Court Opinion

ID: 9649737
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:07:23.05148+00
Date Added: 2024-06-11T12:22:17.397641
License: Public Domain

JUSTICE RIVERA-SOTO,
concurring in part and dissenting in part.
The PNC Bank Arts Center (Arts Center), a facility originally owned by the New Jersey Highway Authority and now owned by *103its statutory successor agency the New Jersey Turnpike Authority (Authority),1 consists of two major parts: a performance amphitheater and a reception center.2 Each of the amphitheater and the reception center is operated by a private entity under contract with the Authority. Starting with the 1996 tax year, the Township of Holmdel (Holmdel), where the Arts Center is located, sought to impose real estate tax liability on the entire Arts Center. It is that effort, placed in the context of the rather tortured history of this controversy, which leads to the disparate results advanced. It is my view that the entirety of the Arts Center complex is tax-exempt. Therefore, to the extent the majority grants tax-exempt status to the amphitheater portion of the Arts Center, I concur. However, to the extent the majority denies tax-exempt status to the reception center portion of the Arts Center, I dissent.
I.
Originally, Holmdel asserted that the entire Arts Center was subject to property tax assessment for the years 1996, 1997, and 1998. In a comprehensive oral decision rendered on January 22, 1999, Judge Francine I. Axelrad, Judge of the Tax Court, straight*104forwardly explained that “[t]he ultimate issue that the Court must resolve is the tax status of the Arts Center.” Judge Axelrad explained the relevant analysis thusly:
(1) whether the Arts Center is a [“]projeet[”] as originally authorized in the 1952 Highway Authority Enabling Statute,3 and therefore exempt from taxation under N.J.SA 27:12B-6 [(repealed by L. 2003, c. 79, § 49)]; (2) if not, whether the Legislature subsequently approved then ratified the continued construction and operation of the Arts Center by the Authority, and is, therefore, exempt from taxation under the above-mentioned statute; and (3) even if it were exempt, does the privatization of the Arts Center, does the use of the Arts Center or the projected use of the Arts Center pursuant to the contract or lease with [a private party] change the nature of the Arts Center and change or somehow remove it from being a [“]projeet,[”] therefore vitiating the tax status of the Arts Center.
She concluded that “[b]ased upon the case law, the statutes, [and] the [[legislative [h]istory, it is clear to this Court that the Arts Center is a [‘]project,[’] [that] it serves a public purpose by being a [‘]project[’] within the ambit of the statute which serves a public purpose, [and] that it is expressly exempt from taxation pursuant to N.J.S.A 27:12B-16 [(repealed by L. 2003, c. 79, § 49)].”
The Appellate Division rejected Judge Axelrad’s reasoning and conclusion. Twp. of Holmdel v. N.J. Highway Auth., 329 N.J.Super. 410, 412, 748 A.2d 128 (App.Div.2000). Focusing on the nature of the leases between the Authority and private entities for the separate operation of the amphitheater and the reception center, the panel explained that “the fundamental issue here is whether the operation and activities of the Arts Center complex under the [private party] leases are within ‘the boundaries of the authority delegated'by the Legislature to the agency1 and whether the use is within ‘the terms in which the Legislature bestowed the [tax] immunity.111 Id. at 420, 748 A.2d 128 (quoting Borough of Moonachie v. Port of N.Y. Auth., 38 N.J. 414, 422-23, 185 A.2d 207 (1962)). Concentrating on the 1968 amendments to the New Jersey Highway Authority Act,4 the Appellate Division disagreed *105with Judge Axelrad’s findings and concluded that, on the record developed to that point, it could not determine with certainty whether the use of each of the amphitheater and reception center was a “project” meriting a tax exemption. Id. at 431, 432, 748 A.2d 128. The panel thus remanded the case to “flesh out the record[.]” Id. at 433, 748 A.2d 128.
On remand, the parties expanded the temporal scope of the litigation to cover the original tax years 1996, 1997, and 1998 and the additional tax years 2000, 2001, 2002, and 2004.5 Tax Court Judge KusMn6 determined that the entire Arts Center complex— both the amphitheater and the reception center — lost its tax-exempt status because of a change in the nature of the operations of the Arts Center as a whole, and that the merger legislation, N.J.S.A. 27:23-4, did not reinstate or revive that exemption. Twp. of Holmdel v. N.J. Highway Auth., 22 N.J.Tax 428, 451-52, 464 (Tax 2005). Judge KusMn ordered that (1) the amphitheater was tax-exempt for tax year 1996 but not for the tax years 1997,1998, 2000, 2001, 2002, and 2004, and (2) the reception center was not tax-exempt for any of the tax years at issue. Id. at 466. The Appellate Division affirmed. Twp. of Holmdel v. N.J. Highway Auth., 388 N.J.Super. 36, 905 A.2d 900 (App.Div.2006).
II.
The majority disagrees in part with the conclusions reached by Judge KusMn and as affirmed by the Appellate Division. Distinguishing between the amphitheater and the reception center, the majority concludes that “the ampMtheater remains tax exempt” but that “the reception center is subject to taxation.” Ante, 190 N.J. at 78, 918 A.2d at 605 (2007). Thus, the majority orders a “remand for a tax assessment of the reception center” indepen*106dent of the amphitheater. Id. at 78, 918 A.2d at 605. As a result of the majority’s holding, the Authority is liable to Holmdel for real estate taxes on the reception center for the tax years 1996, 1997, 1998, 2000, 2001, 2002, 2004, and all tax years thereafter.
Justice Wallace, concurring in part and dissenting in part, agrees with the majority that the amphitheater always has been and should continue to be tax-exempt. Ante, at 100, 918 A.2d at 618. However, Justice Wallace concludes that, by operation of the merger legislation, the entire Arts Center — including the reception center — should be tax-exempt effective the 2004 tax year and for all following years. Id. at 102, 918 A.2d at 619. Thus, Justice Wallace would hold the Authority liable to Holmdel for real estate taxes on the reception center but limited exclusively to the tax years at issue in this litigation and preceding the merger legislation: 1996,1997,1998, 2000, 2001, and 2002.
III.
To the extent the majority concludes that the amphitheater portion of the Arts Center is exempt from real estate tax liability, I concur. However, to the extent the majority finds that the reception center portion of the Arts Center is subject to real estate taxation by Holmdel, even if such liability is temporally limited in accordance with Justice Wallace’s analysis, I disagree. This disagreement, then, is limited to the retroactive and prospective tax treatment to be accorded the reception center portion of the Arts Center.
A.
I return to Judge Axelrad’s thoughtful statutory analysis in 1999, bearing in mind that she rendered her decision five years before the merger legislation was adopted, the same legislation that leads Justice Wallace to conclude that the reception center is tax-exempt. I agree with Judge Axelrad’s plain reading of N.J.S.A. 27:12B-5.1 (repealed by L. 2003, c. 79, § 49), which *107provides that “[t]he continued operation of existing facilities or activities by the authority shall not be affected by the provisions of [the 1968 statutory amendments].” (emphasis supplied). There is no doubt that the operations of both the amphitheater and the reception center have continued from their inception prior to the 1968 amendments through the present, albeit in a greatly expanded role. Similarly, under the merger legislation, “all existing facilities and property, and their operations, and management, of the authority and of the New Jersey Highway Authority, as transferred to the authority, are deemed public and essential governmental functions and are to be exempt from local taxes and assessments.” N.J.S.A 27:23-12 (emphasis supplied). Thus, at its core, this case presents a simple question of statutory construction.
The manner in which we address that task is clear: “ ‘[W]hen interpreting a statute, our overriding goal must be to determine the Legislature’s intent.’ ” SASCO 1997 NI, LLC v. Zudkewich, 166 N.J. 579, 586, 767 A.2d 469 (2001) (quoting State, Dep’t of Law & Pub. Safety v. Gonzalez, 142 N.J. 618, 627, 667 A.2d 684 (1995)); see also L.W. v. Toms River Reg’l Schs. Bd. of Educ., 189 N.J. 381, 400, 915 A.2d 535 (2007) (“Because that question entails statutory interpretation, we begin with the statute’s plain language — our polestar in discerning the Legislature’s intent.”) (citing DiProspero v. Penn, 183 N.J. 477, 492, 874 A.2d 1039 (2005)). We have explained that “ ‘[o]rdinarily, the language of the statute is the surest indicator of the Legislature’s intent.’ ” SASCO 1997 NI, LLC v. Zudkewich, supra, 166 N.J. at 586, 767 A.2d 469 (quoting Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218, 231, 708 A.2d 401 (1998)). When, as here, “ ‘the language is plain and clearly reveals the meaning of the statute, the court’s sole function is to enforce the statute in accordance with those terms.’” Ibid, (quoting State, Dep’t of Law & Pub. Safety v. Bigham, 119 N.J. 646, 651, 575 A.2d 868 (1990)). “[W]e also consider the overall legislative seheme[,]” ibid, (citing Fiore v. Consol. Freightways, 140 N.J. 452, 466, 659 A.2d 436 (1995)), because “ ‘[o]ur task is to harmonize the individual sections and read the statute in the way that is most *108consistent with the overall legislative intent[,]’” ibid, (quoting Fiore, supra, 140 N.J. at 466, 659 A.2d 436).
Judge Axelrad originally explained that, albeit in a more limited form than at present, the Arts Center existed as of the 1968 amendments to the New Jersey Highway Authority Act, specifically the adoption of N.J.S.A. 27:12B-5.1 (repealed by L. 2003, c. 79, § 49). She noted that ,“[e]ven if the term ‘project’ as defined in the original act may not have contemplated the Arts Center, ... a plain reading of N.J.S.A. 27:12B-5.1 [(repealed by L. 2003, c. 79, § 49)] and the Commission hearings surrounding its enactment[} suggest that the Legislature ratified the continued construction and operation of the Arts Center by the Authority.” She reasoned that “by ratifying the Arts Cénter as a [‘]project[’] under [N.J.S.A.] 27:12B-5.1, it automatically followed, without having to mention it in the statute, that ... the [‘]project[’] is exempt from taxation pursuant to the express language of N.J.S.A. 27:12B-16 [(repealed by L. 2003, c. 79, § 49)].”
I cannot improve on Judge Axelrad’s analysis, reasoning, or conclusions, save to further supplement it with the unambiguous language of the merger legislation adopted five years after she reached her decision. I too subscribe to the view that the Arts Center — including its component parts of an amphitheater and a reception center — constitutes a “project” as defined in the now-repealed N.J.S.A. 27:12B-3(d) (defining “project” to include “such adjoining park or recreational areas and facilities directly related to the use of the express highway, superhighway or motorway as the authority, with the concurrence of the Department of Environmental Protection, shall find to be necessary and desirable for the convenience and comfort of users of the highway project and feasible for development pursuant to this act”) (repealed by L. 2003, c. 79, § 49). As the majority notes, “[c]onstruction of the Arts Center was completed in 1968.” Ante, at 79, 918 A.2d at 606. Hence, the Arts Center was, at that point, exempt from all forms of taxation. N.J.S.A. 27U2B-16 (repealed by L. 2003, c. 79, § 49). Judge Axelrad noted, and again I entirely agree, that after the *109Arts Center was constructed, the Legislature adopted the 1968 amendments to the New Jersey Highway Authority Act, specifically N.J.S.A. 27:12B-5.1 (repealed by L. 2003, c. 79, § 49), which plainly provided that “[t]he continued operation of existing facilities or activities by the authority shall not be affected by the provisions of [the 1968 statutory amendments].” (emphasis supplied). Thus, at least until the 2003 repeal of the New Jersey Highway Authority Act and the adoption of the merger legislation, the entire Arts Center — including the amphitheater and reception center — was tax-exempt.
This conclusion is further supported by the explicit language used by the Legislature when it consolidated all highway matters under the New Jersey Turnpike Authority pursuant to the merger legislation. L. 2003, c. 79, § 1 to § 44, as codified at N.J.S.A. 27:23-1 to -47. In adopting the merger legislation, which supplanted the earlier statutory scheme concerning the New Jersey Highway Authority, the Legislature statutorily defined the Arts Center as “a highway project of the authority.” N.J.S.A 27:23-4. It also defined a “highway project” to specifically include “the Garden State Arts Center” as well as any “adjoining park and recreational areas and facilities, directly or indirectly related to the use of a transportation project as the authority shall find to be necessary and desirable[.]” N.J.S.A. 27:23-4. Finally, the merger legislation amended the exemption from taxation section of the New Jersey Turnpike Authority Act to “reaffirm[ ] that all existing facilities and property, and their operations, and management ... of the New Jersey Highway Authority ... are exempt from local taxes or assessments.” N.J.S.A. 27:23-12. The language used by the Legislature is telling: it “reaffirms” the tax-exempt status of the Arts Center, thereby making clear that the Legislature all the while intended the Arts Center and its “operations[ ] and management” to be tax-exempt.
B.
Judge Axelrad also explained that, “because the Arts Center is a [‘]project,[’] it should be exempt from taxation pursuant to the *110express language of N.J.S.A. 27:12B-16 [(repealed by L. 2003, c. 79, § 49)], unless something has occurred ... which would vitiate or remove that express ability to obtain a tax exemption.” Relying on the “basic principle” that “property employed primarily for a public use does not lose immunity [from taxation] because the agency incidentally derives some private business income from it[,]” Borough of Moonachie v. Port of N.Y. Auth., 38 N.J. 414, 426-27, 185 A.2d 207 (1962), Judge Axelrad found that the Arts Center’s ability to offer entertainment and recreational activities clearly conferred a public benefit. Properly dismissing the objection that the Arts Center was earning income as a result of these activities, she noted that “monetary considerations ... do not change the character, the fact that the Garden State Arts Center was used for public use, for public benefit ... and it’s continuing to be used for those purposes after [the agreements with the private parties were executed].” Adopting the argument advanced by the Authority, Judge Axelrad explained that the expansion of the amphitheater and the reception center, and the engagement of private parties to run these facilities, was “an enhancement of services and of the facilities, as well as an enhancement of revenues that can be used for other purposes by the Authority for recreational uses for the benefit of the public, which is the intended recipient under the Act.”
In sum, Judge Axelrad concluded that “the Arts Center as a project of the Authority, serves a public purpose and that ... public purpose is not lost by the fact that it’s privatized[.]” Judge Axelrad concluded, and I concur, that “the concept of a,public purpose is a broad one” and that, in the circumstances presented, the activities at the Arts Center’s amphitheater and reception center provide a public use and should be tax-exempt. See, e.g., S. Jersey Transp. Auth. v. City of Pleasantville, 312 N.J.Super. 438, 712 A.2d 215 (App.Div.1998) (holding, under parallel statutory scheme, that monies received from private parties for use of billboards placed on authority land adjacent to highway nonetheless were statutorily exempt from taxation).
*111c.
Because Judge Axelrad rendered her decision in 1999, she did not have the opportunity to speak to the merger legislation and its effect on this controversy. To the extent Justice Wallace relies on the merger legislation to conclude that the entire Arts Center is exempt from taxation, I concur. However, in my view, the merger legislation reinforces my earlier conclusion that the entirety of the Arts Center — amphitheater and reception center included — was tax-exempt from its inception. Thus, because Justice Wallace only applies the tax exemption to the reception center prospectively, I cannot join in that portion of his opinion that does not retroactively grant a tax exemption for the reception center.
IV.
To sum up, the majority distinguishes between the amphitheater and reception center portions of the Arts Center, and holds that the amphitheater portion is exempt from taxation but that the reception center is subject to taxation. Justice Wallace agrees that the amphitheater portion is tax-exempt from its inception, but asserts that, by virtue of the merger legislation, the reception center acquired tax-exempt status as of tax year 2004. I concur with those parts of the majority opinion and Justice Wallace’s concurrence that grant tax-exempt status to the amphitheater portion of the Arts Center. However, to the extent the majority both retroactively and prospectively — and, to a lesser retroactive extent only, Justice Wallace — deny tax-exempt status to the reception center portion of the Arts Center, I dissent.
For reversal in part & remandment (Part IV.A) — Chief Justice ZAZZALI and Justices LONG, WALLACE, RIVERA-SOTO, and HOENS — 5.
For affirmance in part & remandment (Part IV.B) — Chief Justice ZAZZALI and Justices LONG, WALLACE and HOENS — 4.
*112For reversal & remandment (Part IV.B) — Justice RIVERA-SOTO — 1.
For affirmance in part & remandment (Part IV. C) — Chief Justice ZAZZALI and Justices LONG and HOENS — 3.
For Reversal & remandment (Part IV.C) — Justices WALLACE and RIVERA-SOTO — 2.

 The New Jersey Highway Authority was created in 1952 pursuant to the New Jersey Highway Authority Act, N.J.S.A. 27:12B-1 to -26. The New Jersey Highway Authority Act was repealed by L. 2003, c. 19, § 49, and its operative provisions were merged into the New Jersey Turnpike Authority Act, N.J.S.A. 27:23-1 to -47. The session law effecting this merger, L. 2003, c. 79, § 1 to § 50, is commonly referred to as "the merger legislation,” and became effective July 9, 2003, the date of transfer of authority from the Highway Authority to the Turnpike Authority. L. 2003, c. 79, § 50; N.J.S.A. 27:23-4 (defining "Transfer Date”).

 The Arts Center as a whole formerly was known as the "Garden State Arts Center," a designation that remains embedded in the statutory scheme. N.J.S.A. 27:23-4 (defining "Garden State Arts Center" as "the Garden State Arts Center, sometimes referred to as the PNC Bank Arts Center, a highway project of the authority"). In common parlance, the PNC Bank Arts Center is understood to encompass the amphitheater or performance portion of the Arts Center. The reception center is named separately, in honor of the late Robert Baumle Meyner (1908-1990), who served as New Jersey’s Governor from 1954 to 1962.

L. 1952, c. 16, § 1 to § 27, as codified at N.J.S.A. 27:12B-1 to -26, and repealed by L. 2003, c. 79, § 49.

L. 1968, c. 348, § 1 and § 2, as modified by L. 1968, c. 441, § 1, and repealed byL. 2003, c. 79, § 49.

 The record does not disclose a reason for the omission of the tax years 1999 or 2003 from the chronological continuum.

 In the interim, Judge Axelrad was assigned to the Appellate Division, where she continues to serve.