It could be six months to a year before an appeals court rules on the City of Newark’s appeal of the tax suit it lost to Jefferson Township.

It’s already been a year since a New Jersey tax court ruled against the city which had appealed the assessment of six lots of watershed land from 2009 through 2016.

Philip Elberg represented Newark and Larry Cohen represented Jefferson. Cohen estimated the appeal could got on for many more months.

In the appeal of an assessment, each party states its opinion on the best use of the land. The appealing taxpayer must prove the lower assessments are valid. Both Newark and Jefferson listed what their experts felt were the best uses of the land. The tax court rejected both claims of the best use of the land, but upheld the assessments Jefferson set on the property, Cohen explained.

The watershed property is in eight separate parcels totaling 4,036 acres of which 400 acres is open water. Between 90 and 95% is forested.

Use of the land is prohibited by several state laws.

One is the Watershed Moratorium Act, which prohibits the sale of land that protects a public water supply without specific authorization by that act. The land, like much of the township, is in the Highlands Protection Area.

In addition, Newark granted two conservation easements to the state Department of Environmental Protection, one in 2002 and the other in 2004. These easements were designed to “maintain forever and predominantly in natural forested condition and prevent any use that would impair or interfere with the conservation values.” The deeds of easement prevent subdivision and development, mining, construction of new roads, dumping and any activity detrimental to drainage, flood control, water conservation, erosion control or soil conservation. No clear-cutting is permitted although certain selective cutting of trees.

Jefferson’s appraiser considered the encumbrances and concluded the best use of the land is active/passive recreation.

Newark’s appraiser came to different conclusions, claiming the best use of the land is woodland management and the sale of the property for the purpose of harvesting timber for sale. He used the state’s farmland assessment program, sales of deed-restricted farmland and annual reports of the state farmland evaluation advisory committee to determine what the property could be sold for on Oct. 1 of each pre-tax year.

Newark was hoping for a $2 to $2.5 million tax refund, Cohen explained.

Even though both claims were rejected, the final judgement states in part: “Original assessments fixed by a municipal assessor are entitled to a presumption of validity based upon the view that it is presumed that, in tax matters, governmental authority has been exercised correctly and in accordance with law.” The presumption remains “in place even if the municipality utilized a flawed valuation methodology, so long as the quantum of the assessment is not so far removed from the true value of the property or the method of assessment itself is so patently defective as to justify removal of the presumption of validity.”

It’s Automatic

Cohen said Newark automatically files an appeal of the watershed lots every year, even though the city routinely loses the appeals.

“They are hoping for some other judge,” he speculated, adding, “or that the values will change.”

The attorney said Elberg may be working on a contingency rather than being paid for each of these unsuccessful appeals. The City of Newark press office didn’t return an inquiry into the financial relationship between the city and its tax attorney.

Cohen was retained to handle tax appeals for the township at the 2020 reorganization meeting. Payment for his services is not to exceed $36,000.

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