary judgment. See Brill, supra, 142 N.J. at 529. Therefore, "when the evidence 'is so one-sided that one party must prevail as a matter of law,' the trial court should not hesitate to grant summary judgment." Id. at 540 (citation omitted).
To survive summary judgment, the non-moving party must provide more than a mere scintilla of evidence in support of its position. There must exist evidence from which the jury could reasonably find for the non-moving party. See Brill, supra, 142 N.J. at 532-534. Accordingly, the opposing party may offer facts which are substantial or material in opposing the motion, in order to defeat the grant of summary judgment. Judson, supra, 17 N.J. at 75. A party may defeat a motion for summary judgment by demonstrating that the evidential material relied upon by the moving party, considered in light of the applicable burden of proof, raises sufficient credibility issues to permit a rational fact-finder to resolve the alleged disputed issue in favor of the non-moving party." D'Amato v. D'Amato, 305 N.J. Super. 109, 114 (App. Div. 1997).
Herein, both parties have filed motions for summary judgment. "Cross motions do not warrant granting summary judgment unless one of the moving parties is entitled to judgment as a matter of law. Cross motions for summary judgment do not preclude the existence of issues of fact." O'Keefe v. Snyder, 83 N.J. 478, 487 (1980)(citations omitted). Nevertheless, the court finds this matter is ripe for summary judgment. No genuine issue of material fact exists in the record to preclude summary judgment, and one party is entitled to judgment as a matter of law.
II. Property Tax-Exemption
To begin, there are some fundamental principles that apply to property tax-exemption:
Statutory exemptions from taxation should be ''strictly construed against those invoking the exemption.'' Hunterdon Med. Cent. v. Twp. of Readington, 195 N.J. 549, 569, 951 A..2d 931 (2008) (quoting Paper Mill Playhouse v. Millburn Twp., 95 N.J. 503, 506-07, 472 A.2d 517 (1984)). This rule reflects the well-established policy that ''the public tax burden is to be borne fairly and equitably.'' Int'l Sch. Servs., Inc. v. W. Windsor Twp., 207 N.J. 3, 15, 21 A.3d 1166 (2011). For that reason, an entity seeking a tax exemption has the burden of showing its entitlement to the exemption. Ibid. Nonetheless, this '''rule of strict construction must never be allowed to defeat the evident legislative design.''' N.J. Carpenters Apprentice Training & Educ. Fund v. Borough of Kenilworth, 147 N.J. 171, 177-78, 685 A.2d 1309 (1996) (quoting Boys' Club of Clifton, Inc. v. Twp. of Jefferson, 72 N.J. 389, 398, 371 A.2d 22 (1977)), cert. denied, 520 U.S. 1241, 117 S.Ct. 1845, 137 L.Ed.2d 1048 (1997).
[Advance Housing, Inc. v. Teaneck, 215 N.J. 549, 566 (2013).]
Whether a property can be considered tax-exempt is determined by the tax assessor on October 1. N.J.S.A. 54:4-23. Unless the Legislature has specifically provided otherwise, questions regarding tax-exemption are determined as of October 1 of the pre-tax year. County New Sch., Inc. v. City of Pleasantville, 2 N.J. Tax 192, 196 (Tax 1981).
N.J.S.A. 54:4-3.6 (the "Statute") governs when properties can be considered tax-exempt. The Statute explicitly enumerates persons and property exempt from taxation. In pertinent part, the Statute provides:
The following property shall be exempt from taxation under this chapter:... all buildings actually used in the work of associations and corporations organized exclusively for the moral and mental improvement of men, women and children....[and] all buildings actually used in the work of associations and corporations organized exclusively for... charitable purposes[.]…[T]he 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[.]…The foregoing exemption shall apply only where the association, corporation or institution claiming the exemptions owns the property in question and is organized under the laws of this State.
[N.J.S.A. 54:4-3.6 (emphasis added).]
In Paper Mill Playhouse, the Supreme Court of New Jersey laid out a three prong test for tax-exemption under the Statute: 1) the property-owning entity must be organized exclusively for the moral and mental improvement of men, women and children, 2) the property must actually be used for this purpose, and 3) the operation and the use of the property must not be conducted for profit. See Paper Mill Playhouse v. Millburn Township, 95 N.J. 503, 518 (1984). Moreover, the property must meet all three of these criteria as of October 1 of the pre-tax year in order to qualify for tax-exemption. See Job Haines Home for the Aged v. Bloomfield, 19 N.J. Tax 408, 417 (Tax 2001), aff'd 20 N.J. Tax 137 (App. Div. 2002); see also Holy Cross Precious Zion Glorious Church of God v. Trenton City, 2 N.J. Tax 352, 357 (Tax 1981).
The Defendant argues that the Property could not be tax-exempt during any of the years in question under the Paper Mill Playhouse test, because it cannot meet the first or second prongs of the test. In its summary judgment motion, Defendant argued two points: First,that the Subject was not actually used for tax-exempt purposes on or before October 1, 2007 and thus cannot receive tax-exemption for 2008. Second, Defendant argued that tax-exemption for any year is inappropriate because the Plaintiff does not provide tangible benefits or objective services. In its letter brief dated October 8, 2013, Defendant also argued that tax-exemption was inappropriate because Plaintiff's activities do not relieve the government of a public burden. Plaintiff counters that it is doing charitable work through the use of the Subject and that all three prongs of the test are unequivocally met. It is undisputed that Plaintiff meets the third prong of the test. However, the first two prongs merit further discussion.
1. Organized Exclusively for Moral and Mental Improvement
What constitutes "moral and mental improvement" sufficient to justify tax exemption has received considerable attention by our court, because the standard has never been explicitly defined or distinguished from the other standards. In fact, the moral and mental improvement standard has often been conflated with the "charitable purpose" portion of the statute:
In this case, neither the Tax Court nor the Appellate Division distinguished between the 'mental and moral improvement' and 'charitable purposes' provisions of the statute. Evidently, both courts used the terms interchangeably in considering Advance Housing generally as a non-profit, charitable organization. For our purposes here, we need not distinguish between an association for "the moral and mental improvement of men, women and children" and a charitable organization. The paramount issue is whether the
residences in which Advance Housing's clients live and receive supportive counseling are used for charitable purposes and are therefore entitled to an exemption under N.J.S.A. 54:4-3.6.
[Adv. Hous., Inc. v. Township of Teaneck, 215 N.J. 549, 568 (2013)(emphasis added).]
Early case law suggested that only charitable purposes which relieved the public from performing services would qualify an entity for property tax exemption. In 1927 our state's then highest Court affirmed a lower ruling which found:
Exemptions from the burdens of taxation, which the great masses of the people are called upon to sustain, as a requisite of civil government, are only favored in legislation, upon the theory that the concession is due as quid pro quo for the performance of a service essentially public, and which the state thereby is relieved pro tanto form the necessity of performing[.]This reciprocal relationship between the organization seeking the exemption and the government was again reiterated by the Court in noting that "[t]he exemption, to be valid, must of necessity clearly serve a public purpose contemplated by the statute." Kimberley Sch. v. Town of Montclair, 137 N.J.L. 402, (Sup. Ct. 1948), rev'd, 2 N.J. 28 (1949).
[Carteret Acad. v. State Bd. of Taxes and Assessment, 102 N.J.L. 525, 528 (Sup. Ct. 1926) aff'd, 104 N.J.L. 165 (E. & A. 1927).]
However, in reversing the earlier Kimberley Sch. v. Town of Montclair decision, the Supreme Court found a private school was entitled to the exemption and diminished the requirement for a quid pro quo relationship.
The term quid pro quo implies a quantitative exactness that cannot possibly be applied in measuring the benefits to the public from the existence of educational institutions. It erroneously suggests that the benefit is confined to the municipality in which the school is located, whereas in fact the advantages of educational institutions are not confined to the respective localities in which they are situated. Undeniably it is the public benefit resulting from education that justifies granting schools and colleges exemption from taxation, butRecent case law has clarified that this is not so much a requirement, but merely one factor which should go into consideration in determining eligibility for tax-exemption. "As a guide, however, it should be borne in mind that a sometimes stated justification for charitable tax exemptions is that if the charitable work were not being done by a private party, it would have to be undertaken at public expense." Presbyterian Homes of Synod of N. J. v. Div. of Tax Appeals, 55 N.J. 275, 285 (1970)(emphasis added). Most recently, in Adv. Hous., Inc., the Court found:
such benefit cannot be exactly admeasured either on the part of the schools or of the public.
[Kimberley Sch. v. Town of Montclair, 2 N.J. 28 (1949).]
Although all relevant considerations cannot be captured by any list given the ever-changing scenarios that will arise, and although each consideration may not necessarily deserve the same weight, here are some that apply to the circumstances of this case: (1) the charitable work done by the private entity will spare the government an expense that ultimately it must bear[.]By the same token, "[n]onprofit status [alone] cannot be equated with charitableness. Rather, it is but one factor which merits consideration in the determination whether property is being used for charitable purposes." Presbyterian Homes, supra, 55 N.J. at 286.
[Id., supra, 215 N.J. 549 at 572.]
Thus, there is no bright line rule for this prong of the test. Rather it depends upon the facts and circumstances. See Community Access Unlimited Inc. v. City of Elizabeth, 21 N.J. Tax 604, 613 (Tax 2003). Our Supreme Court laid out six factors to be considered in exemption challenges: (1) whether the charitable work spares the government some expense; (2) whether the entity could be said to be engaged in a commercial enterprise; (3) whether the property is used in a manner that furthers its charitable purpose; (4) whether the receipt of funds from a government entity is in contradiction to the charitable purpose; (5) whether the State in which the entity resides has recognized the entity or provided financial support; and (6) whether the entity's use of the property is carrying out important and legitimate governmental concerns. See Adv. Hous., Inc., supra, 215 N.J. at 572.
Given this facts and circumstances dependent analysis, it is unsurprising that challenges under the Statute have varied widely in success. For example, caring for independent retirees was insufficient, in itself, to satisfy the first prong of the test. See Presbyterian Homes, supra, 55 N.J. at 288. Whereas, in Paper Mill Playoushe dramatic arts and dissemination of literary material was found to definitely satisfy the first prong. See id., supra, 95 N.J. at 507. The promotion of "health, social, educational, vocational and character development of boys" has been found to sufficiently to satisfy the first requirement. Boys' Club of Clifton, Inc. v. Jefferson Township, 72 N.J. 389, 396 (1977). Furthermore, in Girls Friendly Socy. of Pennsylvania v. Cape May City, the court found the organization's stated purpose of encouraging purity of life, dutifulness to parents, faithfulness to employers and thrift among girls and women "improve the quality of life in society and provide a direct benefit of moral and mental improvement to the girls, their families and to future employers." 26 N.J. Tax 549, 565 (Tax 2012).
According to Plaintiff's bylaws, the organization's purpose is to: (a) establish moral and financial support to help the needy and the disabled with no regard to race or religion; (b) give moral support to the terminally ill and families of the terminally ill with no regard to race or religion; and (c) provide funding to organizations with purposes similar to those of this corporation. It is this court's opinion that Plaintiff's stated purposes are sufficiently charitable to satisfy this first prong under a plain reading of the statute. Plaintiff is organized exclusively to provide moral and financial support to the needy, disabled, and those affected by terminal illness. These purposes are consistent with "moral and mental improvement" under the Statute.
Furthermore, Plaintiff meets several of the factors laid out by the Supreme Court in Adv. Hous., Inc. To begin, Plaintiff does not engage in a commercial enterprise, because it does not accept any money from the individuals using the Subject. The property is used in a manner to further the Plaintiff's charitable purpose of providing support for seriously ill children and their families. The use of the Subject as a retreat assists siblings and parents of children with life-threatening illnesses in coping with family grief.
Lastly, the use of the Subject to help families of children with often terminal illnesses furthers the important governmental concern of fostering the family unit. Principally, the integrity of the family unit is afforded protection under multiple bases by the United States Constitution. For example, in Moore v. East Cleveland, Justice Powell noted substantive due process protects and affords rights to the family under the Fourteenth Amendment.
[D]ecisions establish that the Constitution protects the sanctity of the family precisely because the institution of the family is deeply rooted in this Nation's history and tradition. . . Especially in times of adversity, such as the death of a spouse or economic need, the broader family has tended to come together for mutual sustenance and to maintain or rebuild a secure home life.By the same token, N.J.S.A. 30:4C, which is declared to be the public policy of the state of New Jersey, lays down principles addressing the state's public policy concerning the welfare and safety of children and preservation of the family unit. Under the statue, "the preservation and strengthening of family life is a matter of public concern as being in the interests of the general welfare[.]" N.J.S.A. 30:4C-1(a). Accordingly, this court recognizes it is well-established that the integrity of the family unit is an important governmental concern.
[Moore v. East Cleveland, 431 U.S. 494, 503-505 (1977)]
2. Property Must Actually Be Used for Moral and Mental Improvement
It is less clear whether Chai Lifeline has sufficiently stated facts which satisfy the second prong of the Paper Mill Playhouse test. In City of Long Branch, the Court explained that this prong of the analysis asks whether the actual use of the property is "reasonably necessary" to carry out the moral and mental improvement objectives of the organization. City of Long Branch v. Monmouth Med. Ctr., 138 N.J. Super. 524, 532 (App. Div. 1976), aff'd o.b., 73 N.J. 179 (1977). However, it should be understood that this reasonably necessary standard does not equate to "absolutely indispensable." Boys' Club, supra, 72 N.J. at 401.
In Monmouth Med. Ctr., the court considered whether two different buildings, one used to rent below-market apartments to staff that worked at a non-profit hospital and another rented out as office space for physicians and dentists were reasonably necessary to further the hospital's purposes. The court found the apartments were incidental to and reasonably necessary for the accomplishment of hospital purposes and therefore exempt from taxation. Monmouth Med. Ctr., supra, 138 N.J. Super. at 535. The office buildings however were not granted tax-exemption.
[E]xemption from taxation for these buildings cannot be granted because it may be convenient for the Center to have staff physicians maintain their private offices in close proximity to the hospital, or because these physicians may perform some of their hospital duties in their private offices. Convenience is not the test; the test is reasonable necessity for hospital purposes, and the use of these buildings for private professional offices is not reasonably necessary for the Center's hospital purposes.
[Ibid.]
Similarly, in Boys' Club, the Court considered whether property and land donated and subsequently used for hiking, conservation, and nature programs were reasonably necessary to effectuate a club organization's goal "to promote the health, social, educational, vocational and character development of boys." Id., supra, 72 N.J. at 6.39 The Court stressed that the test was one of reasonable necessity and not indispensability. "The eating, sleeping and medical quarters, as well as the surrounding land, [were] all integrated components necessary for the proper operation of the camp." Id. at 401-402. Therefore, the club was entitled to the exemption.
Finally, in St. Ann's Catholic Church v. Hampton Borough the Tax Court considered an application for tax-exemption from a church for its caretaker's residence, located adjacent to its cemetery. See id., 14 N.J. Tax 88 (Tax 1994). In arguing for the exemption, the church asserted that the caretaker's residence at that location was reasonably necessary to prevent vandalism at the cemetery at night. In considering this argument, the court noted that "in order to find reasonable necessity, the exemption claimant must demonstrate a compelling need for such maintenance and caretaking, and an integration of those activities with the exempt functions of the entity." Id. at 100. Therein, the caretaker could only describe three minor incidents of suspicious activity at the cemetery. Subsequently, the court ruled that having a caretaker on premise year round was not reasonably necessary given insufficient evidence of the need to secure the church and cemetery. Thus, an exemption from taxation was inappropriate. Ibid.
As such, in order to satisfy the second prong of the Paper Mill Playhouse test, the Subject must not be merely convenient but also reasonably necessary to effectuate the Plaintiff's beneficent purpose. In demonstrating reasonable necessity, the Plaintiff should be prepared to show a compelling reason for that particular use of the property, although it is not necessary that that use be indispensable.
Contrary to Defendant's assertion, nowhere in the statute or the case law is it required that services or tangible benefits be offered at a property in order for it to be considered tax-exempt. Adv. Hous., Inc., supra, 215 N.J. at 577. The unpublished opinion cited by Defendant in support of its argument that objective services are a pre-requisite to tax-exemption focuses its inquiry on whether the charity's sole purpose of housing elder individuals sufficiently satisfied the first prong of the Paper Mill Playhouse test. See A.S. Pushkin Memorial Home, etc., v. Township of Jackson, No. 016049-2010 (N.J. Tax June 20, 2012) (slip op. at 6)("The provision of shelter for a monthly rent, the exclusive objective authorized in plaintiff's Constitution and By-Laws, does not satisfy the first prong of the Paper Mill Playhouse test."). Thus, while the Pushkin decision notes that services would have enhanced the amount of charity being offered to the residents, perhaps to a level that would have satisfied the first prong, it is not a requirement. Ibid. Herein, Plaintiff has already met the first prong of this test, and services on the Subject are not a pre-requisite.
Likewise, proof of mental or moral improvement is also not a requirement. See International Sch. Services, Inc. v. Township of West Windsor, 412 N.J. Super. 511, 525 (App. Div. 2010), aff'd, 207 N.J. 3 (2011); see also Girls Friendly Socy., supra, 26 N.J. Tax 549. In Girls Friendly Socy., the Court considered whether a non-profit's use of a beach home as a retreat for young women would meet the Paper Mill Playhouse test. To demonstrate reasonable necessity, the charity argued that it was one of the only places that was large enough to accommodate their members and its location allowed them to provide the girls with employment opportunities in the summer. The court upheld tax-exemption and noted that direct evidence of mental and moral improvement from these activities was not necessary. Ibid. As in Girls Friendly Society, Plaintiff must demonstrate that the use of the retreat is reasonably necessary to effectuate their goals but direct proof of moral and mental improvement of the families need not be shown.
The court finds that Plaintiff has met this burden for both tax years 2008 and 2011. Through the Certification of Melanie Kweztel, Plaintiff has demonstrated a clear need for the use of the Subject as a retreat for parents and siblings of children with life-threatening illnesses. According to the Kweztel Certification, "parents and siblings suffer from the unrelenting stress of living with the uncertainty of illness and of caring for a medically fragile child." (Kweztel Cert. ¶ 8). This suffering is alleviated by short retreats from the stress, offered by Plaintiff at the Subject. As described by Kweztel, "[g]etting away for a few days takes on a whole new meaning when a child is ill. Family time becomes even more precious, and the chance for meaningful interaction is prized." (Kweztel Cert. ¶ 13). Thus, the Goldman River Retreat's location, premise, and property is reasonably necessary to provide those distressed families with support. Providing relief for parents and siblings of terminally ill children is consistent with the Plaintiff's mission as well as the governmental interest in protecting the family unit. See generally N.J.S.A. 30:4C-1.
Regarding tax-exemption for the 2008 tax year, given that Plaintiff was gifted the property on July 26, 2007, it is reasonable that Plaintiff needed a short time to prepare the Subject prior to its use as a retreat. Prior to October 1, 2007, Plaintiff did prepare the property by furnishing it, decorating it to create a tranquil atmosphere, and supplying it with games and equipment. Plaintiff also used the Subject to hold staff meetings to plan for its use and select clients. All of these preparatory uses were reasonably necessary in order to operate the Subject as a retreat.
Conclusion
For the aforementioned reasons, Plaintiff's motion for summary judgment is granted, and Defendant's cross-motion for same is denied. Tax-exemption is appropriate for both 2008 and 2011 tax years. The court will enter judgment reversing the judgment of the County Board.
Very truly yours,
__________
Hon. Joseph M. Andresini, J.T.C.
N.J.S.A. 54:4-4.4 provides that a taxpayer shall file an initial statement for exemption for taxation on or before November 1 of the pre-tax year.