UNION, NJ – Tax time is just another reminder to Union officials that two businesses in the township are getting a free ride when it comes to property taxes and that is not sitting well with them at all.
Under normal circumstances, establishments like the farm-to-table gourmet restaurant Ursino, which opened its doors in the Center for Science, Technology and Math Education at Kean in 2011, would be paying $53,915 in property taxes. Barnes and Noble, which opened in late 2013, would also be legally obligated to hand over to the township $24,200 to satisfy their tax obligation.
However, because state universities and colleges are not required to pay local taxes, or for that matter even go before local planning or zoning boards when constructing new buildings, they have managed to keep the tax collector at arms length, for now.
Back in 2013 the township decided enough was enough and levied the tax anyway on Ursino. Kean University promptly appealed the decision in county tax court but the township won. Although they expected the university would move forward and pay the tax, they turned around and appealed the decision to a higher court.
This left the township in tax limbo, waiting, yet again, for a ruling to be handed down from a higher court. To say Mayor Manuel Figueiredo was frustrated by the township becoming involved in more legal red tape with Kean would be an understatement.
“Kean University’s leadership is continuing legal maneuvers to appeal and walk away from their obligations which left a $78,115 hole in the assessments on both these properties,” the mayor said.
Although township officials fully intend to continue to fight for what they believe is right, it has been a long, uphill legal battle with no end in sight.
Figueiredo candidly admitted he had enough of the stalling and getting dragged through court. He blasted not only the two businesses that pay no property taxes to the township but also Kean University and the board of trustees for “repeatedly abusing the taxpayers of Union.”
“Like people all across the country, I had to file my taxes today. While that can be a painful day for people in Union Township and across the country, I take some solace in knowing it is just one day out of the year in which I will need to write that check,” said the mayor, but added “unfortunately, we cannot say the same when it comes to our dealings with Kean University.”
“We are all continuously left writing checks as a result of their fiscal mismanagement, bad decision making and outright refusal by Kean University to handle their fiduciary responsibilities,” he said.
Figueiredo went on to explain that the consequences of Kean’s decisions affect all Union taxpayers who end up paying the university’s bills while they spend more money.
“Kean University leadership continues to spend recklessly and do whatever they want with impunity,” the mayor added, pointing out the state university has had plummeting enrollment numbers, skyrocketing tuitions and consistently downgraded credit ratings that “clearly have had no impact on University President Dawood Farahi and the board of trustees.”
“How else could you explain their decision to push for construction on two additional dorm facilities while they are sitting on over 300 empty beds right now?” said Figueiredo.
The mayor also brought up the university’s decision to buy the $219,000 conference table handcrafted in China, while Kean remains $330 million in debt and hands out $19 million in taxpayer funded administrative salaries, including a $200,000 bonus for Farahi.
“But they have the nerve to dispute the $78,215 they owe our community in taxes?” Figueiredo added.
“Farahi and the board of trustees repeatedly abuse taxpayers in the township and across New Jersey every other day, so it is only fitting they follow through on tax day while the rest of us pay our bills and recognize the necessity of living within our means,” the mayor said, adding “and why wouldn’t they when we continue to be the ones footing the bill for their irresponsible actions.”
In 2013 the township sent Ursino a surprise $50,000 tax bill in January, the first one the restaurant received.
Township Administrator Ron Manzella explained there is a special provision in the law that allows a municipality to levy a tax if a state run facility rents the property to a for-profit business.
While Gourmet Dining Services, the operator of the restaurant, did not object to receiving a tax bill, they did have a problem with the amount and appealed the bill. The tax court eventually sided with the township and Kean immediately appealed the decision, tying the township’s hands once again.
Because Ursino is on university property, they avoided the usual problem most businesses face when trying to open a restaurant: obtaining a liquor license. If a restaurant is on state property, the operator bypasses local authorities and goes directly through the state to obtain a license to sell alcoholic beverages, paying just $1,000 for that privilege.
There are other advantages, too. Usually when a proprietor wants to open a restaurant, they face an uphill battle in getting a liquor license since each municipality only issues a certain number of licenses, depending on the population. Once this number is reached, no additional licenses can be given out until a restaurant closes and the license is up for grabs.
According to a restaurant owner who obtained a liquor license in Union, it does not come cheap. In fact, he said, a license to sell alcoholic beverages in an establishment can run as high as $100,000.
A municipality, though, does not get involved except when it comes to issuing the license.
Sources said Gourmet Dining Group, owned by the Frungillo Brothers, received a ten-year, no-bid contract extension for food services at Kean, in addition to the right to operate the farm-to-table fare at Ursino to paying customers. But students can rarely afford to eat at this upscale restaurant because the prices are too steep for their budgets.
But while Ursino is supposed to be a culinary trend setter, it is bleeding money. Sources within the university administration have confirmed the facility is losing money, but the loss will continue to be made up by Kean’s food services contract. Enough, perhaps, to pay their tax bill, after all the appeals run their courses.
As for Barnes and Noble, this chain business took up residence in the group floor of the new Kean building at the corner of Morris Avenue and Green Lane. Upstairs, in a room with a wall of windows overlooking the Manhattan skyline, is the $219,000 conference table Farahi ordered from China.
In addition to its normal merchandise, Barnes and Noble sells university related books and apparel, along with housing a Starbucks coffee franchise. The two businesses are profit makers, but it is unknown how much earnings were realized in year one and two. The facility is open to any consumers, and not simply students.
According to township officials, they fully intend to stay the course until Kean legally meets their tax obligations.