Borough Introduces 2007 Budget; Residents Debate What is 'Historic'

Matthew Hersh

Princeton Borough Council unanimously voted to introduce its $24.12 million budget last Tuesday, but questions regarding the finality of that proposed five-and-quarter tax hike were being asked as about $300,000 of Borough finances in question could spell the difference between a somewhat unremarkable increase and one that could impose a much heavier burden on Borough residents.

The Borough is awaiting a decision from the New Jersey Supreme Court over a contested request for historic designation for one of Princeton University's privately owned eating clubs, the University Cottage Club. The club, which currently does not hold historic site certification from the state, would be owed roughly $300,000 in back taxes, dating to 2001, if the courts rule in the club's favor. Buildings with that type of historic certification are tax-exempt, as long as the site is readily open to the public for a minimum of 12 days annually.

The back taxes, which would have to be paid by the Borough in one year, could translate into as much as an eight-cent municipal tax increase.

And while a court ruling is expected sometime this month or in early May, the fiscal ramifications are already making some Council members uneasy.

"This is potentially de-vastating to the Princeton Borough taxpayer," said Councilman Roger Martindell, a member of the Bo-rough's Finance Committee, who urged Council to begin thinking of alternate ways to mitigate the potential hike with cuts in services, spending, and hiring.

Councilman Andrew Koontz shared Mr. Martindell's concern, saying that while the Cottage Club had lost its pursuit for historic designation in 2003, this latest foray in the courts has been "extremely frustrating."

"This private club has asserted for itself a non-taxable status and has pursued it all the way to the Supreme Court, losing every step of the way, but now we find ourselves in the situation where they could succeed.

"The legal action they have pursued has been morally bankrupt. Every pro-perty owner in this Borough that is not an educational institution, church, or anything that is the traditional tax-exempt property has to pay, and the Cottage Club is trying to find a way out," Mr. Koontz said, adding that Council would have to "think creatively" if it were to foot the $300,000 back tax bill.

Mr. Martindell said in an interview last week that he would use the potential refinance of back taxes to the Cottage Club as a bargaining chip to increase the University's current $1 million payment in lieu of taxes to the Borough. That contribution will increase every year in line with the percentage increases in the approved municipal tax rate. In Princeton Borough, the University paid approximately $4.3 million in fiscal year 2006 on taxed buildings and infrastructure. In the Township, it paid approximately $4.6 million.

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In other news, residents both for and against a proposed historic district on the Morven Tract in the Borough's western section received a lesson in protocol as Council continued to walk a fine line on the issue. The meeting, however, focused strictly on the procedural elements that lead up to any decision.

With recent indications that a group of residents in favor of historic designation of the tract, comprising roughly 60 houses, will finance a study to be presen-ted to Borough Council, the process is likely to continue to attract strong opinions from either side, as deep divisions grow even deeper between neighbors in an area emblematic of Prin-ceton affluence.

If financed and executed, a study analyzing the historical merit of the Morven Tract would have to receive a favorable nod by the Prin-ceton Borough Historic Preservation Committee, and then receive approval by Borough Council. However, if 20 percent of neighbors petition to opposed historic designation, as is almost certain, Council would then need a super-majority, or two-thirds of the six Council members in favor of designation, to pass any measure.

The situation is complicated by the fact that two Council members, David Goldfarb and Wendy Benchley, have removed themselves from deliberations for potential conflicts. Mr. Goldfarb works for the law firm Drinker Biddle & Reath, and a resident in opposition has potentially contracted with one of the firm's lawyers. Ms. Benchley lives within the proposed district. As such, the four remaining members of Council would have to vote in favor of any historic proposal if it were to pass.

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