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Borough of Englewood Cliffs v. Allison’s Estate, 69 N.J.Super. 514, 174 A.2d 631

Facts

The trustees of the estate of William O. Allison owned a tract of land in Englewood Cliffs known as Allison Park, which was developed for public use and assessed at $52,065 for the year 1959. The borough appealed to the State Division of Tax Appeals after the county board of taxation had exempted the property from taxation. The will of Mr. Allison expressed his intention to maintain and develop the Palisades along the Hudson, and the property was subject to public rights, making it virtually unsaleable for commercial purposes.

Trustees under the will of William O. Allison have for many years owned a tract of land in Englewood Cliffs. This tract is known as Allison Park and contains a total of 7.808 acres.

Issue

Whether the property known as Allison Park should be assessed for taxation at its full commercial value despite the restrictions imposed by the will of the testator limiting its use to that of a public park.

Whether the property assessed has no substantial market value, being limited to use as a public park and therefore unsaleable.

Rule

The court determined that the true value of property for tax assessment purposes must account for any restrictions on its use that diminish its market value, including public rights that limit the owner's ability to sell the property.

The State Division disposed of this contention by holding that, in the absence of statutory exemption, restrictions on use which may destroy or impair possibility of sale cannot be allowed to become what amounts to an owner-created exemption.

Analysis

The court analyzed the implications of the will's restrictions on the property's marketability, concluding that the public rights associated with Allison Park significantly reduced its value. The court emphasized that the assessment should reflect the property's limited use as a public park rather than its potential commercial value if unrestricted.

The State Division correctly concluded that Allison Park is not exempted by statute from local real estate taxation.

Conclusion

The court modified the judgment of the Division of Tax Appeals, concluding that the assessment of $52,065 was erroneous and that the property should be assessed at a lower value reflecting its limited marketability.

Judgment of Division of Tax Appeals modified.

Who won?

The trustees prevailed in part, as the court modified the tax assessment to reflect the property's limited market value due to public rights, rather than its full commercial value.

The court modified the judgment of the Division of Tax Appeals, concluding that the assessment of $52,065 was erroneous and that the property should be assessed at a lower value reflecting its limited marketability.

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