Eating Club Should Pay Taxes, Says Senate
Bill clarifications that would prevent Princeton University's Cottage Club from obtaining tax-exempt status were passed by the Senate Wagering, Tourism, and Historic Preservation Committee on Monday, September 27, at the State House Annex in Trenton.
Sponsored by Assemblyman Reed Gusciora and Senator Shirley K. Turner, the clarifications and updates to the current historic property status bill would stop private establishments like the Cottage Club, a Princeton University eating club valued at $1.5 million, from obtaining historic status and evading its annual tax payment of more than $50,000 to the Borough.
The bill clarification follows the eating club's application to the state for tax-exempt status. While the application was rejected by the Department of Environmental Protection (DEP), the Cottage Club is appealing to the Appellate Division of the Superior Court on the matter.
"This is blatantly targeted at the Cottage Club," said Barbara McConnell, a former state commerce commissioner backing the Cottage Club. "They do qualify for tax-exempt status and [Princeton Borough] just doesn't want them to have it."
She added that the Cottage Club is listed in the New Jersey Register of Historic Places, as well as the national register.
However, Mr. Gusciora said that the largest problem with the Cottage Club is that it is not an open public facility, as are other historic buildings that have tax-exempt status. He contended that the sole reason the Cottage Club is seeking historic status is to avoid its tax burden to the Borough.
He added that the Cottage Club would set a precedent for Princeton University's other eating clubs, as well as other buildings throughout the state that might seek historic status merely to avoid paying taxes. Currently there are 46 buildings in New Jersey with tax-exempt status, and 1,600 additional buildings that could apply for the status.
"That would open up a floodgate of other applications, and taxpayers would have to make up the difference," he said.
Thomas Olson, an attorney for the Cottage Club, said that the reason the eating club would want to avoid taxation is because it is a non-profit organization that pays for its own upkeep. He added that eventually the building could fall into disrepair because of a lack of funds.
Mr. Gusciora said that he doubted that situation would occur: "The Cottage Club could raise the money in one weekend to pay its property taxes."
The Cottage Club is currently open 12 days per year for tours, and would allow guests to enter on various other days as well, said Mr. Olson. However Mr. Gusciora's bill clarifications would require that the building be open to the public 96 days out of the year, unless otherwise excused by the DEP.
Borough Mayor Joseph O'Neill said he doesn't foresee the exclusive eating club, with its long history of being open only to its members, becoming a public facility.
Already passed by the state Assembly in June, the bill clarifications will be presented to the full Senate for final approval.