The Tax Court of New Jersey has ordered the township of Weehawken to conduct a revaluation of properties as the result of a lawsuit brought by a group claiming to represent 175 homeowners along the waterfront.
Amit Gupta, Thomas Fayad, Minalkumar Patel, and Amani Toomer filed the suit against Weehawken in 2013, claiming that the waterfront properties are paying an unfairly large portion of the total taxes in the township.
In New Jersey, assessment for tax purposes is generally done when a property is bought or sold. For this reason, old houses often retain a lower total assessed value that houses just coming onto the market. State law requires municipalities to reassess all houses in a community every few years to make sure all homes are assessed at the same market valuation. However, a “reval” is not politically popular, and some towns have resisted conducting one for decades.
The Weehawken homeowners claimed that the township was in violation of state law that requires the township to perform a revaluation if the difference between newer and older assessments is beyond 15 percent. Weehawken has not held a citywide reval in more than 30 years.
“This case has been brought about by the enormous inequity in taxes in Weehawken,” said Gupta, one of the four who were named as plaintiffs in the suit. “Everybody should pay their fair share of taxes based on the value to their home. It shouldn’t matter if they are friend of mayor or lived here five or 10 years.”
“This case has been in brought about by the enormous inequity in taxes in Weehawken.” – Amit Gupta, plaintiff
Weehawken Mayor Richard said the $7 million house was not typical of the areas in the upland portion of the township, and noted that the waterfront properties are gaining in value far faster than the rest of the township.
“One waterfront property that was purchased for $1.7 million purchased a few years ago just sold for $2.6 million,” Turner said.
But Gupta said there are at least 32 homes in Weehawken with comparable value to the waterfront properties, yet pay significantly low taxes.
“The 175 homes on waterfront are paying most of the tax – 25 percent of the tax bill,” he said. “That’s out of 3,500 homes in the city. The township budget is $25 million. We pay $7 million of the total tax bill.”
No guarantee taxes for waterfront will go down after a reval
The reval would result in all homes in the township being taxed at the same market value, rather than newer homes being at their current market value and older homes at an older, lower valuation. This could result in a rise in taxes for older homes.
Turner said some of those involved in the suit believe a reval will lower their taxes.
“Unfortunately some on the waterfront are under the misconception that if everybody’s taxes go up theirs will go down,” Turner said. “But this may not be true. There are too many variables.”
Waterfront homes are increasing in value at a far greater rate than other homes in Weehawken, which means they will continue to pay high taxes.
“Yes, the taxes are high, but these people knew what the taxes were when they bought here,” Turner said, noting that homeowners have the option to challenge their assessments as part of a yearly process. Many do.
But the plaintiffs said this is a temporary solution, and a reval would fix the problem.
Court to monitor progress of reval
The court ruling was issued on July17, 2015 and ordered Weehawken to “immediately commence a municipal-wide revaluation” to be completed on an expedited schedule to be set and monitored by the court.
City officials said they are fully aware that the township needs to conduct a revaluation. But Turner said the massive waterfront redevelopment is still incomplete and a revaluation should be conducted when the projects along the waterfront are finished.
“We have four new buildings starting and two more that are expected to start,” said Turner, noting that the total land value could be $1 billion.
Turner said he is disappointed with the court ruling, but he is not surprised.
“We do have to do a reval,” he said.
But he also noted that nearly every town in Hudson County has a similar issue, and that Weehawken’s assessment issues are not as bad as some towns.
“We’re about in the middle of the pack,” he said. “Yes, we need to do the reval, but we want to wait until the other properties are finished.”
This could take several years, but he said it would be worth the wait for everyone since bringing on the additional revenues would help all property owners.
He said if the township does a reval before development is complete, the assessments will be skewed. The reval assessments would become invalid, he said, the moment the new properties were finished.
“We have a building boom,” Turner said. “It is our position that we will have to do a reval sooner or later, but sooner would be worse. If we do it sooner, the reval would be out of date once the projects are complete.”
He said these buildings are expected to be complete within the next two or three years.
So how soon should the reval be done?
The waterfront residents accuse the township of dragging its feet.
“The township got the court order middle of July;” Gupta said. “It’s November. Nothing has been done. They are still fighting us in court. Hoboken did it in two years, Weehawken is a fraction of the size. The township first estimated the reval could be completed by 2021. We believe a reval can be done by 2017.”
Turner said the reval process is complicated and cannot be done quickly, even if the township decides to move ahead with the process immediately.
One of the first elements would be to update the tax map, which currently doesn’t reflect any of the waterfront development.
“We’ve already started on that,” he said. “I did the last reval in 1993-94. It is a very complicated process. First you have to do the tax map; then you have to physically visit every property. People have a right to appeal the assessment. All of that takes time.”
It also costs money. He said updating the tax maps will cost about $200,000 and the reval will cost $250,000 on top of that.
“We believe the reval should be triggered at the best time,” Turner said. “Every town should do a reval, and should do a reval when it makes common sense.”
Al Sullivan may be reached at email@example.com.