Township of Holmdel v. New Jersey Highway Authority

918 A.2d 603 HOLMDEL, PLAINTIFF-RESPONDENT, TOWNSHIP OF AUTHORITY, v. NEW JERSEY HIGHWAY DEFENDANT-APPELLANT. AUTHORITY, PLAINTIFF-APPELLANT,

NEW JERSEY HIGHWAY HOLMDEL, v. TOWNSHIP OF DEFENDANT-RESPONDENT. HOLMDEL, PLAINTIFF-RESPONDENT, TOWNSHIP OF AUTHORITY, v. NEW JERSEY TURNPIKE DEFENDANT-APPELLANT. AUTHORITY,

NEW JERSEY TURNPIKE PLAINTIFF- APPELLANT, HOLMDEL, v. TOWNSHIP OF DEFENDANT-RESPONDENT.

Argued January April 2007 Decided 2007. (DeCotiis, Miller, appellants Jeffrey argued J. cause for Miller, Wisler, attorneys; R. Fitzpatrick, & Mr. Michael Cole counsel). Clarke, Benjamin of Cole and (Linda- Rose, argued respondent the cause for Frederick W. McCormick, attorneys). bury, Cooper, Estabrook & opinion Justice ZAZZALI

Chief delivered the the Court. appeal, In portions this we must whether determine of the PNC (Arts Center), Bank Arts Center which is owned the New Jersey Turnpike Authority (Authority), are from local property municipal taxation. tax determined assessor Arts amphitheater reception Center’s center no were longer immunity entitled because the had leased private, for-profit those facilities two entities. Both the Tax Appellate Court and the Division held that those facilities were subject to taxation. amphitheater’s operation

Because the current furthers original purpose, Center’s we conclude that However, exempt. remains tax center’s construction privatization dramatic, unanticipated departures were from mandate, and, Authority’s statutory reasons, for those we hold subject Thus, that the center to taxation. we reverse in part, part, affirm in and remand for a tax assessment of the reception center.

I. A. 1953, Authority acquired adjacent 400 acres of land Parkway (Parkway) (Holm- Garden State Township in Holmdel del).1 Hearing Public Study Autonomous Authorities Before (Oct. 1968) Commission 59A [hereinafter October 1968 Hear- (Statement ing] Authority’s Tonti). Executive D. Director Louis land, Hill, obtained the Telegraph known as for the litigation When initiated, this was the Arts Center owned the New Highway Legislature merged However, Jersey Authority. Highway See L. into the 79. Turnpike Authority. After litigation Highway in this Turnpike Authority as the proceeded Authority’s convenience, successor in interest. For this matter, i.e., appellant regardless Center, owner the Arts be will referred to as the "Authority” it whether was the or the Turnpike Authority Authority.

79 time, At constructing Ibid. purpose of the Arts Center. Act) (Highway authorized the Authority Act Act or Highway maintain, repair construct, improve, Authority “acquire, to (repealed L. highway projects.” 27:12B-2 operate N.J.S.A added). 79) “highway project” (emphasis The Act defined c. motorway together ... express superhighway or “any highway, as as and facilities adjoining park or recreational areas with such promote necessary and Authority ... shall find to be desirable 27:12B-3(d) (amended by public and welfare.” N.J.S.A health 5.1(2)) “highway pro- (repealed). Significantly, (repealed). 27:12B-16 jects” from taxation. N.J.S.A. were agree- into lease empowered the to enter The Act also “necessary agreements parties if those were private with ments 27:12B-5(o) performance of its duties.” N.J.S.A. incidental (repealed). 1965, when delayed was until the Arts Center

Construction 5,000-seat amphi- approved of a Authority finally construction Hearing, supra, 63A-64A. The 1968 theater. October public purpose provide the Arts was claimed that Center’s generating traffic on the performing arts while more access to the hours, thereby increasing toll revenue Parkway during off-peak Authori- Authority. Hearing Autonomous Public Before (May 14,1968) May Study [hereinafter ties 65A-66A Commission (Statement D. Authority’s Director Hearing] Executive Tonti). maintained, therefore, that the Arts Louis project” pursuant statutorily “highway authorized as Center was Authority’s broad it served the Act because 12A. Hearing, supra, at purpose. October 1968 completed in 1968. At that of Arts Construction Center 5,000-seat amphitheat- time, only the the Arts Center consisted of facilities, er, miles of nature parking restroom two attendant House, community botany trails, Celebrity in which and the 69A-70A; May Hearing, supra, at Public held. classes were Jersey Highway Investiga- Meeting Special New Senate Before 1988) (Oct. 13, Hear- 1988 Senate [hereinafter tion Committee construct, ing\. nearly The cost million to $6.8 64A, Hearing, Authority supra, purpose- October 1968 at and the fully design necessary chose its size and on based the dimensions success,” to Additionally, ensure its id. at “economic 63A. the Authority immediately private company contracted with a for the responsibility booking, handling “full of subscriptions in ticket sales, general management [amphitheater].” of the at Id. 45A. There were no facilities Arts at the Center Hearing, supra, 1968. 1988 at Senate 38-39.

However, 1968, Assembly also the created the Autonomous Study Authorities investigate operation Commission to the Authority authorities, and other autonomous such as the New Jersey/New Authority Jersey York Port Turnpike and the New Authority. Assembly See Concurrent 9 Resolution No. 1968. of operating Commission concluded that the was legislative oversight without sufficient the Arts Center only tenuously Authority’s statutory connected to the man Report date. Study Interim the Autonomous Authorities of (Jan. 1969). Consequently, Legislature Commission 3 the amend “highway ed of project” only the definition to include those directly “facilities to [highways].” 1968, related of L. use c. 348, 27:12B-3(d) § (amending (repealed)). N.J.S.A The 1968 unequivocal purpose Amendment’s “prevent repetitions” was to of projects unauthorized May such as the Arts Center. 1968 Hear ing, supra, 2; Bureau, see also Monarch Entm’t Inc. v. N.J. Auth., (D.N.J.) (“The F.Supp. [Legisla very clearly ture disapproved Authority’s of expansive inter pretation provisions which the believed author Center.”), (3d to aff'd, ized it build an Arts 893 F.2d 1331 Cir. 1989). Nevertheless, already because had con and, structed the important, Arts Center more had issued State- guaranteed construction, bonds to finance its grandfathered by adding following provision Arts Center operation the Act: “The existing continued or facilities [Authority activities shall provisions not be affected act,” this 1 (amending N.J.S.A 27:12B-5.1 Message Richard J. Governor (repealed)). See also Veto 1968) (vetoing (Sept. Respect to Bill Hughes with Senate U93 provision grandfather did not contain original amendments that Center). implications for Arts of financial because Agreements Reception Lease Center limiting Legislature’s notwithstanding directive activities,” Authority- “existing facilities Center banquet and Celebrity House into a full-service converted the reception facility. Hearing, supra, at 36-39. The 1988 Senate general non Celebrity public as well as House was available time, At corporate, private Id. at 37. that the profit, entities. seventy people, capacity of Celebrity House had a maximum Authority an including Ibid. In the personnel. service larger reception center that would the construction of nounced receptions people people for “sit-down” accommodate 350 39-41, 44. final cost of the “stand-up” receptions. Id. at The for center, Meyner the B. reception known as Robert new now Center, Id. at 52. approximately million. Reception was $6.4 blatantly disregarded had the Authority Concerned that the reception and that the center of the 1968 Amendments intent increases, special the in the Senate convened would result toll Jersey Authority Investigation Committee. Senate New 1987; supra, Hearing, at 1 see 1988 Senate Resolution No. 122 of Committee). con- (discussing The purpose of Senate Committee facility million violated [a] “the cluded that construction $6.4 limit in 1968 to the specially amended state law which was related to Authority’s ability projects in which are not engage highway.” Report Senate Second Interim operation the the Authority Investigation Jersey Highway Committee Special New (Oct. 1989). that The also found Committee reception economic regarding no research center’s conducted solicitation, inappropriate id. feasibility, engaged at bid id. 42-44, an reception center was “ill-executed” and that profitable, 33. No corrective project would not id. at be however, ensued, legislation reception when completed, center was leased it to 116 Park Cater- (Park). ers agreement,

Under the terms of Park reception center “first-class, operate high quality,” would as a catering, banquet, facility. agreement and conference expired initial in 1998 but subject two-year periods. was renewal It was renewed twice replaced agreement Bott, before it was in 1996 a similar with (Bott). agreement Inc. The terms of that were identical to the agreement except payments Park greater that Bott’s annual were currently operates reception Park’s. Bott than center under agreement. the terms of the 1996 agreements, Under both the Bott and Park the lessee 'was responsible for reception day-to-day operation. center’s permitted lessees were to use “banquets, center conferences, seminars, luncheons, meetings, dinners, weddings and other similar agreements required activities.” The Bott and Park manage the lessee to “use its best efforts” center profitably. Accordingly, operated both Park and Bott recep- for-profit tion center as a catering facility general available to the public. required’

Both lessees were to make minimum payments annual Authority. payments Those minimum were credited to- percentage gross receipts wards a receive, ranged entitled to which from 10% to 25%. No minimum 1989, required $150,000 was for required but was for $250,000 $350,000 for and for agreement 1992. The Bott $300,000 imposed payment per year. minimum Amphitheater Agreement

The Lease Authority amphitheater leased the to GSAC Part- (GSAC). amphitheater ners Prior to operated by conjunction with private companies. several See 45A; Hearing, supra, October at Hearing, supra, Senate at 60. The retroactively GSAC lease took effect expires in 1996 and amphitheater and facilities consist in 2017. The leased areas, grants mostly The also parking lots. lease land related adjacent to the right use billboards the two electronic GSAC sponsors. Parkway advertisement scheduled events for right signs for non-commer- to use the retained purposes. cial “use, lease, rights to the exclusive GSAC holds

Under However, use of enjoy amphitheater.” GSAC’s operate, and events, seminars, corpo- facility is restricted entertainment fund-raisers, political tangential events. Addi- meetings, rate right to use the tionally, the retains the festivals, twenty ethnic-heritage admission- annually up for ten holiday The Authori- performances, and a celebration. free winter subject to facility is GSAC’s ty’s right to use the subordinate rights. requires recognized modem busi- to “use lease also GSAC high quality provide efficient services practices to

ness However, “ultimate respect programming, public.” action, solely any, with if should be taken rests decision as to what Nevertheless, to use its requires GSAC “rea- the lease [GSAC].” at present programming” “balanced efforts” to sonable best amphitheater. lease, right has limited to sell alcohol on

Under the GSAC beverages per premises. to two The lease restricts sales sale, requires before the per cessation of sales one hour person exhibiting signs anyone performance, prohibits sales to end intoxication, bringing alcohol onto the patrons from and bars merchandise, food, and is authorized to sell premises. GSAC also beverages performances. plus year, million first was a minimum of $1.5

Rent Rent for the profits in excess of million. 100% of GSAC’s $1 subsequent years million. Additional- was set at $1.65 second and revenues, gross pay contingent obligated to rent from ly, GSAC to 15%. GSAC graduated ranging from 5% on a scale based amphitheater. pay imposed on the agreed to all taxes further right amphitheater also has the GSAC sublease the without the Authority’s approval mortgage and its leasehold interest in the amphitheater.

Finally, requires the lease GSAC to undertake various renova- tions, including expansion amphitheater’s covered and lawn lots, facilities, seating, parking walkways restroom and access and Currently, plazas. amphitheater 17,000 can accommodate over and, lease, people may performances any under the GSAC host on day of the week.

Holmdel’s Tax Assessment In perceived privatization view of the of the Arts Center, tax Holmdel’s assessor determined that the sub- facilities ject agreements longer GSAC and Bott eligible were no for property exemption tax under immunity provi- Act’s sion, (repealed). N.J.S.A 27:12B-16 The tax assessor did not any against tax assess or property implicated by facilities not agreements, Bott Jersey and GSAC such as the New Vietnam Memorial, Telegraph Area, areas, Veterans’ Hill picnic Nature Highway Authority maintenance and buildings, administration State Police facilities. Holmdel concedes that those facilities are exempt.

For imposed the assessor an “omitted added assessment” $14,261,200 for the combined center complex. See (defining assessment”); N.J.S.A. 54:4-63.3 “added N.J.S.A. (permitting imposition 54:4-63.12 of omitted as- “added sessment”). imposed For Holmdel an “added assessment” amount, and, in the imposed same Holmdel a “regular assessment” of both Authority $200. Holmdel and the appealed those tax assessments. The claimed that the property assessed statutorily facilities were from taxation, property sought an Holmdel increase the amount of each assessment.2 2 Neither the nor Holmdel tax assessments for 1999 or appealed However,

2003. in actions from this separate and Holm- appeal,

85 B. 1999, Authority’s motion for granted the In the Tax Court entitled to summary judgment, holding that the Arts Center was immunity. remanded for Appellate Division reversed and tax amphitheater’s use under GSAC whether the determination in envisioned lease coincided with use center, 1989, completed in was con 1968; reception whether the 1968; and, so, if use Legislature in whether the templated agreement far reception the Bott is too center under initially-contemplated Legislature’s use to war from the removed Auth., immunity. Highway 329 Twp. Holmdel v. N.J. rant tax 410, 431-32, N.J.Super. (App.Div.2000). 128 748A.2d remand, amphitheater and Tax concluded that the On Court different, physically “significantly and reception center were Legislature contemplated 1968. operation,” than the [their] 428, Auth., 22 N.J.Tax 451-52 Highway Twp. Holmdel v. N.J. (2005) subject reception held that the center was . The Tax Court question amphitheater was years in and that the to tax for all 1997, year first for which the subject beginning in to tax Thus, the court actually operative. Id. at 466. was GSAC lease subject amphitheater were both that the center and held that, 2000, 2002, 2004, 1997,1998, 2001, to taxation for appeal, the 1996, only reception center taxable. Ibid. On summarily ruling. upheld the Tax Court’s Appellate Division Auth., 36, 40, N.J.Super. 388 Twp. Holmdel v. N.J. sought parties leave to file an (App.Div.2006). Both 905 A.2d 570, interlocutory N.J. 911 A.2d 64 appeal, granted. we which (2006). 2004. For 2000, 2001, assessments for del contested the tax years each of those contested contested the assessment. For years, only Authority $1,717,000. Thus, there are that the owed

the tax assessor determined pending regarding 2000, 2001, tax for years Authority’s immunity appeals However, the this 2002, and 2004 that are not directly appeal. implicated govern the this will Authori- have that the resolution of appeal parties stipulated pending tax in those liability appeals. ty’s II. arguing that the center are no longer exempt, points Holmdel to the 1968 Amendments statute, Authority’s enabling 348; L. c. L. c. 441. expressly prohibited Those amendments from con- structing operating “any facility directly ... not related highway project,” use (amending N.J.S.A (repealed)), permitted 27:12B-5.1 but to continue operating “existing activities,” all 1968, 441, § facilities (amending Thus, N. (repealed)). J.S.A. 27:12B-5.1 argues Holmdel subject that the Arts is Center taxation because the Park and agreements GSAC lease extend the Arts operation Center’s be- yond what existed in 1968. Authority responds agreements that the lease have not

substantially Center, altered the use of the Arts immunity and tax applies. therefore still argues also 2003 the any resolved regarding doubts immunity the tax of the merged Arts Center it because into the Turnpike Authority expressly declared the Arts Center be “highway a project” of Turnpike Authority. See L. c. 79 Merger Legislation] [hereinafter 27:23-4). (amending N.J.S.A.

III. A. This appeal statutory concerns an of interpretation, issue which Hodges we review de novo. Corp., v. Sasil 189 N.J. (2007) 221, 915 (citing A.2d 1 Chems., v. Balsamides Protameen Inc., 352, 372, (1999)). 160 N.J. 734 A.2d 721 Additionally, al though the Arts history pertinent Center’s is presents it because extrinsic Legislature’s intent, evidence the Tax Court’s specific findings regarding history of the Arts Center are not by entitled to reviewing deference a DiProspero court. See v. Penn, 477, 492-93, (2005) 183 N.J. 874 A.2d (discussing aids). proper interpretive Therefore, use extrinsic to the extent us to consider extrinsic evidence appropriate is it intent, independent review of the Arts we conduct an legislative history. Center’s

B. legal analysis of the basic begin our with review We governmental All real tax immunities. principles relevant taxation, 54:4-1, subject to property Jersey is N.J.S.A. within New Const, Legislature, see N.J. art. expressly exempted unless ¶2 VIII, exemptions). legislative Judicial (authorizing tax exemptions governed princi interpretation statutory tax Reade, Inc. v. ples general statutory construction. Walter (1962). Thus, 435, 440, Dennis, when 177 A.2d 752 36 N.J. exemption, “Legislature’s intent is interpreting and, of that paramount goal generally, ... the best indicator DiProspero, supra, 183 N.J. at statutory language.” is the intent Reads, 1039; supra, 36 N.J. at see also 874 A.2d Walter (“[T]he upon the intention of the decision turn[s] 177 A.2d 752 creating agency providing for Legislature in the statute exemption.”). Legislature’s Jersey Constitution restricts the The New Williams, F. The authority grant exemptions. Robert tax See to (1997) (discussing interre Jersey 109-15 New State Constitution statutory scope tax provisions that restrict of lated constitutional immunities). only by Legislature may grant exemptions The use, exemptions property’s on “general and must base laws” ¶ VIII, 1, 2; § identity. art. see also N.J. Const. not the owner’s ¶ 9(6) IV, 7, respect (prohibiting special laws N.J. Const. art. 38, Twp., 16 N.J. taxation); Turnpike Washington Auth. v. of N.J. (1954) (finding exemptions based on owner’s 44-45, 4 tax 106 A.2d unconstitutional). Thus, it is unconstitutional personal status government agency owns exemptions simply award tax because Auth., 38 subject property. v. Port N.Y. See Moonachie of (1962). exemption must 414, 427-28, 185 tax be A.2d 207 N.J. fact, must, put use, property be property’s and the on the based 88 Washington 45-46, Twp., that use. supra, 16 at N.J. 106 A.2d

4. interpretation statutory

Judicial exemptions impli of tax hand, competing cates considerations. On tax one immunities for government liberally authorities should be they construed because provision public Reade, facilitate the of services. See Walter supra, 440, 752; at generally 36 N.J. 177 A.2d Gunning, see Rob Into Bog: Intergovernmental and Out Immunity Tax of Doctrine, (2005). 151, 41 L.Rev. Willamette Even where government agencies property private entities, lease exemp liberally they tions should “ultimately be construed because favor private-sector activities the state [that] considers to be valuable.” Gunning, supra, hand, 41 Willamette L.Rev. at 203. On the other observed, as power Chief Justice Vanderbilt taxing “The lies at government. the heart government Without taxes could not Any impairment function. taxing power of the affects the life of government.” Washington blood Twp., supra, 44, 16 N.J. at 4; Moonachie, A.2d accord supra, N.J. at 185 A.2d governments 207. especially Local dependent are property on revenue, significant for exemptions taxes place tax added private property burdens on required owners who are to fill the tax-gap by governmental Moonachie, created immunities. See supra, (“[Tax 38 N.J. at 185 A.2d 207 east[ a immunities] ] proportionately greater share support govern state and local upon owner”). private property ment “Aceordingly[,] claims exemptions for tax scrutiny,” have to stand Washington Twp., supra, 16 N.J. immunity at 106 A.2d government and tax agencies should be if property benefiting denied from the tax exemption is scope” agency’s not “within the Moonachie, purpose, 427, 185 supra, 38 N.J. at A.2d 207. recognized

This private Court has agreements lease automatically do agency’s not forfeit an immunity. See Walter Reade, supra, 36 (holding N.J. 177 A.2d private operation highway plazas governmental service did not forfeit immunity). Rather, inquiry the determinative is whether the statutory agency’s man in furtherance of the property is utilized 440-41, government property or 752. If a Id. at 177 A.2d date. entity private operates facility private entity a and the is leased to agency’s statutory facility with the property or in accordance immunity may apply. Ibid. still purpose, Moonachie, proper supra, holding in illustrates This Court’s 207. In 185 A.2d application principles. of those 38 N.J. parcel of case, acquired a ten-acre the Port had airport an and then leased to use as a sound barrier around land a private, for-profit company that constructed property to a 417, 185 factory 207. The Port Id. at A.2d on the land. necessary property and incidental acquire was authorized to 32:1-35.18, airports, N.J.S.A. and maintenance construction immunity to all Authority’s enabling granted tax Port statute Although we purposes, 32:1-35.5. property for such N.J.S.A. used it exempt the Port used that the land was because held Moonachie, 185 A.2d supra, 38 N.J. at approved purposes, building not factory concluded that we being purposes within it “not used for air terminal because was terms,” meaning 185 A.2d 207. legislative of those id. at specifying upon a statute exemption “a tax based declared that We clearly to which the particular public use is lost when the use a foreign prescribed Id. at property put is is use.” A.2d 207. unique presents a principles, appeal this

In view of those Highway Act were question. the 1968 Amendments When enacted, Authority’s mandate they first redefined Following those the Governor’s veto of the Arts Center. exclude for the amendments, special exception enacted Authority’s mandate. enlarging the without Center authorize, and immu- grandfather provision was to effect of Authority’s nize, statu- otherwise exceed project that would therefore, case, tory purpose. In this unusual immunity if current to tax their center are entitled grandfather of the 1968 operation consistent with the intent 90

provision, Authority’s not the by overall mandate as redefined 1968Amendments.

IV. operation We now consider amphi- whether the current of the theater and center is scope within the intended of the grandfather provision. discuss the amphitheater We and the separately, beginning center amphitheater. with the

A. grandfather states, The 1968 provision “The continued operation existing by [Authority facilities or activities shall provisions not be affected 441, § of this act.” L. (amending (repealed)). N.J.S.A. 27:12B-5.1 In the Arts “existing Center’s only facilities” amphitheater, consisted of trails, House, which, two miles of nature Celebrity at that time, botany was used to host May classes. 1968 Hearing, supra, at Telegraph property 69A-70A. The Hill was also the site buildings various administrative workshops. and maintenance Oc tober Hearing, supra, at 64A-65A.

However, significant most appeal, to this amphitheater initially operated conjunction private with a firm in a manner substantially similar to the terms of the current GSAC lease. five-year entered into a contract with Neder- (Nederlander) lander Associates responsibility the “full booking, handling subscriptions sales, general ticket man- agement [amphitheater].” Hearing, supra, October 1968 at added). (emphasis 45A agreement required further Neder- lander to [during performance “underwrite all costs season] . make available to the one-third of [Nederlan- profits] der’s the end the season.” Ibid. Nederlander was granted also right operate concession amphitheat- stands at performances. er Id. During at 48A. inaugural Nederlander’s season, performance amphitheater sixty night-time hosted performances featuring “outstanding artists from the classical and also performing Id. at 66A. Nederlander events popular world.” show, perform- regional daytime educational a talent included ances, Army Band and performance the United States Field two-day Choras, jazz Id. at 66A-67A. festival. Soldiers’ 300,000 performances in 1968. people Over attended Id. at 66A. requires operate agreement to

The current GSAC lease GSAC operated amphitheater manner as Nederlander the in much same conveys agreement a leasehold Although it in 1968. the GSAC amphitheater is amphitheater, in the GSAC’s use interest limited, contractually obligated operate to severely and GSAC original purpose. amphitheater in its Section accordance with amphitheater to 5.10(g) lease the use of the of the restricts GSAC following activities: (a) including producing presenting or shows, for and entertainment events comedians, of musical or artis- commercial concerts limitation, performers without and music, ballet or theatrical performances tic performances symphonic opera, dnemagraphie video and audio films, productions; or simulcast pre-recorded

(b) holding conducting festivals; of fairs and for the or (c) conferences, seminars, corporate or location for educational as a center graduations meetings, meetings, fundraisers; events, shareholder civic political ...) (d) beverages beverages (including selling and alcoholic food, as a for place merchandise; other (e) which are related directly and all other lawful any purposes foregoing uses and purposes. right amphi- Additionally, to use the retains past practices,” for ten ethnic- annually, “consistent with theater a festivals, twenty performances, and win- heritage admission-free “reason- holiday required also to make GSAC is ter celebration. programming” at provide “balanced able best efforts” provisions a host of other amphitheater. The lease contains community significant reinforcing [ajmphitheater is a that “the requiring GSAC operated reputable manner” and asset to be Thus, past its use. operate amphitheater “consistent” with amphitheater agreement ensure that the of the the terms GSAC arts center. public performing as a operated will to be continue Nevertheless, aspects Holmdel identifies several of the GSAC fundamentally lease that it asserts alter the Arts Center’s use. Specifically, prohibited Holmdel notes that .Nederlander was from serving during performances alcohol and could per- not schedule Parkway’s during formances peak periods Friday traffic — Sunday evenings during subject the summer. GSAC is not may same performances those limitations and serve alcohol at any day schedule events for empha- week. Holmdel also that, agreement, sizes under the terms amphi- GSAC enlarged upgraded, theater facilities will be altering further amphitheater original design. Finally, from its Holmdel con- amphitheater originally designed tends that the to function as facility, cultural and educational not a commercial venue for popular artists. amphitheater’s

Holmdel’s characterization initial use is always inaccurate. The popular has per- hosted formers, as Indeed, well as educational and cultural events. 1968 season multiple performances included “outstanding from popular artists from the ... performing Hearing, world.” October supra, Additionally, at 66A. the GSAC lease ensures that amphitheater will to continue be the site of cultural and education- al events amphitheater because the is entitled to use the thirty-one public per year interest requires events GSAC present to programming. balanced

Further, question in appeal this is not whether there have any operational changes been since 1968. We are satisfied that Legislature the 1968 did not amphitheater intend the to be frozen operation in repair the state of that existed 1968. Such an interpretation produce Instead, would an absurd result. the rele- inquiry vant is amphitheater’s whether the current use was con- templated by the Legislature grandfathered 1968 it when the Arts Center. original

One the Arts purposes generate Center’s was to Authority. revenue for the The Arts Center’s construction was by issuing State-guaranteed bonds, financed repaid to be from generated by the Arts Center. The Arts Center was also revenue expected used to generate to additional revenue would be Parkway. repay Since its bonds that were issued to construct the therefore, birth, generate the Arts was intended to reve- Center providing public Authority in addition to access nue for the performing arts. fully Legislature of the Arts Center’s dual

The 1968 was aware to purpose. first of the Amendments Act The provision grandfathering did not include a the Arts Center. 1968, c. 348. The Governor vetoed those amendments because they specific would “violate the covenant State with bondholders,” Message Hughes Governor Richard J. With Veto 1968). Legislature Respect (Sept. Senate Bill to recog subsequently grandfather provision, evincing added its gener amphitheater to nition that the should continue be used Authority. for the ate revenue amphitheater’s operation current

Holmdel’s assertion that the Legislature presumes contemplated not the 1968 that the amphitheater’s operation to Legislature did not intend for the profitability. adapt necessary maintain That evolve and as presumption misguided. amphitheater was intended to performing purposes providing serve two access to arts and — Authority. Renovations, contemporary generating revenue for the adap- all programming, and alcoholic refreshments are reasonable retaining amphitheater’s profitability. aimed at tations Authority’s agreement under- The GSAC lease thus serves creating amphitheat- lying purposes amphitheater, and the Authority’s exemption. er is entitled to the We are satisfied that the intended currently operat- operated as it is be in much the same manner Leg- grandfathering amphitheater, ed GSAC. expected amphitheater’s operation that the would evolve islature necessary Although amphitheater’s profitability. as to retain changed programming and have since those incre- facilities changes furtherance of the am- mental and reasonable were in phitheater’s original purpose. The terms of the GSAC lease do depart progression. not from that intended

B. reception presents center different set of circum First, amphitheater. public stances than the recep there were no tion facilities or services at the in Arts Center 1968. 1988 Senate Hearing, supra, Although Celebrity at 38-39. House was reception converted into a center in our review the Arts that, history Celebrity Center’s reveals 1968 the House was used primarily community botany to May host Hearing, classes. supra, 1968, Authority In any 69A-70A. had not dedicated exclusively facilities reception reception services no services general public. were available to the any Nor is there indication Legislature, that the 1968 which reluctantly grandfathered the million amphitheater, contem- $6.7 plated subsequent construction of a million commercial $6.4 fact, reception opposite Legisla- center. is true. The 1968 prevent unequivocally “repetitions” ture projects intended sought like the to “bar the door to similar (statement projects the future.” Id. at Senator Matthew J. Rinaldo, Amendments). sponsor of 1968 already noted, Special

As Jersey Highway the Senate New . Investigation investigate Committee was convened in reception center. The Committee concluded that the statutory powers had exceeded its in the construction of the reception reception center and that the center anwas “ill-execut- project ed” “appropriate that could have been legisla- avoided with input.” tive Report Second Interim Special Jersey Senate New (Oct. Highway Authority 1989). Investigation Committee 30 predicted prices Committee that an increase in toll would be necessary reception to sustain the center because the had any constructed the center developing without mar- keting feasibility strategies. Ibid. Committee members also criticized the center because it extended the Arts Cen- beyond [was “far what the Arts Center facilities and services ter’s (statement by Hearing, supra, at 70 doing.” 1988 Senate then] Ambrosio). Gabriel M. Senator comport with reception center characterizations of

Those Legislature enact- design its and construction. The our review of “repeti- preventing with the intention the 1968 Amendments ed agree that amphitheater. cannot projects We tions” of like simultaneously contemplated approved of the reception Because dollar center. of multi-million construction public reception facilities or services at the no there were a reasonable center was not Center activities,” “existing N.J.S.A facilities incremental extension amphitheater’s gradual evolu- (repealed). 27.-12B-5.1 Unlike any unexpected project, without tion, was an center original purpose, and the Arts Center’s reasonable nexus to Accordingly, it exemption. beyond scope of the tax the intended immunity. to tax is not entitled

C. Merger contends that the 2003 nevertheless Highway repealed Act and which Legislation, L. Authority, Turnpike into the merged the from to the Arts Center Legislature’s intent evidences taxation. McGree- Merger Legislation prompted was Governor Jersey facing a “fiscal crisis.” See

vejfs concern that New 2006) (Mar. 26, (discussing reasons Executive Order No. 15 consolidation). McGreevey the Toll created Governor investigate Study “the fiscal to Road Commission Consolidation oper- separate three instrumentalities prudence maintaining further Jersey’s] Ibid. The Governor toll roads.” [New ate it that, light fiscal crisis has of the State’s serious explained “[I]n of these necessary whether the functions to reexamine become administer, construct, operate and maintain acquire, authorities respective duplicative their toll roads are and can be consolidated promote operational efficiency savings.” and economic Ibid. 2003, suggested Turnpike Authority Commission that the Highway Authority and the merged, be recommending that the Turnpike Authority acquire Highway Authority. Report thé (Feb. Jersey Study New Toll Road Consolidation Commission 2003) Report]. [hereinafter Toll Road The Commission estimated that the consolidation in savings. result a million $198 would Ibid. The Commission also noted that consolidation would “achieve operational efficiencies,” administrative economies and “pool capi- resources,” planning tal “provide sorely for needed toll road capital improvements.” Acting Ibid. on the Commission’s recom- mendations, Legislature passed Merger Legislation Legislature 2003. The declared that “[t]he abolishment of the Jersey Highway New Authority and the transfer of its functions to Jersey Turnpike Authority New permit improved will trans- portation planning, operations, facilitate more improve efficient capital budget process and achieve administrative economies.” 79, 1(b). § L. c.

Regarding Center, Merger the Arts Legislation transferred ownership Turnpike Authority to the and amended the definition “highway project” Center, to include “the Garden State Arts as [Turnpike] Authority.” to the 79, § c. 8 transferred 27:23-4) (amending added). (emphasis N.J.S.A Merger Leg- provided islation further that “the reaffirms that all existing property, facilities and operations, and their manage- ment, of [Turnpike Authority] Jersey of the New Authority, authority, as to the public are deemed transferred governmental essential functions and are from local taxes assessments.” L. (amending N.J.S.A 27:23- 12) added). (emphasis arguments advances two regarding Merger First,

Legislation. Merger contends that the 2003 Legislation Legislature’s demonstrates the 1968 to exempt intent the Arts therefore, Center from Authority, taxation. The urges Merger Legislation that the 1968 to infer from the 2008 this Court all provide immunity tax to the Arts Amendments Center years prior Merger Legisla- years appeal, including under Second, Authority argues Merger that the tion’s enactment. new, exemption applies Legislation prospective created a years for all after 2003. disagree. In cases where our courts have looked to subse

We extrinsic, legislation of earlier quent as non-conclusive evidence intent, legislative inquiries have limited to circum those been meaning [is] former statute stances “where doubtful Marini, legislation.” Boyd subsequent certain v. rendered added) 324, 328, (emphasis (App.Div.1975) N.J.Super. 333 A.2d 559 omitted). (alteration Here, however, original) (quotation not be meaning of is clear and need Amendments language by subsequent legislation.” Ibid. The “rendered certain history provide conclusive evidence of the 1968 Amendments meaning, and need not consult the of the statute’s intended we thirty years than later —for Merger Legislation more —enacted clarification. argument, Authority’s with which Justice

The second dissent/concurrence, Merger is agrees in his that Wallace However, new, exemption. prospective a tax Legislation created history of the supported is or that contention not the text 27:23-12, Indeed, Merger Legislation. which defines the N.J.S.A states, Merger Legislation] immunity, “[The tax Arts Center’s existing ... tax property are all facilities [that] reaffirms added). literally means (emphasis The “reaffirm” exempt.” word Dictionary Third New International again.” to “affirm Webster’s 1971) added). (3d incongruous Thus, it (emphasis ed. entirely new to create an Legislature conclude intended that “reaffirm,” implies which exemption to use the word tax but chose condition, exemption. that Addi past of a to create confirmation tionally, interpreting prospective tax N.J.S.A. 27:23-12 to create meaningless immunity the word “reaffirm.” Be would render scope of the Arts Cen- 1968 Amendments defined the cause the immunity prior ter’s tax Merger Legislation’s lan- guage purports only exemption already to “reaffirm” that under the existed 1968Amendments.

Further, 27:23-4, categorizes N.J.S.A. which the Arts Center as “highway project” Turnpike Authority, of the declares that a “ ‘[hjighway project’ means ... maintenance of the ... Garden Center, State Arts as Authority.” (emphasis transferred added). phrase qualifies The “as transferred” the Arts Center’s categorization highway project. phrase as a imply does not enlargement an statutory purpose. Rather, of the Arts Center’s it suggests Authority’s regarding mandate the Arts Center Turnpike enlarging transferred to the without or altering interpretation it. Legislature’s That is bolstered “maintenance,” use of suggests the word which Merger that the Legislation Turnpike Authority only authorized the to retain the quo. sum, Arts Center’s status Merger Legislation’s language indicates that the intended to transfer the Turnpike creating Center to the without a new tax immunity enlarging the Arts purpose. Center’s history purpose Merger Legislation further support Merger that conclusion. The Legislation was not intend- enlarge ed to Highway Authority’s or alter the Instead, mandate. purpose its improve sole towas administrative economies and operational impetus Merger efficiencies. The Legislation for the was the State’s fiscal suggestion crisis the Commission’s consolidation would save the State million. Toll $198 Road Re- port, supra.

Finally, support argument Merger of the Legislation that the a prospective exemption, created tax the pres dissent/concurrence argument. ents an additional opinion That states that because the Merger Legislation enacted the appeal while this pending, Merger Legislation clarify was “intended to the tax pending issue that was before Tax Court.” Post at (Wallace, J., A.2d at 619 dissenting/concurring). However, despite Merger Legislation’s history, well-documented there is no tax Legislature considered the Center’s that evidence Rather, noted, Merger Legislation’s already immunity. as by mitigate fiscal crisis purpose the State’s was to exclusive (de- N.J.S.A. 27:23-41 reducing inefficiencies. See administrative Thus, inference, Merger Legislation). claring purpose of proximity this temporal between although plausible in view of the is not Merger Legislation, appeal the enactment of the dissentyconcur- Indeed, history. legislative supported demonstrating any that the evidence rence does not cite extrinsic immunity it tax when the Arts Center’s Legislature considered Legislation. Merger enacted Merger Legislation’s text in the

Because there no indication enlarge the Arts history Legislature intended to Merger exemption, infer that tax we decline Center’s new, immunity. prospective tax Legislation created

V. in our important an role tax immunities serve Government government society. They provision of essential facilitate the private entities to serve and create incentives services However, exemptions from local unauthorized public welfare. that, particular communities unduly burden property taxation can own, agencies. government It is of their are host to no choice subject to governmental imperative that immunities be therefore searching judicial review. regarding the carefully legislative

Having considered the intent immunity, hold that the Authority’s statutory tax we property taxation. exempt from local facilities are and attendant Authori- However, beyond scope of the center is years all under subject to taxation for ty’s exemption and is appeal. part, for an part, affirm in and remand reverse

We therefore liability with our Authority’s tax consistent assessment holding.

100 JR., WALLACE, concurring part

Justice dissenting part.

Except rejects portion prospective exemption, for the that a tax majority opinion. agree Jersey I concur I with with the New Turnpike Authority’s (Authority) Jersey position New Act) Turnpike Authority Legislation (Merger Act or created new, prospective exemption applies years for all after 2003. notes, majority Merger

As the Legislation prompted “[t]he was by McGreevey’s ” Jersey facing Governor concern that New result, ‘fiscal crisis.’ Ante at 918 A.2d at 615. As a Legislature amended the toAct include the (Arts Center) Bank PNC Arts Center in the “[h]igh- definition of way project,” acquisition, operation, which is defined as “the construction, improvement, management, repair, ... and mainte- Jersey nance of Turnpike the New and of the Garden State Parkway, Center, ... and of the State Arts Garden as transferred (codified authority.” 79, § L. c. 8 as amended at Í). N.J.S.A also amended the Act to 27:23— “highway projects” tax-exempt “[transpor- include as a subset (codified 2003, 79, project[s].” §§ tation L. c. as amended at -12). 27:23-4, Further, N.J.S.A. the Act authorized the any person desiring “to any contract with ... part use of [of a highway project] stores, hotels, placing ... for thereon ... offices, restaurants, facilities, any entertainment or for other (codified purpose,” § L. c. as amended at-N.J.S.A. 27:23-9), transfer, sell, of, and to dispose decide whether “[t]o relinquish right, title, otherwise all or interest in the Garden State Center,” 2003, 79, (codified as at N.J.S.A amended 27:23-5(u)). Legislature expressly declared that: granted The exercise of the this act will be in all powers for respects benefit State, the increase of their commerce people living and for

prosperity, of their health and improvement conditions, and as projects and maintenance operation and other transportation property governmental wül constitute the essential performance functions, taxes or assessments upon any not he to required, pay any the shall Authority project or used the under by Authority or any property acquired transportation and any transporiation therefrom, or the income of this act upon provisions project of provisions or used under Authority and acquired by any property under the of provisions income and the bonds issued therefrom, this act and the (including made on the any profit their transfer and the income therefrom act, this Legislature thereof) that all he taxation. The shall exempt sale reaffirms from management, existing and their operations, property, facilities to as Authority, the New authority Jersey transferred governmental and are and essential are deemed authority, public functions local taxes or assessments. exempt from added).] 27:23-12) (codified (emphasis c. as amended at N.J.S.A. [L. clear, language that ail plain Legislature “reaffirmfed] The Authority, ... the ... as existing property facilities public and authority, are deemed essential to the transferred exempt from local taxes or assess- governmental and are functions majority language, reads the ments.” Ibid. Despite that clear Legis- authority” that “the to mean phrase “as transferred to the Turnpike to transfer the Arts Center lature intended immunity enlarging the creating Authority without a new tax 617. I Ante at 918 A.2d at purpose.” Art Center’s agree. cannot Merger Legislation, the Legislature passed the

At the time the by challenge any attempt Holmdel continuing Authority was (Holmdel) impose on the Arts Center. Township taxes to deter- to the Tax Court Appellate Division had also remanded reception center under the Bott “whether the mine use Legislature’s initially- agreement far removed from the is too immunity.” Ante A.2d contemplated warrant tax use to (citation omitted). Thus, the Tax the tax issue was before at 609 Legislation. Merger passed the Legislature when the Court clarify issue view, the tax my Legislature intended by passing the and did so pending before the Tax Court that was that the Arts Legislature declared Merger Legislation. The property any highway project and that used Center was “shall Merger Legislation be provisions of the under the (codified 2008, 79, § 23 as amended exempt from taxation.” declaration, 27:23-12). Legisla- making at N.J.S.A After stating that it “reaffirms intention ture then reinforced its existing property all facilities and ... of ... ... are public governmental deemed and essential functions and are ex- empt from local taxes or Legislature assessments.” Ibid. The could not Merger have been clearer in the Legislation declaring its intention that Center was from taxes. majority takes a different view and states that “it is incongruous to conclude that the an intended to create entirely exemption ‘reaffirm,’ new tax but chose to use the word implies past condition, which confirmation to create that exemption.” above, Ante at 918 A.2d at 616. As noted at the Legislature passed Merger Legislation, time the paid had never taxes to Holmdel for the Arts Center and had challenged attempt impose Holmdel’s taxes. Under those circumstances, Legislature’s the use of the word “reaffirm” was existing, intended to disputed, maintain the then exemp but tax tion.

Finally, disagreeing in my position, majority with notes that Merger Legislation’s “the purpose exclusive mitigate was to. by State’s fiscal reducing crisis administrative inefficiencies.” (citation 99, omitted). Ante at A.2d It seems obvious majority’s rejection of a exemption tax for the Arts Center will opposite Clearly, have the by effect. imposing taxes thp Authority, the first time on it Authority’s will' raise the expenses and create obligations. new financial that,

I Merger Legislation conclude once the becarne in effective Center, including reception center amphitheater, exempt. was tax joins

Justice opinion RIVERA-SOTO in this insofar as Justice WALLACE would tax-exempt confer status on the reception center. RIVERA-SOTO,

JUSTICE concurring part dissenting part. (Arts

The Center), PNC Bank Arts facility Center a originally by Jersey owned Highway Authority New owned now Jersey Turnpike agency the New its successor amphi- major parts: performance (Authority),1 consists two amphitheater and Each of the theater and a center.2 entity under contract operated private is reception center year, Township Authority. Starting the 1996 tax with with the located, (Holmdel), sought to where the Arts Center of Holmdel liability Arts Center. It is impose on the entire real estate history effort, of this placed in context of the rather tortured disparate It is controversy, results advanced. which leads complex is tax- my entirety of the Arts Center view that grants tax-exempt Therefore, majority exempt. to the extent the Center, portion I concur. of the Arts to the status tax-exempt However, majority status to extent the denies Center, portion I dissent. of the Arts center I. Originally, that the entire Arts Center Holmdel asserted 1996, 1997, years subject for the property tax assessment January on comprehensive In a oral decision rendered 1998. Court, Axelrad, straight- 1999, Judge Judge I. of the Tax Francine pursuant Jersey Highway to the New was created in 1952 New Act, Jersey Jersey Highway -26. New N.J.S.A. 27:12B-1 to repealed by operative Highway Authority and its Act was Act, Authority merged Jersey Turnpike N.J.S.A. provisions into the New were 2003, 79, merger, § effecting L. c. 1 session law this 27:23-1 to -47. The 50, legislation,” commonly merger and became effective § referred to as "the 2003, 9, Highway authority Authority July to the of from the the date of transfer 2003, 50; 79, (defining Authority. § Turnpike N.J.S.A. 27:23-4 "Transfer L. c. Date”). 2 formerly the "Garden State Arts as a whole was known as The Arts Center Center," designation N.J.S.A. embedded in the scheme. a that remains Center, (defining as "the Garden State Arts State Arts Center" 27:23-4 "Garden Center, highway project of a the to as the PNC Bank Arts sometimes referred authority"). parlance, Arts Center is understood the PNC Bank In common performance portion encompass amphitheater of the Arts Center. The or the Meyner separately, of Baumle in honor the late Robert center is named (1908-1990), Jersey’s 1962. Governor from 1954 to who served as New

104 forwardly explained that “[t]he ultimate issue that Court must the resolve of Judge is the tax status the Arts Center.” Axelrad explained analysis thusly: the relevant (1) [“]projeet[”] originally whether the Arts Center is a as authorized in the 1952 Highway Enabling and therefore from Statute,3 taxation under exempt 49)]; (2) [(repealed § N.J.SA 27:12B-6 L. 2003, c. if the by 79, not, whether Legislature then ratified the subsequently approved continued construction and of the Arts Center is, the and operation Authority, therefore, from (3) taxation under the above-mentioned and statute; even if it were does exempt, the of the Arts privatization Center, does the use of the Center the

projected use of the Arts Center to the contract or with pursuant [a lease private change change party] nature of the Arts Center and or somehow remove it being [“]projeet,[”] vitiating from a therefore of status the Arts Center. law, upon statutes, She concluded that “[b]ased case [and] [[legislative [h]istory, it is clear to this Court that the Arts [‘]project,[’] Center is a public purpose by [that] it being serves [‘]project[’] within the ambit of public the statute which serves a purpose, expressly exempt that it is pursuant [and] from taxation [(repealed by 2003, 79, 49)].” § to N.J.S.A 27:12B-16 L. c. Appellate rejected Judge Division reasoning Axelrad’s and Twp. Auth., conclusion. v. Holmdel N.J. 329 N.J.Su of 410, per. 412, (App.Div.2000). A.2d Focusing on the nature of private the leases between the and entities for separate operation of and the center, panel explained that “the fundamental issue here is operation whether the complex activities the Arts Center [private party] under the leases are within ‘the boundaries authority delegated'by Legislature agency1 and whether is within use ‘the terms in which the bestowed the 420, immunity.111 [tax] Id. at (quoting Borough 748 A.2d 128 Auth., 414, 422-23, Moonachie v. Port N.Y. 38 N.J. 185 A.2d (1962)). Concentrating on the 1968 amendments to New Jersey Highway Act,4 Appellate disagreed Division § 16, § 3L. c. 1952, 27, 1 to as codified at -26, N.J.S.A. 27:12B-1 to § 2003, 79, L. c. 49. repealed by § § 4L. 1968, 348, 2, § c. as modified c. repealed 49. byL.

105 that, findings the record Judge and concluded on with Axelrad’s certainty developed point, to that it could not determine with reception amphitheater center the use each of the whether 432, meriting exemption. Id. at 748 “project” a tax was panel case to “flesh out the A.2d 128. The thus remanded the at 748A.2d 128. Id. record[.]” remand, temporal scope parties expanded of the On 1996, 1997, litigation original years and 1998 to cover the tax 2000, 2001, 2002, Tax Court years tax and 2004.5 the additional complex— Judge that the entire Arts Center KusMn6 determined reception tax- amphitheater and the center —lost its both the operations change in the nature of the because of a status whole, merger legislation, as a and that the Center 27:23-4, exemption. Twp. not reinstate or revive that N.J.S.A. did Auth., 428, 451-52, Highway 22 N.J.Tax 464 Holmdel v. N.J. 2005). (1) (Tax amphitheater Judge KusMn ordered 1997,1998, years tax-exempt year not for the tax for tax 1996 but (2) 2000, 2001, 2002, was not reception center years Id. at 466. The tax-exempt any of tax at issue. Twp. Holmdel v. N.J. Appellate Division affirmed. Auth., N.J.Super. (App.Div.2006). 388 905A.2d 900

II. majority disagrees part conclusions reached with the Division. Distin- Judge Appellate KusMn and as affirmed center, reception guishing and the between exempt” ampMtheater remains tax majority concludes that “the Ante, 190 subject to taxation.” that “the center but (2007). Thus, majority orders A.2d at 605 N.J. 918 indepen- center” a tax assessment of the “remand for years a reason for the omission The record does not disclose chronological continuum. from Division, interim, assigned Appellate Judge where Axelrad was In the she continues serve. 106 Id. at amphitheater.

dent of the 918 A.2d at 605. As a result majority’s holding, of the the is liable to Holmdel for reception years 1996, real estate on taxes center for the tax 1997, 1998, 2000, 2001, 2002, 2004, years and all tax thereafter. Wallace, concurring part

Justice dissenting in in part, agrees majority amphitheater always with the that the has been Ante, tax-exempt. and should continue be at 918 A.2d at However, that, 618. by Justice operation Wallace concludes merger legislation, including recep- entire Center — tax-exempt tion center —should year be effective the 2004 tax years. Thus, Id. at following for all A.2d 619. Justice Wallace would hold the liable to Holmdel for real estate reception taxes exclusively on center but limited to the tax years litigation preceding at issue in merger this legisla- 1996,1997,1998, 2000, 2001, tion: and 2002.

III. majority To the extent the concludes that portion of the Arts is exempt liability, Center from real estate tax However, I concur. majority the extent the finds that reception portion center of subject the Arts Center is to real by Holmdel, liability estate taxation if temporally even such limited in analysis, accordance with disagree. Justice Wallace’s I disagreement, then, This is limited to the prospec- retroactive and tive tax reception treatment to be accorded the portion center the Arts Center.

A. Judge I return to thoughtful analysis Axelrad’s 1999, bearing in mind that she rendered years her decision five merger legislation before the adopted, legislation same that leads Justice Wallace to conclude that the center is tax-exempt. agree I Judge with plain reading Axelrad’s N.J.S.A. 27:12B-5.1 (repealed by 49), which existing facilities or operation continued provides “[t]he provisions authority not affected shall be activities (emphasis supplied). There is statutory amendments].” [the amphitheater and the operations of no that the both doubt inception prior from their have continued center expand- present, greatly through amendments albeit existing Similarly, merger legislation, “all under the ed role. management, of operations, and property, and their facilities Authority, as Jersey Highway authority the New the and of authority, public and essential to the are deemed transferred exempt to be local taxes governmental functions and are from Thus, supplied). at (emphasis N.J.S.A 27:23-12 assessments.” simple question statutory construc- core, presents a of its this case tion. “ that task is clear: ‘[W]hen in which we address

The manner statute, goal to determine overriding our must be interpreting a ” Zudkewich, NI, v. intent.’ SASCO 1997 LLC Legislature’s the (2001) State, Dep’t 579, 586, (quoting Law A.2d 469 N.J. 767 166 (1995)); Gonzalez, 627, 618, 667A.2d 684 Safety v. 142 N.J. & Pub. 381, of Educ., N.J. Reg’l Bd. 189 v. Toms River Schs. see also L.W. (2007) (“Because 400, question that entails A.2d 535 915 language begin plain interpretation, with the statute’s we —our intent.”) DiProspe (citing discerning Legislature’s polestar in the (2005)). 477, 492, Penn, have A.2d 1039 We ro 183 N.J. v. “ ‘[o]rdinarily, language statute is the explained that ” NI, Legislature’s SASCO 1997 indicator of the intent.’ surest Zudkewich, 586, (quoting supra, A.2d 469 166 N.J. at LLC v. 231, Barow, 218, Cornblatt, A.2d 401 J. P.A. v. 153 N.J. Alan “ clearly (1998)). here, When, language plain and reveals as ‘the is statute, function is enforce the court’s sole meaning of the Ibid, (quoting with those terms.’” statute accordance 646, 651, State, Safety 119 N.J. Bigham, Pub. v. Dep’t Law & (1990)). legislative the overall also consider “[W]e 575 A.2d 868 ibid, 452, seheme[,]” Freightways, 140 N.J. (citing v. Fiore Consol. “ (1995)), 466, task is to harmonize because ‘[o]ur 659 A.2d 436 way is most in the that and read the statute individual sections ibid, legislative intent[,]’” consistent with overall (quoting Fiore, supra, 140 N.J. 466, 436). 659 A.2d

Judge that, originally explained Axelrad albeit in a more limited present, form than at the Arts Center existed as of the 1968 Jersey Highway Act, amendments New specifi cally adoption of N.J.S.A. L. (repealed by 27:12B-5.1 c. 49). ,“[e]ven § ‘project’ She noted that if the term as defined original may act not contemplated Center, have the Arts plain ... N.J.S.A. reading L. [(repealed by 27:12B-5.1 c. 49)] 79, § hearings and the Commission surrounding its enact suggest ment[} ratified the continued con operation struction Authority.” the Arts Center She “by ratifying reasoned that the Arts [‘]project[’] Cénter as a under 27:12B-5.1, J.S automatically followed, [N. .A.] it having without statute, it in [‘]project[’] mention ... from pursuant taxation express language of N.J.S.A. 27:12B-16 [(repealed 49)].” improve Judge I cannot analysis, on reasoning, Axelrad’s conclusions, save to supplement further it unambiguous with the language of merger legislation adopted years five after she reached her decision. I too to subscribe the view that the Arts including component its parts amphitheater an and a Center — a “project” center —constitutes as defined in the now- 27:12B-3(d) repealed N.J.S.A. (defining “project” to include “such adjoining park or recreational directly areas and facilities related express to the use of highway, the superhighway motorway or as authority, the with the Department concurrence of the of Environ- Protection, mental necessary shall find to be and desirable for the convenience and highway comfort of users of project and act”) development feasible for pursuant L. (repealed by to this 49). 2003, 79, § majority notes, c. As the “[c]onstruction of the Ante, Arts completed 79, Center was in 1968.” 918 A.2d at 606. Hence, was, the Arts point, exempt Center at that from all forms N.J.S.A. 27U2B-16 49). of taxation. L. (repealed by 79, § c. Judge noted, again entirely agree, Axelrad and I that after the constructed, adopted Legislature Arts Center Act, Authority Jersey Highway specifi- to New amendments 49), by § (repealed L. c. which cally 27:12B-5.1 N.J.S.A. existing facili- operation of plainly provided that continued “[t]he by by authority shall not be affected ties or activities sup- statutory (emphasis provisions amendments].” [the Thus, repeal Jersey the 2003 of the New plied). at least until legislation, merger Authority adoption of the Highway Act and the including the and the entire Center — tax-exempt. center —was by explicit language supported is conclusion further

This highway all matters Legislature it consolidated when used merger Jersey pursuant to the Turnpike under the New 79, § 1 at N.J.S.A. as codified legislation. legislation, sup- which adopting merger to -47. 27:23-1 Jersey concerning the New scheme planted the earlier statutorily Legislature defined the Arts Authority, the authority.” N.J.S.A 27:23-4. highway project of the as “a Center include “the “highway project” specifically defined a It also park any “adjoining and as Arts Center” well as Garden State facilities, directly indirectly related to areas and recreational authority find to be transportation project as the shall of a the use merg- Finally, necessary N.J.S.A. 27:23-4. desirable[.]” and exemption from taxation section legislation amended er that all exist- Turnpike “reaffirm[ ] Act to Jersey New management operations, ing property, and their facilities ... from are Jersey Highway ... of the New language N.J.S.A. 27:23-12. or assessments.” local taxes tax-exempt telling: “reaffirms” the it used is Center, Legisla- thereby making that the clear of the Arts status “operations[ its ] while intended Arts Center ture all the tax-exempt. management” be B. that, explained the Arts Center Judge also “because Axelrad pursuant to the [‘]project,[’] it be from taxation should a lio

express language [(repealed of by N.J.S.A. 27:12B-16 79, 49)], something unless has ... which occurred would vitiate ability express Rely exemption.” or remove that to obtain ing principle” “property employed primarily on the “basic that public immunity for a use does not lose [from taxation] because agency incidentally private derives some business income it[,]” Borough Auth., from v. Moonachie Port N.Y. N.J. of of 414, 426-27, (1962), 185 A. 2d Judge Axelrad found that the ability Arts Center’s offer entertainment and recreational ac clearly public Properly dismissing tivities conferred a benefit. objection earning the Arts Center was as a income activities, “monetary result of these she noted that considerations character, change ... do not the fact that the State Garden use, public public for Center was used for ... benefit continuing purposes agree it’s to be used for those after [the private parties ments Adopting with the executed].” were argument by Authority, advanced Judge explained Axelrad expansion amphitheater center, that the of the and the facilities, engagement private parties and the of run these facilities, “an enhancement services and as well as an enhancement of revenues that can be purposes used for other for recreational public, uses the benefit of the which recipient intended under the Act.” sum, Judge Axelrad concluded that “the Arts Center as a project Authority, public purpose serves a ... and that public purpose privatized[.]” is not lost Judge fact that it’s concluded, concur, Axelrad I concept a,public “the purpose that, is a broad one” presented, in the circumstances the activities at the Arts Center’s provide public See, center use tax-exempt. e.g., and should be S. Jersey Transp. Pleasantville, v. City Auth. N.J.Super. (App.Div.1998) (holding, parallel A.2d 215 under scheme, private that monies parties received from for use of placed authority adjacent highway billboards on land nonethe taxation). statutorily exempt less were from

Ill in she did Judge her decision Because Axelrad rendered legislation speak merger and its opportunity to not have on controversy. Wallace relies on this To extent Justice effect is entire Arts Center merger legislation to conclude view, taxation, However, my merger in from I concur. exempt entirety of the legislation my conclusion that the reinforces earlier reception amphitheater and center included —was Arts Center — Thus, only inception. its tax-exempt from because Justice Wallace I reception prospectively, applies exemption the tax center join portion opinion his not retroactive- cannot in that does reception ly grant exemption a tax for the center.

IV. amphitheat- majority distinguishes up, To between sum Center, reception portions of the Arts and holds that center er and portion but that the amphitheater is from taxation agrees subject is to taxation. Justice Wallace center amphitheater inception, from portion tax-exempt its but that the that, merger legislation, of the asserts virtue tax-exempt year I concur acquired status as 2004. center majority opinion and Wallace’s parts those Justice with grant tax-exempt status concurrence that However, majority to the extent the portion of the Center. retroactively retroactive prospectively and, a lesser both — recep- deny tax-exempt only, status to extent Justice Wallace — Center, portion I of the Arts dissent. tion center IV.A) (Part Justice part & For reversal in remandment —Chief RIVERA-SOTO, LONG, WALLACE, ZAZZALI and Justices HOENS —5. IV.B) (Part part remandment For & —Chief affirmance LONG, ZAZZALI

Justice and Justices WALLACE HOENS —4. IV.B) (Part

For reversal & remandment RIVERA- —Justice SOTO—1. (Part C) part

For & remandment IV. affirmance —Chief Justice ZAZZALI and Justices LONG HOENS —3. (Part IV.C)

For Reversal & remandment WALLACE —Justices RIVERA-SOTO —2. 918 A.2d 625 GEN, IN THE MATTER OF SAMUEL AN ATTORNEY (ATTORNEY 004411994). AT LAW NO. April 2007. ORDER Attorney of having Office Ethics moved before the Disci- plinary pursuant Review Board reciprocal Rule 1:20-14 for discipline YORK, YORK, SAMUEL GEN of NEW NEW who was admitted to the Bar of subject this State in and who was an order of vo disbarment New York based on violations RPC 8.4(b) (criminal act adversely lawyer’s reflects on honesty, lawyer trustworthiness or fitness respects), as a in other RPC (conduct 8.4(e) fraud, dishonesty, involving misrepresen- deceit tation), (conduct 8.4(d) prejudicial and RPC to the administration justice); Disciplinary

And the having Review Board concluded light presented herein, circumstances permanent disbar- ment was not respondent subject warranted and that should be discipline parallel to imposed by York, the sanction New where a attorney disbarred may seek restoration of his or her license after passage years; of seven

Case Details

Case Name: Township of Holmdel v. New Jersey Highway Authority

Court Name: Supreme Court of New Jersey

Date Published: Apr 4, 2007

Citation: 918 A.2d 603

Court Abbreviation: N.J.