Government South Orange

South Orange Hires Tax Attorney to Assess Exemptions — Could Seton Hall Wind Up Paying More?

Seton Hall University is situated on 58 acres of land in South Orange, where nine of its 11 schools and colleges are located and where approximately 10,000 SHU students attend school every year.

But Seton Hall only pays about $485,000 in lieu of taxes per annum to the Township of South Orange Village.

And a number of other tax exempt properties in South Orange enjoy police and fire and other public services at a fraction of the cost of their non-exempt neighbors.

That could change.

South Orange Village President Sheena Collum announced earlier this month that the Village Board of Trustees will be retaining the services of a specialized tax attorney to “review all applicable nonprofit and tax-exempt properties to ensure that our community is sufficiently receiving its fair share of revenue.”

In a request for comment about her remarks by Village Green, Collum stated, “Recent case law has raised a lot of issues concerning the tax-exempt status of organizations and institutions and it would be foolish not to do our own due diligence given the sheer volume of land not currently only our tax rolls and the increasing burden this puts on our residents which pay the 17th highest taxes in the state.”

Collum, who is a Seton Hall alumna and a big booster for better relations between the town and the university, said that the review is not targeted at Seton Hall per se.

“South Orange is pleased to have a good working relationship with Seton Hall,” Collum wrote in an email, but she noted that “as the largest tax-exempt land owner, they will obviously be a part of this process.”

“I’d also welcome the opportunity to meet with Seton Hall’s leadership to discuss the voluntary service agreement the town has with the University,” continued Collum. “Regardless of the legal tests that define what constitutes an exempt use, which to me is more philosophical in nature, I’m more concerned about the practical implications on providing adequate public safety services to all members of our community including Seton Hall. I think both parties can agree this is a priority.”

The attorney being hired by South Orange is Martin Allen of DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum, P.C.  Allen made big news in 2015 — and sent shock waves through the ranks of NJ tax-exempt property owners — when he won a settlement for Morristown against Morristown Medical Center and Atlantic Health.  The settlement  stipulated that Atlantic Health System “pay the town $15.5 million, including $10 million upfront. That part of the settlement covers the years 2006 to 2015 and includes $5.5 million in penalties and interest that will be paid over the next five years,” according to NJ Spotlight. The judge in the case ruled that “Morristown Medical Center had so intermingled its nonprofit and for-profit services and finances that it could no longer qualify for a tax exemption under state law.”

This is the first in a series of articles on tax exempt properties in South Orange. Village Green will be following up with more coverage.

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