August 4, 2010 THE VILLADOM TIMES III • Page 5 Ho-Ho-Kus County denies railroad club’s tax appeal by Jennifer Crusco The Bergen County Board of Taxation last week unanimously denied the appeal filed by the Ramapo Valley Railroad Club, requiring the group to pay the $2,000 tax bill for its use of the Veterans of Foreign Wars building at 620 Post Street in Ho-HoKus. The model railroad club, which leases the building from the VFW, was asked to pay 2010 taxes on the portion of the building the group uses, and subsequently filed an appeal. The case was heard June 10, but the board reserved decision until last week. The breakdown of the assessment on the exempt portion of the property is $216,600 for the land and $45,200 for the improvement, while the taxable portion is 0 for the land and $135,500 for the improvement. The tax bill sent to the railroad club is approximately $2,000. Ho-Ho-Kus Tax Assessor Marie Merolla said the county board found the club did not prove its case for moral and mental improvement, which was the basis of the case for a tax exemption. Club members, who were represented by attorney Steve Irwin, asserted that their organization qualified for an exemption, stating that the club enhances education, is open to the public, and holds annual Open House events. The borough, represented by Ho-Ho-Kus Borough Attorney David Bole, asserted that the club is engaged in a hobby, rather than education, and, although the club opens its displays to the public, it does so intermittently. Merolla found that the club’s use of the VFW building had expanded between 2005 and 2009, and assessed the portion of the building being used by the club. That bill touched off the railroad club’s appeal. In 2009, Merolla advised Ho-Ho-Kus VFW Post Commander Stanley Kober that she had reviewed the lease and property tax exemption forms and found that a change should be made on the VFW building’s tax exempt status. “The reason for this change is due to the lease with the Ramapo Valley Railroad Club and that the veterans have access for meetings only once per month and one week before Memorial Day. In addition, the property is being entirely (emphasis supplied) leased to the railroad club, with limited access to the veterans,” Merolla wrote. “Although the Ramapo Valley Railroad Club may be non-profit, it does not meet the statutory requirements for property tax exemption.” Merolla previously indicated that the State of New Jersey permits a full tax exemption for veterans’ organizations that meet specific legal requirements, and allows these organizations to derive income without losing their exemption. “However, when the veteran organization property is leased to a non-exempt tenant the lessee has the leasehold estate, and is listed as the owner, even though they do not actually own the property. (N.J.S.A. 54:4-2.3). As the leasehold owner, they are responsible for their portion of the real estate taxes.” Merolla added that she believes the state laws and regulations supersede the lease “as the law specifically addresses leasehold estates, and must be adhered to.” When the lease of the VFW building was first proposed in the 1990s, the agreement was promoted as a solution for the railroad club, which had recently lost its layout space in Ramsey, and for the VFW, whose members had approached the council for assistance with maintaining the building. However, the railroad club and Post 192 have been at odds over the use of the local veterans’ group’s building for several years due to the restrictions placed on the VFW. The terms of the lease, which was renewed in 2002, allow the VFW members limited access to their own building, a situation that has been problematic since the organization was reorganized and revitalized. The Ho-Ho-Kus Council has approved an emergency appropriation of $60,000 and hired Appraisal Systems, Inc. to carry out a reassessment of the borough’s properties. Both decisions were made via resolutions last week. The resolution concerning the appropriation states that the total amount of $60,000 will be provided for in the budgets of “the next succeeding years by the inclusion of not less than $12,000.” The resolution hiring Appraisal Systems Borough ready to reassess to handle the process states that the borough “is fully aware of the impact of current economic conditions on the values of real property and…as a result of the current economic conditions, the mayor and council determined that it would be in the best interests of the borough and its taxpayers to have a fair and equitable reassessment of present market values.” New values will be used for the 2011 tax year. (continued on page 7) HARDING WINE&SPIRIT Wow! 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