Ho-Ho-Kus December 21, 2011 THE VILLADOM TIMES III • Page 3 Attorneys prepare briefs in railroad club tax case by Jennifer Crusco The attorneys for the Ramapo Valley Railroad Club and the Borough of Ho-Ho-Kus are now preparing legal briefs in anticipation of a 2012 lawsuit. The club is suing the borough over the tax assessor’s assertion that the club, which leases space in the Veterans of Foreign Wars building at 620 Post Street, should pay property tax on the portion of the building used by the club. The borough first requested payment from the club in 2010, but the club has declined to pay the tax bill for the VFW-owned building. Steve Irwin, Esq., who is representing the model railroad club in this suit, asserted that the club is not required to pay the property tax on the building for its qualified exempt use of the property. The club has previously noted its educational and charitable functions, pointing to its annual holiday event, which is open to the general public. “The club has done nothing to imperil the exemption from taxation that the VFW has,” Irwin said. He added that there had been an exemption “for 20 years until, out of the clear blue, the assessor decided to make it taxable. Nothing changed,” he added. The amount of the tax owed is approximately $1,800, Irwin said. Ho-Ho-Kus Borough Attorney David Bole, who is handling the case for the municipality, said the tax collector has advised that the case could end with a tax sale. The situation is unique, Bole pointed out, since the railroad club is not the owner of the building. He explained that a tax sale involving the VFW-owned property would consist of an interested party purchasing the tax sale certificate. The purchaser would not be buying the building, Bole clarified, but rather the interest in the building now held by the railroad club; that is, the leasehold. The attorney noted that it would be unusual for someone to buy the tax sale certificate when a leasehold situation would be inferior to owning the building outright. Bole and Irwin are required to file their legal briefs with the Tax Court in Hackensack by Jan. 13. Judge Joseph Andresini, who will be handling this case, has yet to assign a court date. In late 2009, Ho-Ho-Kus Tax Assessor Marie Merolla advised VFW Post 192 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 to Kober. “Although the Ramapo Valley Railroad Club may be non-profit, it does not meet the statutory requirements for property tax exemption. “The law has set-up provisions for taxation in leasehold situations. In such cases, the exemption will be pro-rated for the percentage of usage for the veterans. That area will remain exempt and the veterans will not be billed for any taxes. The remaining portion will be taxable and payable by the lessee, the Ramapo Valley Railroad Club.” The State of New Jersey permits a full tax exemption for veterans’ organizations that meet specific legal requirements, and allows these organizations to derive incom 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 (continued on page 27) Ho-Ho-Kus Council President John Mongelli is now concluding his 15 years of service on the borough’s governing body. Mongelli, who has been a member of the council since 1997, plans to purchase a smaller home in another nearby community. He said his house has been on the market and will be again after the holidays. “New blood is desirable,” Mongelli said. He added, “If I’m going to be around, I will assist, but not from (a council Mongelli concludes service on council seat). I’ve enjoyed every minute and I’m always willing to be of assistance.” Mongelli has been involved in the latest round of PBA contract negotiations, and the DPW contract talks. He has lived in Ho-Ho-Kus for 33 years. He holds a bachelor’s degree in marketing and advertising from Long Island University, and is a member of Alpha Delta Sigma national advertising fraternity. (continued on page 10)