On this date in 1986, the Supreme Court decided Ridgewood v. Bolder Foundation, 104 N.J. 337 (1986). The issue there was “whether a taxpayer may reduce, for real estate tax assessment purposes, the value of property because of a conservation easement thereon that it granted in perpetuity to a conservation foundation.” The Bergen County Tax Board permitted the taxpayer to reduce the property’s value, but the Tax Court, substantially affirmed by the Appellate Division, took the opposite view.
Judge Antell, an Appellate Division judge temporarily assigned to the Supreme Court, wrote the Court’s unanimous opinion. Quoting Borough of Englewood Cliffs v. Estate of Allison, 69 N.J. Super. 514 (App. Div. 1961), he said that “it is immaterial for assessment purposes whether the fee owner holds a title subject to a private easement for the benefit of a dominant tenement, a public easement in a dedicated and accepted street, or public rights to use and enjoy a park under a charitable trust. In each case the land has been deprived of an element of value to be subtracted from the value of the fee…. The assessor’s duty is to determine true value of the property being assessed; he should not include elements of value transferred to other properties or transferred to the community at large in the form of public rights.”
Though not addressed expressly in Allison, “a conservation easement given to insure the preservation of open space is fully comparable to the easements or encroachments there considered and its recognition for tax valuation purposes is consistent with the philosophy of the foregoing statement,” Judge Antell said. He cited statutes whose policies showed that the public benefits flowing from conservation easements are “beyond debate.”
As a result, it was “clear that elements of value are surrendered by the taxpayer as an incident to transferring this assurance of preserving open space to the community at large. By giving up in perpetuity the right to do anything with the property other than keep it in its natural state, defendant has, as the County Tax Board found, seriously compromised its value as a marketable commodity.” Accordingly, the Court reversed the Appellate Division and the Tax Court and reinstated the ruling of the County Tax Board.
As a side note, Judge Antell was one of three Appellate Division judges (Judges Fritz and Pressler were the others) who heard this case, along with the Chief Justice and three Associate Justices. It is rare for three Appellate Division judges to have sat with the Supreme Court. But it is not quite as rare as the time that Appellate Division judges outnumbered Justices, as occurred in Cornett v. Johnson & Johnson, 211 N.J. 362 (2012), a case of mine that was discussed here.