NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4799-17T3

GOURMET DINING, LLC,

Plaintiff-Appellant,

v.

UNION TOWNSHIP and NEW

JERSEY EDUCATIONAL

FACILITIES AUTHORITY,

Defendants-Respondents,

and

KEAN UNIVERSITY,

Defendant-Appellant.

______________________________

Argued April 2, 2019 – Decided May 31, 2019

Before Judges Yannotti, Rothstadt and Natali.

On appeal from the Tax Court of New Jersey, Docket 

Nos. 16504-2013 and 12334-2014.

Robert F. Giancaterino argued the cause for appellants 

(Skoloff & Wolfe, PC, attorneys; David B. Wolfe, 

Barbara A. Schweiger and Rebecca L. Hutcheon, on 

the briefs).

APPROVED FOR PUBLICATION

May 31, 2019

APPELLATE DIVISION
A-4799-17T3 2

Robert F. Renaud argued the cause for respondent 

Union Township (Renaud DeAppolonio, LLC,

attorneys; Robert F. Renaud and Adam J. Colicchio, 

on the brief).

Jamie M. Zug, Deputy Attorney General, argued the 

cause for respondent New Jersey Educational 

Facilities Authority (Gurbir S. Grewal, Attorney 

General, attorney; Melissa H. Raksa, Assistant 

Attorney General, of counsel; Jamie M. Zug, on the 

brief).

The opinion of the court was delivered by

YANNOTTI, P.J.A.D. 

Gourmet Dining, LLC, operates a restaurant in a building on the campus 

of Kean University (the University) in the Township of Union (the Township). 

The Tax Court held that the premises where Gourmet Dining operates the 

restaurant are subject to local property taxes. Gourmet Dining and the 

University appeal from the Tax Court's judgment affirming the assessments 

and the court's order denying their motion for reconsideration. For the reasons 

that follow, we reverse.

I.

In 2004, the University established a program to meet the State's need 

for qualified science and mathematics teachers and scientific researchers, and 

decided to construct a building on its campus to house the program. The 

University financed the construction of the building through the New Jersey 
A-4799-17T3 3

Educational Facilities Authority (the Authority), an entity authorized to 

finance the construction of facilities by public institutions of higher education

in this State. See N.J.S.A. 18A:72A-5(k). The University and the Authority 

entered into a Lease and Agreement, dated December 1, 2005 (the Financing 

Agreement). 

In the Financing Agreement, the Authority agreed to issue tax-exempt 

bonds and provide the proceeds from the sale of the bonds to the University for 

the construction of the building. To ensure repayment of the principal and 

interest on the bonds, the University agreed to convey title to the property to 

the Authority. In exchange, the Authority agreed to lease the property to the 

University for a period of thirty years, or until the bonds are fully paid, at 

which time the Authority would re-convey title to the University. 

The University constructed the building with funds provided by the 

Authority pursuant to the Financing Agreement. The building is known as the 

New Jersey Center for Science, Technology and Mathematics (NJCSTM). The 

NJCSTM was ready for use in September 2010. It included space for a fullscale restaurant, which is open to the public. 

In June 2010, the University's Board of Trustees (the Board) adopted a 

resolution, which authorized the Kean University Foundation, Inc. (the 

Foundation) to complete the restaurant project and engage an experienced 
A-4799-17T3 4

manager to operate the restaurant. The Board's resolution stated that "a 

minimum of [ten] percent of the restaurant's gross revenues [shall] annually be 

allocated for scholarship purposes within the Foundation."

In October 2011, the University and the Foundation entered into a 

Management Agreement, which granted the Foundation the "exclusive right to 

operate, manage and control" the restaurant for a ten-year period. The 

Management Agreement authorized the Foundation to subcontract its rights to 

a person or entity with extensive experience and expertise in the restaurant and 

catering business. 

That same month, the Foundation and Gourmet Dining entered into a 

Management Subcontract Agreement (MSA), which grants Gourmet Dining 

"the exclusive right to operate, manage and control" the restaurant facility in 

the NJCSTM for a ten-year period. The MSA designates Gourmet Dining as 

the "exclusive manager" of the restaurant, and states that it has responsibility 

for "all reasonable, necessary and advisable management and operational 

services[.]" 

Under the MSA, Gourmet Dining has sole responsibility for hiring 

employees and for all expenses related to the restaurant facility, including food 

costs, inventory expenses, salaries, maintenance, and normal janitorial 

services. In exchange for these responsibilities, Gourmet Dining agreed to pay
A-4799-17T3 5

the Foundation an annual management fee of $250,000 for the first nine years

of the Agreement, and $500,000 for the tenth year. Gourmet Dining also 

agreed to pay the Foundation 12.5 percent of the gross revenues derived from 

the operation of the restaurant, which is called Ursino Steakhouse & Tavern 

(Ursino). The restaurant opened for business in October 2011. 

By letter dated August 27, 2012, the Township's Tax Assessor advised 

Gourmet Dining that the Township 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. The Tax Assessor stated that Gourmet Dining 

would be required to pay property taxes on the "restaurant portion" of the 

building for 2011 and 2012. 

Gourmet Dining did not challenge the property tax assessments for 2011 

or 2012, but later filed petitions of appeal with the Union County Board of 

Taxation (Tax Board) challenging the assessments for 2013 and 2014. The 

Tax Board dismissed the petitions, and Gourmet Dining filed timely 

complaints with the Tax Court, challenging the Tax Board's judgments. 

Thereafter, the Township filed a motion for summary judgment, arguing 

that Gourmet Dining was required to pay local property taxes on the portion of 

the NJCSTM where it operates the restaurant. Gourmet Dining filed a cross-
A-4799-17T3 6

motion for summary judgment and argued that it is exempt from local property 

taxes on various grounds. The University joined in the cross-motion. The Tax 

Court required that the University and the Authority be joined as necessary 

parties to the litigation. 

Thereafter, the Tax Court filed an order dated March 14, 2018, which 

granted the Township's motion and denied the cross-motion, for the reasons 

stated in a written opinion that is reported as Gourmet Dining, LLC v. Union 

Twp., 30 N.J. Tax 381 (Tax 2018). Gourmet Dining thereafter filed a motion 

for reconsideration of the court's order. The court filed an order dated May 31, 

2018, denying reconsideration. This appeal followed.

II.

On appeal, Gourmet Dining and the University argue that the Tax Court

erred by granting the Township's motion for summary judgment. They 

contend the court should have granted the cross-motion for summary judgment 

because the premises in the NJCSTM where Gourmet Dining operates the 

restaurant are not subject to local property taxes. 

We note initially that when reviewing a trial court's order granting or 

denying summary judgment, we apply the same standard that governs the trial 

court. Lee v. Brown, 232 N.J. 114, 126 (2018) (citing Steinberg v. Sahara 

Sam's Oasis, LLC, 226 N.J. 344, 349-50 (2016)). Summary judgment shall be 
A-4799-17T3 7

granted when there is no genuine issue of material fact and the moving party is 

entitled to judgment as a matter of law. R. 4:46-2(c). Here, the material facts 

are not in dispute, and the question raised on appeal is whether the court erred 

by finding as a matter of law that the property at issue is subject to local 

property tax. 

We review the trial court's legal determination de novo. Templo Fuente 

De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 

(2016). In doing so, we owe the trial court no deference on its "interpretation 

of the law and the legal consequences that flow from established facts." 

Manalapan Realty v. Twp. Comm., 140 N.J. 366, 378 (1995). 

Gourmet Dining and the University first argue that the premises in the 

NJCSTM where the restaurant operates are exempt from local property taxes 

under N.J.S.A. 54:4-3.3. The statute provides in pertinent part that the 

property of the State, its counties and municipalities, and their agencies and 

authorities, are exempt from local property taxes when the property is "used 

for public purposes." Ibid.

The statute does not define the term "used for public purposes," but the 

statutory language requires "something more than ownership." Cty. of Bergen 

v. Borough of Paramus, 79 N.J. 302, 306 (1979). "[I]n addition to public 
A-4799-17T3 8

ownership there must be public use." Id. at 307. Our Supreme Court has 

explained that:

[t]he concept of public purpose is a broad one. 

Generally speaking, it connotes an activity which 

serves as a benefit to the community as a whole, and 

which, at the same time is directly related to the 

functions of government. Moreover, it cannot be 

static in its implications. To be serviceable it must 

expand when necessary to encompass changing public 

needs of a modern dynamic society. Thus it is 

incapable of exact or perduring definition. In each 

instance where the test is to be applied the decision 

must be reached with reference to the object sought to 

be accomplished and to the degree and manner in 

which the object affects the public welfare.

[City of Newark v. Essex Cty. Bd. of Taxation, 54 

N.J. 171, 187 (1969) (quoting Roe v. Kervick, 42 N.J. 

191, 207 (1964)).]

Here, the Tax Court correctly found that the subject property falls 

within the purview of N.J.S.A. 54:4-3.3 because it is either the University's or

the Authority's property.

1

 Gourmet Dining, 30 N.J. Tax at 410. The court 

found, however, that Gourmet Dining and the University failed to establish the 

property was used for "public purposes" in the relevant tax years. Ibid. The 

 

1 We note that the University's agreement with the Authority required the 

University to transfer title to the NJCSTM to the Authority, and the Authority 

would lease the property to the University. For reasons not clear from this 

record, the University did not transfer title to the Authority until 2015. In 

either case, the subject property is owned by either a State University or the 

Authority. 
A-4799-17T3 9

court essentially found that the evidence shows that the subject property is 

being used for a private, rather than a public purpose. We disagree with the 

court's conclusion. 

In a certification submitted to the Tax Court, Philip Connelly, the 

University's Vice President for Administration and Finance and Executive 

Vice President of Operations, stated that the NJCSTM building was intended

and ultimately designed to be a visual landmark, that would provide space for 

many of the University's needs. He stated that the building was intended to 

show that the University is "a forward-looking, world-class institution with 

state-of-the-art facilities[.]"

Connelly also asserted that the Board's goals for the restaurant "were 

multi-faceted." He stated the University wanted to have a restaurant that could 

generate income for its scholarship programs, and an in-house caterer for 

events that required more upscale food than its dining services customarily 

offer. He explained that presence of "a relatively upscale and criticallyacclaimed restaurant facility at the NJCSTM would serve as a visible sign to 

the wider public of [the University's] emergence as [a] forward-thinking, topnotch university with state-of-the-art facilities." 

Connelly further commented that since the restaurant began operations 

in December 2011, it has generated more than $377,000 for scholarships the 
A-4799-17T3 10

Foundation has awarded to University students. The restaurant provided more 

than $134,000 in 2012 and more than $128,000 in 2013 for the scholarship 

programs. Connelly stated, "These are significant amounts, and the money the 

restaurant has generated for [the University's] scholarships has enabled [the 

University] to attract quality students who otherwise may not be able to afford 

to attend [the University], and who are an asset to [the University] 

academically, among other ways."

Connelly also stated that the restaurant has been "a valuable tool" for 

communicating with the public "about its successes and the opportunities it 

offers in order to attract quality students." He noted that the restaurant had 

received critical acclaim in certain publications with wide circulation, thereby 

"garnering attention for [the University] as well." 

In addition, Connelly asserted that the restaurant has attracted many 

visitors to the campus, and these visitors might not otherwise have known of 

the University. Connelly further commented that the restaurant will purchase 

produce grown on the University's property, and provide food-scrap waste that 

will be used in the University's composting laboratory. Faculty and students

used the finished compost in on-going research.

Nick Davidson, manager of the restaurant in 2013, also submitted a 

certification to the trial court, in which he stated that students frequently come 
A-4799-17T3 11

to the restaurant for lunch and often partake of the "bar menu," which is a less 

expensive option for students. Parents of the University's students also are 

regular patrons of the restaurant. Davidson also stated that during his time at 

the restaurant, about eighty-five percent of its employees were students of the 

University. 

In its opinion on the summary judgment motions, the Tax Court

recognized that operating a dining hall, cafeteria, or other food service 

establishment for students, administrators, and others is a recognized purpose 

of a public university or college. Gourmet Dining, 30 N.J. Tax at 404. The 

court noted, however, that Ursino is not one of the six dining service locations 

available to students or other members of the University community, and the 

restaurant is not generally available under the University's traditional meal 

plans. Id. at 403-04. 

The court reasoned that Ursino is no different from any other restaurant, 

bar, or tavern in the Township. We are convinced, however, that the court 

took an unduly narrow view of the facts. The restaurant is unique because it is 

located on-campus. The record shows that the University's students and their 

parents regularly dine at the restaurant. Moreover, the University views the 

restaurant as an important recruiting tool for students and faculty.
A-4799-17T3 12

Although the restaurant is not part of the University's traditional meal 

plan, Ursino is different from other restaurants, bars, or taverns in the 

Township because it provides students, other members of the University 

community, and visitors to the campus an alternative dining experience. The 

restaurant offers an alternative approach to on-campus dining, which

traditionally has been limited to meal plans and cafeterias. As we noted 

previously, the concept of a public purpose "must expand when necessary to 

encompass changing public needs of a modern dynamic society." City of 

Newark, 54 N.J. at 187 (quoting Roe, 42 N.J. at 207). 

The Tax Court also found that although Gourmet Dining pays annual 

management fees to the Foundation, which are used for University 

scholarships, the payment of the fees does not warrant the conclusion that the 

subject property is being used for a public purpose. Gourmet Dining, 30 N.J. 

Tax at 407. The court stated that a private, for-profit entity should not be 

entitled to a local property tax exemption merely because part of its gross 

revenue stream is paid to a public entity and then allocated to that public 

entity's purpose. Ibid.

 However, the record shows that the restaurant is not merely providing a 

revenue stream to the University that is used for general purposes. The 

restaurant provides revenues that are specifically earmarked for scholarships 
A-4799-17T3 13

for University students. Indeed, the Board, in its resolution authorizing the 

Foundation to complete the restaurant project at the NJCSTM, expressly 

required that at least ten percent of the restaurant's revenues must be allocated 

to University scholarships. The Foundation's use of the revenue derived from 

the restaurant for scholarships provides further support for the conclusion that 

the subject property is being used for a public purpose. 

The Tax Court also rejected the contention that the use of the subject 

property is for a public purpose because the University claims the restaurant 

raises the University's public profile. Id. at 408, 410. In doing so, the court

erred by substituting its judgment for the University's Board, which believes 

that having a critically-acclaimed, upscale restaurant on campus enhances the 

public's perception of the University as a forward-looking institution, and 

thereby serves as an important recruiting tool for students and faculty. 

Furthermore, in determining whether the subject premises are used for a 

public purpose, the Tax Court gave little weight to the evidence showing that 

in 2013, approximately eighty-five percent of the restaurant's employees were 

University students. The court also discounted the evidence that the restaurant 

will use produce grown on the University's property and will provide 

compostable waste for the University's science program, where it will be used 

for research by faculty and students. 
A-4799-17T3 14

Standing alone, each of these factors would not be sufficient to establish 

that the property is being used for a public purpose; however, when all of the 

relationships between the restaurant and the University are considered, they 

warrant the conclusion that the subject property is being used for a public 

purpose. We therefore conclude the subject property is exempt from local 

property taxation under N.J.S.A. 54:4-3.3. 

III.

Gourmet Dining and the University further argue that the Tax Court

erred by finding that Gourmet Dining is subject to local property taxes under 

N.J.S.A. 54:4-2.3. The statute provides in pertinent part that

[w]hen real estate exempt from taxation is leased to 

another whose property is not exempt, and the leasing 

of which does not make the real estate taxable, the 

leasehold estate and the appurtenances shall be listed 

as the property of the lessee thereof, or his assignee, 

and assessed as real estate.

[Ibid.]

Here, the court found that the Township had established that the MSA is 

"functionally a lease." Gourmet Dining, 30 N.J. Tax at 424. Gourmet Dining 

and the University contend, however, that the evidence does not support that 

conclusion. 

"[A] lease is a grant of exclusive possession to use the land for any 

lawful purpose, subject to reservation of a right of possession in the landlord 
A-4799-17T3 15

for any purpose or purposes 'not inconsistent with the privileges granted the 

tenant.'" Sandyston Twp. v. Angerman, 134 N.J. Super. 448, 451 (App. Div. 

1975) (quoting 3 Thompson on Real Property § 1032 (1959)); see also Thiokol 

Chem. Corp. v. Morris Cty. Bd. of Taxation, 41 N.J. 405, 417 (1964). 

Determining whether an agreement is a lease depends upon "the legal effect of 

its provisions." Angerman, 134 N.J. Super. at 451. 

"The difference between a lease and license or similar limited status . . . 

is that a lease gives exclusive possession of the premises against all the world, 

including the owner, while a license confers a privilege to occupy under the 

owner." Thiokol Chem. Corp., 41 N.J. at 417. "A license or similar status is 

generally revocable at the pleasure of the owner and gives occupancy so far as 

necessary to engage in the agreed acts or the performance of agreed services 

and no further," whereas "a lease gives the right of exclusive possession for all 

purposes not prohibited by its terms." Ibid. 

As we have explained, in the Management Agreement, the University 

granted the Foundation "the exclusive right to operate, manage and control . . . 

the Facility," which is defined as the restaurant and catering operations located 

in the NJCSTM. The Management Agreement grants the Foundation the 

"exclusive right to operate, manage and control" the restaurant, not the 

property. 
A-4799-17T3 16

Similarly, in the MSA, the Foundation granted Gourmet Dining the 

"exclusive right to operate, manage and control" the Facility, which is defined 

as the restaurant and catering operations in the NJCSTM. The MSA does not 

expressly grant Gourmet Dining a possessory interest in the property as lessee. 

As we have noted, the MSA is an agreement to manage and operate the 

restaurant and the catering operations on the property. 

Furthermore, the MSA is for a term of ten years, unless it is terminated 

earlier for cause. Under the MSA, Gourmet Dining is required to pay annual 

management fees, but the MSA does not refer to the payments as rent. These 

and other provisions of the MSA show that the parties intended the agreement 

to be one for the management and operation of the restaurant, rather than a

lease of the property. 

Indeed, there is no provision in the MSA that expressly grants Gourmet 

Dining a possessory interest in the premises, as lessee. Had the parties 

intended to create a landlord-tenant relationship, they could readily have done 

so. We therefore conclude that the evidence does not support the Tax Court's 

conclusion that Gourmet Dining has the "functional" equivalent of a lease of 

the subject property. The Agreement is one for the management and operation 

of a restaurant, not a lease.
A-4799-17T3 17

IV.

Gourmet Dining and the University further argue that the Tax Court

erred by finding the property is not exempt from taxation under N.J.S.A. 54:4-

3.6. This statute provides in pertinent part, that

[t]he following property shall be exempt from taxation 

under this chapter: all buildings actually used for 

colleges, schools, academies or seminaries, provided 

that if any portion of such buildings are leased to 

profit-making organizations or otherwise used for 

purposes which are not themselves exempt from 

taxation, said portion shall be subject to taxation and 

the remaining portion only shall be exempt[.] 

[Ibid.]

The Tax Court determined that Gourmet Dining had a leasehold interest 

in the restaurant space, which was not exempt from taxation under the statute. 

Gourmet Dining, 30 N.J. Tax at 413. It is undisputed that the property is part 

of the University and Gourmet Dining is a profit-making entity.

However, as we have determined, Gourmet Dining is entitled to an 

exemption from property taxes under N.J.S.A. 54:4-3.3 because it is using the 

University's property for a public purpose. Moreover, as we have found, the 

MSA is an agreement to manage and operate the restaurant, not a lease. 

Therefore, Gourmet Dining is not subject to local property taxation under 

N.J.S.A. 54:4-3.6. 
A-4799-17T3 18

V.

Gourmet Dining and the University also contend that the subject 

premises are exempt from local property taxes under N.J.S.A. 18A:72A-18 

because the NJCSTM, including the restaurant space therein, is an Authority

"project" and Gourmet Dining is the Authority's "agent." The Authority's 

enabling statute provides in pertinent part that "neither the [A]uthority nor its 

agent shall be required to pay any taxes . . . in respect of a project . . . acquired 

or used by the [A]uthority or its agent[.]" N.J.S.A. 18A:72A-18. 

The Tax Court found the evidence does not establish that by managing 

and operating the restaurant, Gourmet Dining was acting as the Authority's 

"agent." Gourmet Dining, 30 N.J. Tax at 418. The court stated that there was 

"no relationship, contractual or otherwise, between Gourmet Dining and [the 

Authority]" and there was no indication "that any third party relied on any 

alleged apparent authority they perceived Gourmet Dining to possess on behalf 

of [the Authority]." Ibid. 

"An agency relationship is created when one party consents to have 

another act on its behalf, with the principal controlling and directing the acts 

of the agent." Sears Mortg. Corp. v. Rose, 134 N.J. 326, 337 (1993). An 

agency relationship also may be created if a third party relies on one party's 

"apparent authority" to act on behalf of the principal. Id. at 338. The court 
A-4799-17T3 19

correctly determined that here, there was no agency relationship between 

Gourmet Dining and the Authority. 

Gourmet Dining and the University note that in the Financing 

Agreement, the Authority authorized the University to construct and develop 

the NJCSTM building. They contend that under the Financing Agreement, the 

University acted as the Authority's "agent." 

The Authority may have designated the University as its agent for the 

purpose of constructing the building, but the evidence does not support the 

conclusion that Gourmet Dining was acting as the Authority's agent in its 

management and operation of the restaurant. The Tax Court correctly found a 

reasonable fact finder could not infer that in its management and operation of 

Ursino, Gourmet Dining was acting as an agent for the Authority. Gourmet 

Dining, 30 N.J. Tax at 418. 

Reversed and remanded for entry of an order granting summary 

judgment in favor of Gourmet Dining and the University.