Real property tax uncertainty remains for New Jersey not-for-profit hospitals in the wake of Gov. Christie's pocket veto of S3299/A4903 (the Bill). The Bill was the New Jersey Legislature's response to the New Jersey Tax Court's decision this past year in AHS Hospital Corp., d/b/a Morristown Memorial Hospital v. Towns of Morristown, 28 N.J. 456 (Tax Ct. 2015).1 The Bill would have required the owner of an acute care not-for-profit hospital to make an annual "community service contribution" to the municipality where the hospital was located based on a formula of "$2.50 a day for each licensed bed" in the hospital in the prior tax year. The annual community service contribution for a satellite emergency care facility was $250 per day.
According to the Senate Budget and Appropriations Committee Report:
[T]his bill maintains the property tax exempt status of a nonprofit hospital with for-profit medical providers on site as long as the hospital remains organized as a nonprofit institution under State law, and requires nonprofit hospitals to, in lieu of property taxes, pay an annual community service contribution to their host municipalities. The clarified property tax exemption under the bill extends to the portions of hospital property used for medical purposes, and the community service contributions are required to be used to offset the costs of public safety services, such as police and fire safety services, or to reduce the property tax levy.
The Bill also would have allowed an owner "required to remit the community service contribution" to apply to the New Jersey Health Care Facilities Financing Authority for a certificate exempting the owner from the payment of the community service contribution if the owner was "in financial distress or at risk of being in financial distress." The Bill did not define "financial distress."
With no legislative guidance, many uncertainties (and likely additional costs for legal and other expert valuation services) remain for both not-for-profit hospitals and municipalities. All parties will be looking to assert and defend their positions regarding the extent of the applicable exemption as well as the valuation and assessment of the nonexempt portions of the hospitals' properties. Indeed, the examination of whether a hospital is tax-exempt will continue to be an analysis based on the factual circumstances of how each hospital is organized and conducts its operations.
[1] See Day Pitney Alert, New Jersey Tax Court Invalidates Hospital's Tax Exemption, June 29, 2015.
Day Pitney Real Estate, Environmental and Land Use practice co-chair Craig Gianetti was featured in Law360 article "NJ Bill Paves An Aggressive Affordable-Housing Path."
Day Pitney Alert
Day Pitney Alert
The arrival of Steven Wernick and Joseph Ruiz of Wernick & Co to Day Pitney's Miami office was featured in Miami Today's People column. Wernick and Ruiz are joining the firm's real estate, environmental and land use practices as a partner and counsel. Wernick & Co. built its reputation in the Miami area through experience in land use and zoning.
The Day Pitney Real Estate, Environmental, and Land Use Team, led by practice co-chair Katharine Coffey, represented the developers Russo Development, Onyx Equities LLC, and Dinallo Development LLC/Terminal Construction in connection with multiple transactions facilitating the development of Hackensack Meridian Health's $200 million, first-of-its-kind health care facility at Metropark, a mass transit hub in Woodbridge, NJ.
The arrival of Miami Attorneys Steven J. Wernick and Joseph Ruiz was featured in The Real Deal's Movers and Shakers column. Wernick, who joined as a partner, previously founded Wernick & Co, a Miami-based law firm specializing in land use and urban redevelopment.
Day Pitney Alert
The announcement of Day Pitney's most recent step in its commitment to strategic growth in South Florida by adding Steven Wernick and Joseph Ruiz of Wernick & Co. to its Miami office was featured in CityBiz.
Day Pitney Real Estate Partner Steven J. Wernick is featured in the Law360 article, "Revisions Show Fla.'s Dedication To Affordable Housing Law."
The arrival of Miami Real Estate and Land Use Attorneys Steven J. Wernick and Joseph Ruiz were featured in a Law360 article. Wernick and Ruiz joined from Wernick & Co, a land use boutique noted for numerous development projects in Miami's arts-focused Wynwood neighborhood.
Copyright © 2024 Day Pitney LLP, all rights reserved.