Red Bulls Stadium in Harrison, NJ. Photograph courtesy of Wikipedia.

June 14, 2014 (Harrison, NJ) The New Jersey Appellate Division has upheld the decision of the Tax Court that the Red Bulls Soccer Team must pay the Town of Harrison property taxes for the Red Bull Stadium. Harrison Tax Assessor, Hudson County Freeholder and Harrison's Public Defender Albert Cifelli had accessed the Red Bulls property taxes in 2010 and the owner of the Red Bulls,Dietrich Mateschitz , contended that the the Red Bulls were not the owners of the stadium property and the lease between the Harrison Redevelopment Agency and the Red Bulls did not provide for a payment of property taxes. A provision in the lease provided for indemnification if someone contended that the property was taxable. Litigation insued and the New Jersey Tax Court found that the Red Bulls effectively were the property owners and owed the property tax. The Red Bulls appealed to the Appellate Division.

At stake are over 1.3 million dollars in yearly taxes. The Appellate Division decision upheld the Tax Court but on separate grounds. The Appellate three judge panel composed of Judge Marie P. Simonelli,Judge Douglas M. Fasciale and Judge Michael J. Haas analyzed other redevelopment agency laws including the New Jersey Sports and Exposition Authority Law and the Hackensack Meadowlands Reclamation and Development Act before reaching it's conclusion that the Red Bulls were not exempt from the payment of property taxes despite not being the owners of the property on which the Red Bulls Stadium sits.

The Appellate Division Judges began their analysis with the principle that "all real property in New Jersey is subject to taxation unless expressly exempted by the Legislature." The Appellate Division then analyzed the provisions of the New Jersey Sports and Expositoin Authority Law which built Giant Stadium and the Met Life Stadium and the Meadowlands Sports Complex as well as the Hackensack Meadowlands Reclamation and Development Act. Ultimately, the Appellate Judges found that "there is no [property tax] exemption unless the property is devoted to the public use contemplated by the exempting statute" and the provisions in the legislation establishing the Hudson County Improvement Authority and the Harrison Redevelopment Agency did not contemplate the operation of a sports stadium but only authorized the clearing of under utilized property to be redeveloped including the building of a sports stadium but not the operation of same.

The last few paragraphs of the Appellate Division's decision set forth the rationale for upholding the Tax Court's decision be it on other legal grounds:

"Although operation of the stadium may serve the specific public purpose described in the Sports Authority Law and Mc Crane, it does not serve the specific public purposes described in the Authorities Law or Redevelopment Law, the statutes pursuant to which the stadium was constructed. Holmdel, supra, 190 N.J. at 95; Walter Reade, supra, 36 N.J. at 441. Unlike the Sports Authority Law, neither the Authorities Law nor Redevelopment Law authorize the Authority or Agency to construct, acquire, own, manage, construct, or operate a sports stadium for professional athletic teams. Rather, the Authority and Agency are only authorized to redevelop the redevelopment area, meaning acquiring and clearing the land, as well as the planning and construction phases of the 1 998 Plan and 2003 Plan, not the actual operation of a stadium or any other commercial establishment that the 1 998 Plan and 2003 Plan eventually attracted.

We recognize that the Authorities Law authorizes the Authority to operate public facilities for public recreation and entertainment; however, Red Bull operates the stadium privately for its own economic benefit, not for recreation or activities freely open to the general public. Notwithstanding the Town's right to use the stadium for four civic events per year, or the Agency's ability to use the stadium for events open to the general public, those uses are subordinate to Red Bull's rights and do not convert the stadium to a public use as contemplated by the Authorities Law and Redevelopment Law.

Unquestionably, attracting a major league soccer team was a major part of the redevelopment plan. Nevertheless, Red Bull's actual operation of the stadium exceeds the Authority's and Agency's statutory mandates. Accordingly, because the property is not used for a statutorily authorized public purpose, it is not tax exempt."

Attorney Norman A. Doyle, Jr., who passed away, on December 20, 2013, after a long time fight with stomach cancer represented the Town of Harrison in the Red Bulls tax appeal. The Red Bulls case will be part of Norman Doyle's legacy as a knowledgeable local attorney whose scholarly legal work on behalf of his clients changed many persons lives and this case decided in the Town of Harrison's favor will be part of that legacy. The Town can use the additional 1.3 million dollars to lessen the tax burden on local property owners.

The Red Bulls is owned in part by Dietrich Mateschitz whose net worth in 2012 was estimated at 5.3 billion dollars. Mr. Mateschitz is #141 on Forbes Magazine's Billionaire's List. It is not clear whether the Red Bulls will be appealing the decision and some prior years property taxes had been paid pending the appellate process.

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