Bettering Plainfield with the facts since 2005

Wednesday, September 1, 2010

What about Muhlenberg's tax exemption?

Aerial view of the 17-acre Muhlenberg campus. (Google Maps)

As Olddoc reminds us today (see here) Plainfield enters a fresh budget season as summer comes to an end with the Labor Day holiday.

And my thoughts turn to the Muhlenberg campus and its tax exemption.

Whatever numbers the Robinson-Briggs administration provides to the Council for the current fiscal year's budget, the Council will still be faced with the perennial dilemmas: ever-increasing health-benefits and pension pay-in costs will drive another search for places to cut (Recreation? Seniors? Public Works?) in an effort to define just what are the city's 'core services'.

Another way to approach the problem is to look at expanding the tax base, not just piling more on the backs of the already overburdened residential property owners.

Despite efforts by Frank Cretella to get some development projects going, the overall impression is that Robinson-Briggs is not very encouraging to developers.

But the media recently has picked up on developer interest in the 17-acre Muhlenberg campus (see here).

Though Solaris declined to identify prospective buyers or plans for the Courier's Mark Spivey, rumors continue that at least one developer is not at all interested in a healthcare-related use, but is eyeing the property for residential development. (That is 'thinking down the road', given the current state of the housing market.)

At the same time, some are questioning the CONTINUATION OF THE TAX-EXEMP STATUS of the large Muhlenberg campus, given that there are profit-making activities carried on in addition to the satellite emergency unit mandated by the state as a condition for closure of the acute-care facility two years ago.

Also, since the acute-care hospital function has been abandoned by Solaris, the parent organization of Muhlenberg and JFK, the city might be in a stronger position if it were to hold some property taxes should be assessed against the now-exempt facility.

Today's Courier reported the courts sided with Hunterdon Medical Center in a tax appeal case (see here), where the town had held that HMC's health and fitness center did not meet the state's 'hospital purpose' threshold.

One has to wonder if the city would be on stronger ground than Readington if it asserted taxes were due, especially since Solaris has abandoned the 'hospital purpose'.

Any talk of taxing the property, though, would hinge on a valuation.

While a lot of numbers have been tossed out in the past few years (remember that Solaris was hoping for $100 million for a piece of the campus back in the heady days when Assemblyman Jerry Green proposed building a public school on the property), the current market is quite sobering.

The most likely comparison for the Muhlenberg campus is the pending sale of the 230-bed Meadowlands Hospital in Secaucus for $15 million to the for-profit MHA LLC (see here). According to a Plainfield activist who attended the state hearing on the sale held last week, the matter will be taken up by the state again at the end of September. (The state has questioned the price as low and challenged the lack of a public bidding process.)

In any event, finding a way to bring at least some of the 17-acre campus onto the tax rolls would benefit Plainfield tax payers in the long run, especially if Solaris looks to exit the entire situation when its mandated maintenance period for the SED ends next year.

-- Dan Damon [follow]

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Dottie Gutenkauf said...

Dan, the mandated period for maintaining the Emergency Room at Muhlenberg was five years--starting in 2008. That's 2013. In the meantime, as those getting my Muhlenberg updates know, Solaris is planning an expanded "Emergency Pavilion" to be completed in 2013. Could this be coincidental?

The Meadowlands situation is interesting--I hope we'll get more information at our POP/Restore Muhlenberg coalition meeting tomorrow. (Anyone not getting my updates and wanting to should email me so I can add them to the list. It's

Dan said...

Dottie -- You're right about the 5-year window. Solaris proposed three and the state mandated five after lots of citizen input.

As for the 'pavilion', if Solaris asks for a subdivision of the property (as with the nursing school), I guess we'll have a pretty clear indication.