Atlantic Coast LEH, L.L.C. v. Township of Little Egg Harbor
TAXATION — Farmland Assessment
Atlantic Coast LEH, L.L.C. v. Township of Little Egg Harbor, No. 007723-2006; Tax Court; opinion by DeAlmeida, P.J.T.C.; decided and approved for publication July 26, 2011. DDS No. 35-5-3083 [17 pp.]
The question before the court is whether plaintiff's approximately 12-acre, mostly vacant plot of land, on which is located a 290-foot, income-generating, cellular communications tower, qualifies for farmland assessment pursuant to the Farmland Assessment Act of 1964.
The property is put to dual uses. In addition to collecting rent from the operation of the cellular tower, which occupies less than an acre, but stretches approximately 25 stories into the sky, the property owner pays an out-of-state beekeeper to maintain beehives on the property for the production of honey, wax and other products. The bees forage on plants scattered throughout the lot. The beekeeper purchases from the property owner all the apiary products the bees make on the property for amounts just above the statutory minimum for farmland qualification. The amount collected for the bees' products consistently results in a financial loss to the taxpayer.
For each year 2006 through 2009, Atlantic Coast filed appeals with the Ocean County Board of Taxation challenging the denial of its farmland application for the subject property. The county board upheld the assessor's determinations for each year through issuance of judgments affirming the assessments on the property. The taxpayer filed timely complaints challenging the board's judgments.
Atlantic Coast moved for summary judgment, requesting that the court reverse the county board's judgments and declare the property to be subject to farmland assessment for each of the years in question. The municipality cross-moved for summary judgment, requesting that the court dismiss the complaints.
Held: The taxpayer's operation of a 290-foot-high cellular communications tower dominantd over apiary activity on the subject property during the tax years at issue, rendering farmland assessment inapplicable.
If the dominant use of the property is a use other than an agricultural or horticultural use, the property is not entitled to preferential farmland assessment. The dominant-use test was first applied by then-Judge Handler in City of East Orange v. Township of Livingston . In that case, East Orange sought farmland assessment for approximately 2,500 acres it owned in three municipalities. The land had been acquired by deed and condemnation for the purpose of collecting and protecting a supply of potable water for the inhabitants of East Orange. The issue was whether the city's property should be taxed pursuant to N.J.S.A. 54:4-3.3, which applies to municipal-owned land "used for the purpose and for the protection of a public water supply," and which allows the lands to be taxed "in the same manner and to the same extent as the lands of private persons," or the farmland assessment statutes. Judge Handler concluded that the dominant use of the city's land controlled its status under the local property tax laws. He concluded that the protection of a public water supply dominantd over the "merely incidental" agricultural and horticultural uses to which the city put the property.
The dominant-use test was applied in Green Pond Corp. v. Township of Rockaway , where the property owners purchased undeveloped woodland adjacent to a private residential lake community that they owned and managed. The court held that the dominant use of the property was as a component of the residential community and not an agricultural or horticultural use. More important, the court considered the fact that the agricultural activity was chiefly designed to satisfy the farmland assessment statutes.
When viewed through these precedents, the undisputed facts of this case lead to the conclusion that the dominant use of the subject property is not agricultural or horticultural. Atlantic Coast's history with the property reveals an intention to construct a cellular telephone tower for commercial exploitation. It was only after approval of the cellular tower enterprise that Atlantic Coast initiated apiary activities on the property.
In addition, operation of the cellular tower dominants over the beekeeping activity on the property. By its sheer size the tower dominants the physical aspects of the property. All of the beehives are contained within the chain-linked fence encompassing the cellular tower. It is reasonable to drawn an inference from the record that the tower dwarfs the beehives. From an operational perspective, the cellular communications enterprise requires no human presence at the property, apart from occasional maintenance. The apiary activity requires little human presence at the property, apart from the occasional maintenance of the hives and collection of honey and wax. The two uses of the property are similarly passive in nature.
The facts militate toward a finding that the nonagricultural use of the property dominants over the apiary activity. The subject property is not "devoted, that is, committed, or dedicated, or set apart or appropriated, or given up wholly or chiefly to the production for sale of" apiary products. Atlantic Coast first installed a profit-making, nonagricultural use of the property, which required a significant capital investment. It thereafter undertook a deliberate course of action to barely satisfy the act, even incurring an annual loss, in an attempt to secure a tax benefit for its cellular tower operations and its ground lessee, which is responsible for the payment of taxes on the property. The entire property is being used predominantly for the purpose for which it was acquired: the generation of income from the operation of a cellular tower and not for agricultural activity. The act does not accord preferential treatment in these circumstances.
The township's motion for summary judgment is granted. The taxpayer's motion for summary judgment is denied. The court will issue judgments affirming the decisions of the county board of taxation for the tax years at issue.
— By Debra McLoughlin
For plaintiff — Frederick C. Raffetto (Ansell, Grimm & Aaron). For defendant — Michael J. Gilmore (Gilmore & Monahan).