Turner Bill To Shut Tax Loopholes For Private Clubs Passes Both Houses

TRENTON – A measure sponsored Senator Shirley K. Turner that would close loopholes in the historical preservation laws that may allow a private club at Princeton University to gain tax exempt status passed the Senate today.

“The historical preservation laws allow for property tax exemptions to help out non-profit organizations seeking to preserve notable building for the education of generations to come,” said Senator Turner, D-Mercer. “They were not meant to free private organizations from their responsibility to the community simply because they occupy an old building. I wish this law was unnecessary, but unfortunately there will always be someone looking for a free ride at the expense of the community.”

Senator Turner’s bill, S-1584, seeks to close the loopholes in the current law that has allowed a number of entities to obtain historic site property tax exemptions when in fact the buildings are not being managed as historic sites. The impetus for this bill was an application by the Cottage Club to get historic preservation status. That application was fiercely opposed by Princeton Borough officials and denied by the Department of Environmental Protection. The decision is currently on appeal.

Senator Turner noted that the Cottage Club, a private Princeton University “eating club” seeking a historic site tax exemption, currently pays more than $50,000 a year in property taxes. If the club were to gain tax exempt status, it would create a precedent that would likely be followed by Princeton University’s 11 other eating clubs. In total, Princeton Borough stands to lose over $500,000 in revenue each year.

“I don’t know of anyone who can testify that these clubs are in the business of sharing with the general public the historic significance of their buildings. Quite simply they are social clubs for the wealthy and well-connected who think it is alright to shirk their responsibility to the community. We simply can’t allow these clubs to evade the taxes they owe Princeton Borough for the municipal services they enjoy,” said Senator Turner.

The bill would amend current law to impose more stringent requirements in order to qualify as a historic site. Among the most important requirements are that the building be open to the general public and freely available to all people without discrimination as to race, creed, color or religion, for a minimum of 96 days a year as well as stricter annual reporting by the nonprofit organization managing the building. These requirements would not be required of certain organizations that have already qualified for historical preservation property tax exemptions.

“The goal of this bill is not to put an undue burden on legitimate organizations seeking to simply keep the doors of these treasures open to the general public. But the actions of a greedy few now compel us to implement these more robust requirements,” explained Senator Turner.

The bill passed the Senate by a vote of 30-7. It also passed the Assembly today by a vote of 69-2 and now heads to the Governor’s desk for his signature.