Page 6 THE VILLADOM TIMES III • February 6, 2013 Ho-Ho-Kus Judge hears club’s suit against borough by Jennifer Crusco Oral arguments have been heard in the Ramapo Valley Railroad Club’s lawsuit against the Borough of Ho-Ho-Kus, but Tax Court Judge Patrick DeAlmeida has yet to render his decision. Last week, Ho-Ho-Kus Borough Attorney David Bole said the case was heard in Trenton late last month, and Judge DeAlmeida would now review all of the papers and records related to this case and make a ruling, or call for additional information. “The court has the case,” Bole said. “We’ll see what happens. Some interesting legal questions were raised.” The club’s lawsuit against the borough had been rescheduled multiple times. The case was to have been heard in September, but Hackensack Tax Court Judge Joseph Andresini moved to adjourn the suit until later in 2012. Ultimately, a change of venue was agreed upon to accommodate a witness from the Division of Taxation. The club is suing the borough over the Ho-Ho-Kus tax assessor’s assertion that the club, which leases space in the Veterans of Foreign Wars building at 620 Cliff Street, should pay property tax on the portion of the building the club uses. 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. Ho-Ho-Kus officials have declined to release the exact amount of taxes involved in the case, citing the pending litigation. Bole explained that there is an order on record that stays any action against the club for nonpayment of taxes while the suit is pending. However, if the court ultimately rules in the borough’s favor, the club would be required to pay back taxes, he said. Steve Irwin, Esq., who is representing the model railroad club, previously asserted that the club is not required to pay taxes on the building for its qualified exempt use of the property. The club’s members have cited the organization’s educational and charitable functions, including the annual holiday event, which is open to the public. In late 2011, Irwin said the club had “done nothing to imperil the exemption from taxation that the VFW has.” He said there had been an exemption for “20 years, until, out of the clear blue, the assessor decided to make it taxable.” He claimed that nothing has changed. Last week, Bole said the judge will now determine if the club meets the “moral and mental improvement of men, women, and children” standard included under the exemption statute. 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 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 noted 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 pro-rated. 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. 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, which was originally proposed in the 1990s, was promoted as a solution to issues being faced by the railroad club and the VFW. The club had recently lost its layout space in Ramsey, and the VFW had approached the council for assistance with building maintenance. In recent years, the club and the VFW have been at odds over the use of the building due to the restrictions placed on the VFW. The terms of the lease, which was renewed in 2002, allow the VFW limited access to the building, a situation that has been problematic since the VFW has become more active. At one point, the VFW planned to raze the Cliff Street building and construct a new home for Post 192, but the railroad club did not support those plans. The VFW then approached the borough to buy the neighboring property for a construction project. When that matter was close to a vote, the state VFW said the local post’s lease with the club was invalid, and the project was tabled. Post 192 later attempted to evict the club. The VFW claimed that the club violated the lease, and asked the club to remedy the violations. The case went to court and was dismissed without prejudice. Online registration for the Ho-Ho-Kus and Saddle River Baseball and Softball Association’s 2013 season is under way. Registration will continue through Feb. 22. The cost is $95 for children in kindergarten and first grade, and $125 for children in grades two through nine. The family maximum is $260. Register for baseball and softball Those whose registrations are received after Feb. 22 will be charged a late fee of $20 per child, and placement will be subject to availability. Parents may enroll children and volunteer as coaches and team parents at www.hhksrbsa.com. For more information, e-mail hhksrplayball@gmail.com.