$676K tax refund, lack of disclosure at issue
Councilman: Tower Center refund may affect 2008 budget
BY VINCENT TODARO Staff Writer

EAST BRUNSWICK - Tower Center II has been awarded a $676,000 tax refund, and at least one council member is upset that it was not made public.

The refund was agreed upon in October, but Councilman David Stahl said it was only after he inquired that the Township Council received notification. He is concerned about the effect the refund will have on the 2008 municipal budget.

The settlement calls for Tower Center II, on Route 18, owned by the Tower Center Investment Group, to be refunded for overpayments in 2005, 2006 and 2007. The township will refund the center about $185,000 for 2005, $279,000 for 2006 and $212,000 for 2007, Stahl said. If the township pays within 60 days of the settlement date, no interest will be added.

The refund amounts to about 3 cents per $100 of assessed value on the tax rate, Stahl said, adding that although Tower Center I never filed an appeal, and will not receive a refund, its assessment will be lowered by the same amount.

That means the township will be out even more revenue in 2008, he said.

The township will use money in a tax reserve to pay back the $675,000.

Council President Nancy Pinkin said the refund is a "big loss" for East Brunswick.

She said that East Brunswick, unlike South Brunswick, does not have major new business ratables such as warehouses, so the tax base is limited. Also, she said, because of the low residential assessed values - the township has not been revaluated since the mid 1980s - businesses are able to successfully appeal their tax assessments.

The settlement amounts to a large assessment change for Tower Center II, which in the past has been touted as a cash cow for East Brunswick. The 2005 assessment was dropped to around $22.6 million, the 2006 figure to roughly $20 million, and the 2007 number to about $18 million.

Stahl figured that the overall assessment reduction since 2004 amounts to about a $6 million, or about 25 percent.

"So you've seen a large shrinkage," he said, noting that the change means a greater reliance on residential property taxes.

He asked the administration what impact the loss will have on residential taxes in 2008 and beyond.

During Monday night's Township Council meeting, Stahl asked Mayor William Neary why he didn't announce the news, considering the settlement was reached on Oct. 5. Neary did not respond.

Stahl said that, by ordinance, the township authorizes the tax office to settle all appeal cases. However, he feels the ordinance should be amended so that, if an appeal reaches a certain threshold, it must be brought before council for approval. He noted that the administration is not authorized, for example, to purchase a new police car without council consent, "yet we have the administration being able to settle a $675,00 case without council approval.

"It's illogical," he said.

Stahl said he was also upset that Neary did not make the settlement known to the public.

"It reminds me of the subordination agreement," he said. That deal placed the township second in the refund line, in case of default, to the bank that issued a loan to Toll Brothers to purchase the Golden Triangle property from the township.

"Just bury it in the file," Stahl said.

He said the only reason he found out about the tax settlement is because he asked Township Business Administrator James White what happened regarding the appeal. Stahl was given a copy of the settlement, and it then appeared in this week's council packets. If he hadn't asked, Stahl said, the council would not have been told about it.