Page 4 THE VILLADOM TIMES II • April 18, 2012 Area Railroad club’s lawsuit to be heard in September by Jennifer Crusco Hackensack Tax Court Judge Joseph Andresini recently moved to adjourn the Ramapo Valley Railroad Club’s lawsuit against the Borough of Ho-Ho-Kus. Borough Attorney David Bole, who is handling the case for the municipality, said the case will be heard in September at a date to be determined. 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 building, which is owned by the VFW. Post 192 serves members in Ridgewood and Ho-Ho-Kus. Bole reported that, as of last week, the club is still not paying the property tax. As this is an exemption case, Bole said the club is not required to pay while the suit is pending. However, if the court eventually rules in the borough’s favor, the club would be required to pay back taxes. Steve Irwin, Esq., who is representing the model railroad club, previously 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’s members have pointed out the organization’s educational and charitable functions, including the annual holiday event, which is open to the general public. Late last year, Irwin said the club had “done nothing to imperil the exemption from taxation that the VFW has.” According to Irwin, there had been an exemption for “20 years, until, out of the clear blue, the assessor decided to make it taxable.” The attorney asserted that nothing had changed. As of December 2011, the amount of the tax owed was approximately $1,800. Bole previously said that the tax collector advised that the case could end with a tax sale. The situation is unique, he noted, since the club does not own the building. He explained that a tax sale involving the property would consist of an interested party purchasing the tax sale certificate. The purchaser would not be buying the building, but rather the interest in the building now held by the railroad club; that is, the leasehold. The attorney pointed out that it would be unusual for someone to buy the tax sale certificate when a leasehold situation would be inferior to ownership. 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. Merolla said the change was warranted due to the lease with the club and the fact that the veterans have access to the building for meetings only once a month and one week before Memorial Day. Merolla stated that the property is being entirely leased to the club, with limited access to the veterans. While the railroad club is a non-profit, Merolla said it does not meet the statutory requirements for property tax exemption. According to the law covering taxation in leasehold situations, Merolla found that the exemption should be prorated. The area used by the veterans remains exempt, the assessor found. However, she determined that the remaining portion of the building is taxable, with the tax payable by the lessee. 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 previously stated. She added that the law provides that, in the absence of payment, “a lien on the leasehold estate is to be made and…(the club) shall be personally liable.” The lease was originally proposed in the 1990s, and was promoted as a solution for the railroad club and for the (continued on page 15) The Community Relations Advisory Board of Ridgewood and Glen Rock will meet in the third floor conference room at the Village of Ridgewood Municipal Building, 131 North Maple Avenue, at 7:30 p.m. on April 18. All meetings are open to the public, and provide a safe environment for community members who are experiencing or witnessing bias-related crimes to be heard. The board is currently working on a program that empowers Local advisory board to meet in village bystanders of bullying to make a difference. The Community Relations Advisory Board, whose members are appointed by the mayors of Ridgewood and Glen Rock, was created to overcome bias attitudes toward persons or groups based on race, color, religion, ethnicity, gender, sexual orientation, or disability. The all-volunteer board meets the third Wednesday of each month.