NOT FOR PUBLICATION WITHOUT APPROVAL OF

THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY 

MARY SIOBHAN BRENNAN

 JUDGE

Essex County Dr. Martin L. King Jr. Justice Bldg.

495 Martin Luther King Blvd.- 4th Floor

Newark, New Jersey 07102-0690

609 815-2922, Ext. 54560

 

 July 17, 2024 

Charles Blau, Esq. 

Eileen Toll, Esq. 

Blau & Blau

223 Mountain Avenue 

Springfield, New Jersey 07081 

Thomas J. Cafferty, Esq.

Lauren James-Weir, Esq. 

GIBBONS P.C.

One Gateway Center Newark,

New Jersey 07102 

Re: City of Jersey City v. 575 Pavonia, LLC

Docket No.: 008090-2020 

 Block 9606, Lot 29.01 

Counsellors: 

This letter constitutes the court’s opinion following trial of the local property tax appeal filed by 

plaintiff, City of Jersey City (“Jersey City”) and the counterclaim filed by defendant, 575 Pavonia, LLC1

(“Taxpayer”) for the 2020 tax year.

For the reasons stated more fully below, and based upon the specific facts of this case, the court

finds that the property in question is underassessed. Furthermore, its true market value shall be 

established using the sales comparison approach and shall be calculated “as is” with a unit of comparison 

based on square footage and shall not be calculated based on potential density. 

1

 Pleadings originally filed against prior owner/related entity 532 Summit Avenue Holdings, LLC.
2 

Pursuant to R. 1:7-4, the court makes the following findings of fact and conclusions of law based 

on the evidence and testimony adduced during trial. 

I. Findings of Fact 

A. Property Information

This appeal concerns a 19,521 square foot property2located at the corner of Summit Avenue and 

Pavonia Avenue in the city of Jersey City, Hudson County, New Jersey ("Subject Property"). Previously 

identified on the tax map as Block 9606, Lots 29, 32, 33, 34 and 35, in 2019 it was changed to Block 

9606, Lot 29.01. The street address is 532 Summit Avenue. 

By way of background, Jersey City is situated across the Hudson River from New York City and 

compromises part of the New York metropolitan area. It shares significant mass transit connections with 

Manhattan and is the second most populous city in New Jersey. The Journal Square section of Jersey 

City where the Subject Property is located, is a business district, residential area, and transportation hub, 

which takes its name from the newspaper The Jersey Journal who located its headquarters there from 

1911 to 2013. The Subject Property lies one block from the Journal Square Transportation Center and 

PATH station, which provides direct access to Manhattan. 

In late 2008, the Jersey City Municipal Council determined the greater Journal Square area to be 

an "area in need of rehabilitation," pursuant to the New Jersey Local Housing and Redevelopment Law 

(N.J.S.A. 40A:12A-1 et seq.) The creation of the Journal Square 2060 Redevelopment Plan Area

followed this determination. The plan had the purpose of returning the area to a flourishing central 

business and shopping destination by fostering the redevelopment of Jersey City's central business 

2

 Taxpayer’s expert reported a square footage of 19,195. In the absence of evidence to the 

contrary, the court accepts Jersey City’s reported square footage. 
3 

district. It provided for transit-oriented development of new housing, offices, commercial spaces, and 

public open spaces within walking distance of Journal Square and transit facilities. 

The Subject Property is located within the boundaries of Zone 3 of the Journal Square 2060 

Redevelopment Plan. The specific permitted uses3

 within Zone 3 are as follows: 

(a) Residential: permitted everywhere except on the ground floor of buildings greater 

than 65 feet in height. 

(b) Retail Sales of Goods and Services/Financial Services.

(c) Offices: permitted everywhere except on the ground floor of buildings greater 

 than 65 feet in height. 

(d) Houses of worship: Permitted everywhere except on the ground floor of 

 Buildings. 

(e) Art galleries.

(f) Live/Work units and home occupations: except on the ground floor of 

 buildings greater than 65 feet in height. 

(g) Restaurants: category one and two.

(h) Structured Parking: provided the design standards of Section IV: D above are 

 met. Structured Parking is not permitted at any street corner location. 

(i) Hotels/Bed and Breakfast.

(j) Medical Offices. 

(k) Child and Adult Day Care Centers. 

(l) Theatres/Night Clubs/Bars. 

(m) Schools. 

(n) Museum. 

(o) Government uses. 

(p) Billboards: as per billboard requirements in Section VII: E above. 

 (q) Any combination of the above. 

On March 30, 2015, 532 Summit Avenue Holdings, LLC purchased the Subject Property

from Hugh A. McGuire, Jr.4and Marie McGuire, husband and wife (as to 50% interest), and Dr. 

Cataldo Cacaca, Carolina Topolewski, and Teresa Tripodi, tenants in common (as to a 50% interest) 

3 Based upon the comparable sales provided, there are multiple zones in Jersey City that provide 

for multi-unit residential redevelopment. 

4 Mr. McGuire, Jr. is well known to the litigants’ attorneys and expert appraisers, and to the 

court. He has an MAI designation (Member Appraisal Institute) and has testified as an expert in 

the valuation of commercial, industrial, residential, and other types of property. 
4 

for $5,050,000 (five-million-fifty-thousand dollars), which calculated to $258.70 per square foot. 

At the time of sale, and until 2020, the Subject Property consisted of an active commercial 

parking lot with 100+ on-site spaces on a .44-acre lot. Only one building existed on the lot; a small 

station for the parking attendant. The remainder of the site consisted of asphalt pavement, concrete 

curb-cuts, concrete sidewalks and curbing, fencing, metal guard rail/barriers, lighting, and signage. 

Surface parking as a principal or accessory use is not a permitted use in Zone 3. Thus, on the valuation 

date for 2020 local property taxes, October 1, 2019, the Subject Property’s existing parking lot 

constituted a pre-existing non-confirming use. 

B. Site Plan Approval 

 On August 15, 2019, Taxpayer applied to Jersey City's Planning Board (“Planning Board”) 

for Preliminary and Final Major Site Plan approval with design waivers and deviations pursuant to 

N.J.S.A. 40:55D-70(c). The application related to the development on the Subject Property of a 

twenty-five-story mixed use building, with approximately 2,416 square feet of 

retail/restaurant/sidewalk cafe space on the ground floor; approximately 1,631 square feet of office 

space on the ground floor; and 341 residential units on the upper floors.5 

On October 29, 2019, the Planning Board heard Taxpayer’s amended application6 with four 

design waivers and ten deviations. At the hearing, Taxpayer presented the testimony of four witnesses 

including experts in support of its application. There was no expert testimony presented in opposition 

to the testimony and reports provided by Taxpayer’s witnesses and experts. There were members of the 

5 Remaining square footage is presumed to be for setback, step back requirements, etc. as

required by zoning. 

6 Taxpayer amended the application at the hearing to include a dog run on the second level which 

resulted in the elimination of a residential unit.
5 

public who attended and expressed concerns. Also, a member of the public representing the adjoining 

church property spoke in favor of the redevelopment. 

Relying on the testimony, plans, and reports submitted by Taxpayer’s witnesses and experts, 

the oral and written testimony of the Division of Planning Staff, and the comments of the public, the 

Planning Board approved the application at the October 29th meeting by an 8-1 vote, subject to certain 

conditions, through the adoption of a Resolution. That Resolution (P19-131) was memorialized on 

November 26, 2019. 

Shortly thereafter, on December 19, 2019, 532 Summit Avenue Holdings, LLC transferred 

title to the Subject Property to Taxpayer for $10.00 (ten dollars). Additionally, the parties entered 

into a contractual agreement that would allow the parking facility to continue in operation until such 

time as the development project could break ground. 

 Resolution P19-31 was amended in 2020 by way of Resolution P20-113 to make material 

changes, adjust the unit mix, and make several other changes. In 2021, Taxpayer applied for Final 

Major Site Plan Administrative Amendment Approval to include a reduction in the number of 

residential units from 340 to 317, façade changes, reconfiguration of the cellar space, and shifting of 

the east foundation wall. The Planning Board heard the application on September 14, 2021. The 

Planning Board approved Taxpayer’s application by a 5-0 vote. That Resolution (P21-090) was 

memorialized on September 28, 2021. 

C. Assessment History

Jersey City conducted a city-wide revaluation in 2018.7 As a result of the revaluation, the 

Subject Property carried an assessment value of $1,500,000 (one-million-five-hundred-thousand 

7 Revaluation is the process of updating the tax assessed values (what the city uses to compute 

property tax bills) to equal market values (what a property is worth on the open market).
6 

dollars) for tax years 2018-2021. For tax year 2022, the assessment was increased to $18,800,000 

(eighteen-million-eight-hundred-thousand dollars), of which $18,700,000 (eighteen-million-sevenhundred-thousand dollars) was attributed to the land value and $100,000 (one-hundred-thousand 

dollars) was attributed to the value of improvements. 

This appeal applies to tax year 2020. Set forth below are the Subject Property’s local 

property tax assessment, implied equalized value, and the experts’ value conclusion in controversy. 

Valuation 

date

Local 

property 

tax 

assessment

Average 

ratio of 

assessed to 

true value 

Implied 

equalized

Value

Jersey City’s 

expert’s 

concluded value 

Taxpayer’s 

expert’s 

concluded value 

10/1/2019 $1,500,000 87.91% $1,706,300 $27,200,000 $7,580,000 

D. Procedural History 

 On June 10, 2020, Jersey City filed with this Court a direct appeal of the Subject Property's 

tax assessment for the 2020 tax year. On June 29, 2020, Taxpayer filed an Answer and Counterclaim.

After the conclusion of discovery, the court held trial on May 16, 2024. At the conclusion of 

testimony, documents were moved into evidence. In lieu of closing arguments, the parties submitted 

closing briefs. 

E. Trial Testimony

Jersey City offered testimony from a New Jersey certified general real estate appraiser, who 

was accepted by the court, without objection, as an expert in the field of property valuation (“Jersey 

City’s expert”). The expert testified that the most credible method of determining the true market 

value of the Subject Property is through use of the sales comparison approach. He prepared an 
7 

appraisal report expressing his opinion of the Subject Property’s true or fair market value as of the 

October 1, 2019 valuation date.8 

Jersey City’s expert relied on six land sales zoned for development in Jersey City. The expert 

restricted his sales primarily to properties that had been sold subject to site plan approval or sold with 

existing site plan approvals. Two of the chosen properties were also used as comparable sales by 

Taxpayer’s expert (70 Central Avenue and 348 Baldwin Avenue, both of which were sold subject to 

approval.) The expert categorized Taxpayer’s August 2019 application for preliminary site plan 

approval as “imminent” prompting him to apply a density-based unit of comparison of price per unit, 

which he believed was in accord with New Jersey jurisprudence specific to the development of vacant 

land. 

The comparable sales covered the period from May 31, 2018 through August 20, 2019. 

Adjustments were made for expenditures after purchase, market conditions, location, size, and 

development approvals. After adjustments, the sales ranged in value from $71,916 to $103,481 per 

market unit. The sales had a mean of $82,882 per unit and a median of $79,826 per unit. After careful

consideration of all the pertinent factors, the expert concluded that, while no sale can be considered 

conclusive, it was his opinion that the combined weight of all sales provided support for a land value 

estimate of $80,000 per market unit. When multiplied by 340 units, he opined that the fair market 

value of the Subject Property, as of October 1, 2019 was $27,200,000.00 (twenty-seven-million-twohundred-thousand dollars.) 

8

 Jersey City’s expert amended his November 30, 2023 report on May 15, 2024 to reflect a few 

minor corrections to his comparable sales. 
8 

 Taxpayer presented three witnesses at trial. Taxpayer offered testimony from a New Jersey 

certified general real estate appraiser, who was accepted by the court, without objection, as an expert 

in the field of property valuation (“Taxpayer’s expert.”) Taxpayer’s expert agreed that the most 

credible method of determining the true market value of the Subject Property is through use of the 

sales comparison approach. Taxpayer’s expert prepared an appraisal report expressing his opinion 

of the Subject Property’s true or fair market value as of the October 1, 2019 valuation date.9 

Like Jersey’s City’s expert, he focused on vacant properties and properties to be demolished 

in one of Jersey City’s multiple redevelopment zones. However, unlike Jersey City’s expert, 

Taxpayer’s expert unit of comparison was based on a value per square foot, which he believed more 

accurately reflected the market’s valuation of development properties without preliminary site plan 

approval in Jersey City. 

The comparable sales employed by Taxpayer’s expert covered the period from October 2017

through October 2019. He adjusted for expenditures after purchase, market conditions, location, size, 

and development approvals. After adjustments, the sales range in value was from $226.69 per square 

foot to $457.52 per square foot. The sales had a mean of $345.82 per square foot and a median of 

$340.97 per square foot. The expert concluded that upon review of all sales information pertaining to 

vacant sites in the Journal Square area, and considering the multitude of factors that influenced each 

individual sale, the Subject Property was in the middle range of adjusted value. He attributed this to 

its overall size, lack of approvals as of the date of valuation, shape, location, physical site 

characteristics and zoning. It was his opinion that the combined weight of all sales provided support 

for an “as is” land value estimate of $395.00 per square foot, which multiplied by 19,195 square feet 

9 Taxpayer’s expert amended his February 8, 2024 report on May 15, 2024 to reflect a few minor 

corrections to his comparable sales. 
9 

results in a value of $7,582,025. After rounding, he found the fair market value of the Subject 

Property, as of October 1, 2019, was $7,580,000 (seven-million-five-hundred-and-eighty-thousand 

dollars.) 

A representative of the Taxpayer, real estate developer Joseph Panepinto also testified. He 

has been a partner in Ironstate Development Company for 25 years. His primary job responsibilities 

involve acquisition of properties and financing almost exclusively in Jersey City. He negotiated the 

successful bid on the Subject Property with prior owner, Hugh Maguire, Jr. in 2015. He also testified 

as to his involvement with another Zone 3 redevelopment project near the Subject Property known

as Columbus Towers. Specifically, he recounted the difficulties in obtaining site plan approval for 

that project due to issues and objections from members of the city council, the city’s engineering 

staff, and members of the public. The delays and difficulties in that matter were only resolved after 

almost three years of litigation in both state and federal court.10

10 On September 25, 2018 the Property Owner filed a Verified Complaint captioned 500 Summit 

Avenue Mazal, LLC v. City of Jersey City, Annisia Cialone, Director, Jersey City Department 

of Housing, Economic Development and Commerce, Tanya Marione, Director, Division of City 

Planning, Matthew Ward, Principal Planner, Raymond Meyer, Construction Code Official, 

Jersey City Department of Public Works, and John and Jane Does 1-10, Docket Number HUDL-3805-2018. The First Count sought a court order by way of a prerogative writ in lieu of 

mandamus to compel various officials and agencies of Jersey City to both recognize and act upon 

the Property Owner’s building permit applications because of an “automatic approval” pursuant 

to N.J.S.A. 40:55D-10.3 and Section 345-13 of the Jersey City Land Development ordinance 

regarding the development and construction of real property located at 500 Summit Avenue. 

On October 24, 2018, Jersey City filed a Notice of Removal of the case to U.S. District Court 

for the District of New Jersey under Civil Action No. 2:18-cv-15276-JMV-JBC predicated upon 

federal claims set forth in the Second Count of the Complaint. 

In 2020, the parties along with representatives of the Hilltop Neighborhood Association, 

including residents living near the property, engaged in settlement negotiations, resulting in the 

dismissal of the actions without prejudice. 
10 

Following Mr. Panepinto’s testimony, Taxpayer offered testimony from a New Jersey 

licensed professional planner, who was accepted by the court, without objection, as an expert in the 

field of municipal planning board procedures and approvals (“Taxpayer’s planning board expert”).11 

Taxpayer’s planning board expert addressed the uncertainties of municipal planning board approvals 

as of October 1, 2019, based upon her experience in appearing before the Planning Board of Jersey 

City, and other planning boards. Taxpayer’s planning board expert prepared a report expressing her 

opinion that while a likelihood existed that site plan approval would be obtained, as of the October 1,

2019 valuation date, approval had not yet been obtained, timing of approval was uncertain, and the 

possibility of a challenge to approval was unknown and uncertain.

II. Conclusions of Law 

Presumption of Validity

Original assessments are entitled to a presumption of validity. MSGW Real Estate Fund, LLC 

v. Mountain Lakes Borough, 18 N.J. Tax 364, 373 (N.J. Tax Ct. 1998). This presumption can be 

overcome “by presenting evidence sufficient to demonstrate the value of the subject property, thereby 

raising a debatable question as to the validity of the assessment.” Id. at 376. The evidence must be 

definite, positive, and certain in quantity and quality to overcome the presumption. The plaintiff bears 

the burden of overcoming the presumption with respect to its claim, and the defendant must overcome 

the presumption with respect to its counterclaim. 

Taxpayer argues that Jersey City has failed to overcome the presumption of correction 

attached to the Subject Property’s 2020 $1,500,000 tax assessment. The court finds this argument 

11 The expert was not involved in Taxpayer’s actual preliminary and final site plan approval 

application process or subsequent hearings. 
11 

disingenuous at best. While the court will not speculate as to why the assessment was set at 

$1,500,000 at the time of revaluation, which was three years after its sale for $5,050,000, there is no 

question in the court’s mind that the Subject Property as of October 1, 2019 was underassessed. 

As established by the testimony of both expert appraisers, the Subject Property’s 2020 market 

value is potentially between 4 1⁄2 to 16 times higher than its implied equalized value. The court finds 

that the 2015 purchase price and the testimony of both experts provide sufficient evidence to 

overcome the presumption of validity attached to the original assessment. Having made this 

determination, the court must now weigh and evaluate all the evidence, decide the appeal on the 

merits, and determine the fair market value as of October 1, 2019. 

Highest and Best Use 

Pursuant to N.J.S.A. 54:4-23, the focus of an appeal of property taxes is on the market value 

of the property as of the first of October in the applicable pretax year. To establish market value, 

consideration must be given to the price which a hypothetical buyer would pay a hypothetical seller, 

neither of which is constrained to purchase or sell the property premised upon the property’s highest 

and best use, either as vacant or improved. 

The court bases its determination of a property’s highest and best use on an analysis of four 

criteria: whether the use of the property is: 1) legally permissible; 2) physically possible; 3) 

financially feasible; and 4) maximally productive. Ford Motor Co. v. Edison Twp., 127 N.J. 290, 312 

(1992). Critical to any highest and best use analysis is that the use of the property not only be legally 

permitted but is reasonably probable. 

A fundamental tenet of the highest and best use analysis is that property, regardless of its 

character, must be valued and assessed for local property tax purposes in the condition in which it is 

utilized on the assessing date, and the burden is on the person claiming otherwise to establish 
12 

differently. Generally, property should be valued for tax assessment purposes based upon what was 

known and reasonably anticipated as of the assessment date and should not be based upon speculation 

or conjecture.

On the date of valuation (October 1, 2019), the Subject Property consisted of a public parking 

lot located within Zone 3 of the Journal Square 2060 Redevelopment Plan. Proposed development 

projects in a highly populated urban area are not simple undertakings. Many factors must be

considered when seeking approvals from planning boards. A proposed development must be 

analyzed with respect to its potential relationship with both existing buildings and proposed or 

foreseeable buildings in the future. The development must also be analyzed in terms of light, air, 

useable open space, access to public rights of way, parking and transit, and height and bulk as well. 

While it is true that Taxpayer’s August 2019 application to the Planning Board for Preliminary 

and Final Major Site Plan approval was for the development of a 25-story mixed use building, with 

341 residential units (reduced to 340), it is also true that the Taxpayer’s application sought four design 

waivers and ten deviations and had not yet endured a public hearing. Therefore, Jersey City’s 

appraisal expert’s conclusion that the highest and best use of the Subject Property is for development 

of multi-family residential use with a 25 story, 340-unit apartment building, as permitted by zoning 

and approved by the Jersey City Planning Board, simply could not have reasonably been made on 

October 1, 2019. This conclusion “jumps the gun” and assumes that Taxpayer’s application as written 

in August 2019 is an “imminent” given or, colloquially a “done deal”. Jersey City’s appraiser 

overlooks the multitude of factors common to the application, hearing, and resolution process that 

could have prevented the October 29, 2019 approval and/or November 26, 2019 memorialization 

from occurring. 
13 

With respect to a fully developed urban environment, such as Jersey City, an application 

without a hearing is merely just that – an application. Despite the zoning, the proposed development 

has not been subjected to review and scrutiny by the planning board members and the public. It is 

their function to oversee redevelopment of their community. The planning board is entitled to 

consider, object, question, remand, and potentially adjourn the decision on approval to protect their 

community from random, non-comprehensive redevelopment even within permitted zoning. 

Although high density multifamily residences are, in fact, permitted by the applicable zoning, the 

actual density to be approved was an unknown factor until after preliminary site plan approval was 

obtained. 

Sales in the market reflect this. To manage risk, developers often contract to buy property 

subject to approval rather than “as is.” In fact, of the six comparable sales submitted by Jersey City’s 

expert, three were sold subject to approvals, and two were sold with approvals. Many pending 

conditional sales never close because they are subject to approvals that could not be obtained within 

a developer’s desired time frame or could not be obtained at all. As stated recently by our Appellate 

Division, “As is the case here, there are often many steps a prospective redeveloper must undertake 

before being considered for preliminary site plan approval on a redevelopment project.” See Sackman

Enters., Inc. v. Mayor, 478 N.J. Super. 68 (App. Div. 2024). 

Taxpayer’s planning board expert’s testimony and report highlight the uncertainty that 

attaches to a pending site plan approval application, and the speculative nature of the timing and 

scope of any approval that is ultimately granted. She credibly presented a multitude of factors that 

can delay, or even derail, a land use application. 

Firstly, any interested party has standing to challenge the notice of hearing. If such a challenge 

is rendered, and the board attorney finds that the notice is defective, the hearing must be adjourned 
14 

to a future date to allow for the publication and/or mailing of a cured notice. Additionally, any 

meeting that fails to comply with the Open Public Meetings Act, N.J.S.A. 10:4-1, et seq., must be

postponed. Further, weather, and other inclement factors can lead a planning board to postpone a 

previously and properly noticed hearing. The board may also postpone a hearing to secure a larger 

room if the number of people in attendance exceeds the hearing room’s maximum occupancy. 

Secondly, an application may be placed on a hearing agenda, but not reached due to the 

volume of the agenda. Specifically, as to Jersey City, the planning board expert related that the

planning board is known for having numerous applications on its agenda at each hearing. Further, a 

majority of board membership is required to be present for a planning board to reach a quorum and 

conduct business. A meeting may not proceed if quorum is not reached. Moreover, conflicts of 

interest may render the quorum inadequate for a specific application. Even if a quorum is reached, if 

it is at the minimum required attendance, an applicant may seek to carry the matter to a later date to 

ensure more board members are present to review the application. 

Thirdly, the planning board may need to allow additional time for public comments and 

hearings. An applicant has the right to call as many fact and expert witnesses as necessary. Likewise, 

all interested parties are entitled to ask questions and/or cross-examine each witness. Interested parties 

are also permitted to provide testimony and call their own witnesses. The applicant is then permitted 

to question and/or cross-examine all persons who testify. During an application presentation, it is 

typical for board members and/or board professionals to request additional information that is 

necessary to render a decision, including but not limited to, information related to operational aspects 

of a use, additional plans/drawings or a redesign, and additional expert testimony. A board might also 

request its own professionals to prepare additional analyses beyond an initial review that would 

require a mater to continue to another hearing. 
15 

Lastly, the planning board may also decide to reserve decision on a matter after the hearing is 

completed and make its decision at a subsequent meeting. If a variance is being requested, objectors 

can request a continuance of a hearing to secure counsel and develop a case in opposition to the 

requested variance. An applicant or an objector can also appeal a decision of the planning board. The 

appeal process can be lengthy and sometimes ties up a land-use matter for years.

The above factors are neither imaginary nor remote. Taxpayer’s representative testified as to 

the three-year litigation delay from 2017 through 2020 with respect to the Columbus Towers project 

located just one block away from the Subject Property. 

Taxpayer’s expert takes these factors into account expressly stating: 

[i]t is my opinion that the highest and best use of the subject site “as vacant” and “as 

improved” is for the subject to be redeveloped for residential apartment use. The 

subject’s current use [10/01/2019] is on a short term interim basis to be used as a 

parking lot but ultimately redevelopment of the parcel is likely and the most probable 

future use. It is noted that site plan approval is anticipated in future years based on 

various proposals/site plan submissions from the current owner. All of the 4 tests of 

the highest and best use are completely satisfied. 

Thus, the value attributed to the Subject Property by Taxpayer’s appraiser appropriately 

considers that, as of October 1, 2019, while they anticipated approval, no approval had yet been 

obtained, the timing of any approval was uncertain, and the possibility of a challenge to an approval 

was unknown and uncertain. All these factors would have affected the purchase price that a 

hypothetical buyer would have paid for the Subject Property on October 1, 2019. 

The court accepts Taxpayer’s highest and best use analysis as the more accurate and correct 

method to determine valuation of the Subject Property. 

Unit of Comparison 

Sales comparison is the most common technique for valuing vacant land and the court agrees 

with the experts that it is the most appropriate method to value the Subject Property. The true 
16 

discrepancy between the two appraiser’s opinions of value involves the appropriate unit of 

comparison to be used when comparing sales. Jersey City’s expert used the price per developable 

unit that can be constructed on the site, while Taxpayer’s expert used the value per square foot.

As to this issue, the Appraisal Institute text on land valuation states as follows: 

The price per square foot of potential building area (also known as the 

price per floor area ratio or FAR) is appropriate to use when the amount 

of building space allowed by zoning for a particular use greatly 

influences property value. One measure of a zoning density is the 

number of square feet of building area that can be constructed on the 

site. This measure of allowable floor space generally relates to land 

zoned for office or industrial uses, while another density measure 

governs the number of apartment units that the zoning will allow on a 

parcel. 

 

[Land Valuation, Real Solutions to Complex Issues. Chicago: Appraisal 

Institute,2022 (p. 44). 

and 

The price per buildable unit is appropriate to use when the allowable 

number of apartment units per acre or the number of apartments the 

entire parcel will support (either gross or net acres) provides the basis 

for the indicated value. Investors buy land based on how many 

apartments can be built rather than the number of acres a parcel may 

contain. ... The unit price varies depending on the usual physical 

features, the probable rental rate of prospective apartments, and how 

far the parcel has progressed in the zoning and site planning process. 

[Land Valuation, Real Solutions to Complex Issues. Chicago: 

Appraisal Institute,2022 (p. 55).

The critical date here is October 1, 2019. As of that date, the reasonably probable use of the 

Subject Property was redevelopment that results in the highest value in conformance with the 

permitted uses of Zone 3 of the Journal Square 2060 Redevelopment Plan. However, without 

preliminary site plan approval, the specifics of redevelopment and the density measure of apartment 

units, which would provide the highest and best use as of October 1, 2019 were not known at that 
17 

time and were not known within a reasonable probability. This truth is exemplified by the Columbus 

Towers litigation, which as of October 2019 had been in active litigation for over a year (settlement 

did not occur until 2020). 

Subsequent approval on October 29, 2019 does not change that reality. As of October 1, 2019, 

while there was a reasonable probability that redevelopment of some measure of density would be 

approved at some point in the future, there lacks reasonable probability of approval sufficient to 

warrant valuation of the property on October 1, 2019 as if the density measure indicated in the 

application had been approved. 

This court finds that as to the Subject Property, a current opinion of market value that reflects 

the existing redevelopment zoning and any premium that market participants would pay because of 

the likelihood of future site plan approval is an “as is” value. Market value would not be based on

speculation, hypothetical conditions, or unsubstantiated assumptions. 

Jersey City argues that using a density-based unit of comparison comports with multiple prior 

Tax Court decisions. 

In Sage v. Bernards Twp., 5 N.J. Tax 52 (1982), the Tax Court valued 292.80 acres of land 

for $5,490,000 based on the conclusion that it could support 1,098 single family lots, at a value of 

$5,000 per lot. The lots under appeal, together with various other lots in the township, were the subject 

of much zoning litigation for many years, relating to a ruling that the municipality's three-acre 

minimum lot size zoning in the southeastern quadrant of the township (which included the subject 

properties) was invalid. The plaintiffs alleged that the assessor markedly increased the 1980 

assessments based mainly upon its rumored sale and the subject properties' rezoning from minimum 

three-acre dwelling lots to multi-family. They complained that since the new zoning ordinance did 

not receive its final reading and approval until October 2, 1979, one day after the assessing date, and, 
18 

since the agreement of sale was dated October 17, 1979, which was also after the assessing date, the 

assessor had no legal reason for increasing the assessments. 

The county board affirmed the assessment, and the court affirmed the judgment of the county 

board. The court noted that the value of a property, pursuant to N.J.S.A. 54:4-23, was the price which 

the assessor believed could be obtained for the property, in money, at a fair sale, between a willing 

seller and a willing buyer, as of the first day of October of the year in which the assessment was made. 

The local assessor had the authority to use his knowledge and judgment in valuing taxable property, 

and he was not confined by the law to base his value on recorded deed transactions. Additionally, so 

long as a proffered sale was not remote, the sale of the subject property occurring shortly after its 

assessing date was admissible for its rational probative valuation inference. The court found that the 

assessor had followed the statutory directives, and the evidence supported his valuation. 

The court finds the facts presented in Sage, distinguishable from those in this appeal. The 

assessment in Sage related to a lengthy and highly litigated process to rezone development for 

residential use in a rural community as set forth in specificity in the development plan (The plan will 

consist of 1,222 units, 1,016 of which will be multi-family, 206 of which will be single-family 

residences.) Thus factually, the Sage case bears little resemblance to the factual scenario presented 

by Jersey City’s redevelopment plan because there exists no reasonable knowledge of approval or 

specificity.

Jersey City notes that in Berkley Arms Apartment Corp. v. Hackensack City, 6 N.J. Tax 260 

(1983), the court held that, generally speaking, the size of a lot bears no necessary relationship to the 

number of units that can be place on a property which is controlled by the applicable zoning, bulk, 

and height requirements. However, the use of this holding is taken out of context. 
19 

Berkley Arms was an existing mid-rise apartment building consisting of 120 units, situated 

on approximately 1.56 acres. There were 60 one-bedroom and 60 two-bedroom apartments with each 

unit being virtually identical to all others in the same bedroom category. The improvements, which 

were constructed in 1954-1955, consisted of an eight-story complex with a two-story reinforced 

concrete parking structure containing 126 parking spaces and an in-ground concrete pool. The 

property was conveyed on April 28, 1981, to convert ownership from income-producing to

cooperative ownership. Since it remained a multi-family residential use property, this ownership 

conversion did not change the highest and best use ascribed to the property in any way. Factually, the 

Berkley Arms case is completely distinguishable from the Subject Property, which involves vacant

land to be improved in an urban redevelopment zone. 

In Linwood Props., Inc. v. Fort Lee Borough, 7 N.J. Tax 320 (1985) the subject property was 

a 5-acre vacant lot. It was zoned R-10, which permitted the construction of high-rise-residential 

buildings with a maximum height and number of units that depended on the size of the lot. The two 

experts relied on a total of seven sales all of which were zoned for high rise apartment buildings. No 

new high-rise apartment buildings had been built in many years. There were no approvals in place

for the subject property. The defendant’s expert analyzed the sales based on the number of apartment 

buildings permitted under the zoning ordinance. The municipality’s appraiser based his value on the

square footage of the subject. The Tax Court rejected the square footage analysis. The Court found 

that the subject could accommodate 276 apartment units in a 15-story building and found a value of 

$12,325 a unit. 

Like Jersey City, Fort Lee is situated in one of the premier high-rise-apartment communities 

in the northern part of New Jersey. Residents have instant access to New York City by way of the 

George Washington Bridge. Additionally, occupants of high-rise structures particularly enjoy the 
20 

view of the New York City skyline. The property’s R-10 zoning permitted the construction of highrise-residential buildings with the maximum height and number of units dependent upon the size of 

the lot. It is in very close proximity to the George Washington Bridge and is immediately accessible 

to public transportation facilities. 

According to Fort Lee’s expert witness there were approximately 125 apartment structures of 

significance in the borough. The site was one of four remaining vacant sites in the borough zoned for 

such use. No new high-rise-apartment buildings had been constructed in the borough for many years 

(the proliferation of condominium and cooperative apartment units resulted from conversions of 

rental apartment buildings).

The court in arriving at its decision stated: 

It is not the mere opinion of appraisers as to highest and best use that 

is important but rather the activities of buyers and sellers in the market 

place. Without purporting to set forth all of such factors, some of the 

more significant to be considered in determining highest and best 

use may be the rezoning of nearby property, growth patterns, change 

of use patterns and character of neighborhood, demand within the area 

for certain types of land use, sales of related or similar properties at 

prices reflecting anticipated rezoning and physical characteristics of 

the subject and of nearby properties. 

[Linwood at 327-328] 

These exact types of factors distinguish the holding in Linwood from the Subject Property. 

The property in Fort Lee was being developed with a focus on the use of one of four remaining vacant 

lots in the borough. Jersey City’s expansive redevelopment plan runs counter to that. Jersey City’s 

plan is based upon a broad "area in need of rehabilitation," and encompasses a large section of the 

municipality, which is geographically much denser and larger than Fort Lee. The court was not 

concerned with site plan approvals in Linwood. Rather, it focused on a highest and best use 

determination based upon a potential variance or zoning change to allow for the development of office 
21 

space. It’s determination of unit of comparison related to those factors which are different than the 

factors involved with the Subject Property. 

Likewise, this court finds the factual scenarios in Romulus Development Corp. v. Weehawken 

Tp., 15 N.J Tax 209 (1995) and in Jersey City, Div. of Water v. Parsippany-Troy Hills Tp., 16 N.J.

Tax 504 (1997) distinguishable from the market factors present in Jersey City in October 2018-2019. 

An educated buyer and an educated seller would not have assumed that Preliminary and Final Site 

Plan approval at the density requested in the application would be imminent or forthcoming. Such 

instability would have driven the purchase price and the computation of value. 

Evidence of this is found in the history of the Subject Property as presented in the record. The 

Subject Property has been in Zone 3 of the Journal Square 2060 Redevelopment Plan since 

approximately 2010. It is apparent that with the existing zoning in place for almost five years, the 

2015 purchase price of $5,050,000 was not based upon a density unit of comparison. Likewise, the 

2018 revaluation figure of $1,500,000 was not based on a density unit comparison. In fact, it would 

appear that the Jersey City assessor did not value the Subject Property based on a per unit density 

comparison until October 1, 2021, when the land portion of the assessment was increased to 

$18,700,000. 

Accordingly, the court accepts Taxpayer’s highest and best use analysis as the more accurate 

and correct method to determine valuation of the Subject Property. The court rejects Jersey City’s 

methodology to determine valuation based upon a density analysis and accepts Taxpayer’s 

methodology based upon square footage. 

Valuation

Of the properties presented by both experts, and incorporating a square footage unit of 
22 

comparison, the court relies upon the comparable sales of 70 Central Avenue12 and 348 Baldwin 

Ave13, which were provided by both Jersey City and Taxpayer; as well as the Taxpayer’s comparable 

sales of 711 Montgomery Street, 425 Hoboken Avenue, and 175-177 Academy Street; and Jersey’s 

City’s comparable sale at 55 Jordan Avenue. The court accepts the adjustments made by Taxpayer’s 

expert for market conditions, size, physical characteristics, corner influence v. non-corner and status 

of approvals as credible. Since 55 Jordan Avenue sold with approvals, the court applied a 20%

negative adjustment for the property. 

The adjusted range of value is $226.69 per square foot to $538.42 per square foot. The 

adjusted mean value is $385.55 per square foot and the adjusted median is $382.55 per square foot; 

however, the court finds that the Subject Property is in the high range of the adjusted value due to its 

density potential and its proximity to the Journal Square Transportation Center. 

After weighing the evidence, the court determines that the Subject Property had a true market 

value of $450 per square foot as of October 1, 2019. This conclusion results in a true market value of 

$8,784,450 ($450 x 19,521), which the court will round to $8,785,000. 

Corrected property tax assessment

Having reached a conclusion of the Subject Property’s true or fair market value for the 2020 

tax year, the court will determine the correct assessment. Under N.J.S.A. 54:51A-6(a), commonly 

referred to as Chapter 123, when the court is satisfied in a non-revaluation year by the evidence 

presented “that the ratio of the assessed valuation of the subject property to its true value exceeds the 

12 The court accepted Taxpayer’s square footage of 11,395 square feet as opposed to Jersey 

City’s square footage of 12,458 square feet. 

13 The court accepted Jersey City’s square footage of 9,148 square feet as opposed to 

Taxpayer’s square footage of 10,157 square feet. 
23 

upper limit or falls below the lower limit of the common level range, it shall enter judgment revising 

the taxable value of the property by applying the average ratio to the true value of the property. . . .” 

N.J.S.A. 54:51A-6(a). This process involves application of the Chapter 123 common level range. 

N.J.S.A. 54:1-35a(b). When the ratio of assessed value exceeds the upper limit or falls below the

lower limit, the formula for determining the revised taxable value of property, under N.J.S.A. 54:51A6(a), is as follows: 

True market value x Average ratio = Revised taxable value

For the 2020 tax year, the ratio of total assessed value, $1,500,000, to true market value, 

$8,785,000, yields a ratio of 17.07% which falls below the lower limit of the Chapter 123 

common level range for Jersey City (74.72%). Consequently, the total assessment calculation 

for the Subject Property is:

$8,750,000 x .8791 = $7,692,000 [ROUNDED]

III. Conclusion 

For the reasons expressed above, the court finds that the Subject Property is underassessed, and 

that its true market value when calculated “as is” on a square footage unit of comparison is $8,785,000. 

 /s/ Mary Siobhan Brennan, J.T.C.

 

Contemporaneously with the issuance of this opinion, the court is entering final judgment for 

the 2020 tax year appeal.