NJ Supreme Court to hear property tax case about Ursino restaurant.
By Erin McGuinness | Published by November 13, 2019
The battle over whether Ursino Steakhouse and Tavern are subject to property taxes is now going to the state Supreme Court.
The New Jersey Supreme Court will hear the Township of Union’s appeal in the case of Gourmet Dining LLC vs. Union Township.
Ursino, a full-scale restaurant attached to Kean University’s New Jersey Center for Science, Technology, and Mathematics, was exempt from property taxes when opening in 2011 because of its location on a state college campus. As a public university, Kean and all government properties in New Jersey are exempt from local property taxes.
The restaurant space is leased from Kean University by Gourmet Dining LLC in tandem with the Kean University Foundation.
Representatives from Union Township argue that since the restaurant is leased to a for-profit entity, it should be subject to property taxes like other Union eateries. Ursino is not one of the university’s regular dining services for students.
“We look forward to the Supreme Court clarifying this issue and ensuring all public universities of their important tax-exempt status,” said Margaret McCorry, Director of Media Relations for Kean University. “It is vital that public universities retain the ability to utilize their property for university purposes.”
In 2012, the Union County Tax Assessor declared it would be “assessing Gourmet Dining local
property taxes for the restaurant facility because it is operating the restaurant on property leased from the University and the subject property is not exempt from local property taxes,” according to Justia US Law.
The foundation and the university have been in a management agreement over the restaurant since 2011. The foundation is in a Management Subcontract Agreement with Gourmet Dining LLC, which operates the restaurant on a day-to-day basis.
The restaurant was assessed for $53,915 in taxes, according to nj.com.
Gourmet Dining LLC challenged the assessments to the Union County Board of Taxation for 2013 and 2014 and was later taken to Tax Court, where Kean University and the New Jersey Educational Facilities Authority joined the litigation. Tax Court did not reconsider.
The case was heard by the Superior Court of New Jersey Appellate Division in May 2019. It was concluded that Ursino serves a public purpose and is exempt from local property taxation. Employed students and scholarship funds were taken into consideration when making this decision, according to Judge Joseph Yatonni.
Gourmet Dining pays a portion of revenue to the foundation to be used for Kean scholarship programs. Six Kean students are employed at the restaurant, according to a Ursino employee.
“We are pleased on behalf of the Township of Union that the New Jersey Supreme Court has agreed to hear our appeal and look forward to having the opportunity to address the Court on the important issues presented by this case,” said Robert Renaud, Counsel for Union Township.
The New Jersey Supreme Court will hear the case and confirm a final decision.