Apparent confusion over the the impact of a recent court case has officials at PHS Senior Living putting out word that they don’t intend to seek tax-exempt status for the organization’s showcase senior-living project in Red Bank.
The Princeton-based not-for-profit is expected to pay about $360,000 in property taxes this year on Atrium at Navesink Harbor, on Riverside Avenue. Chuck Mooney, PHS’s chief operating officer, says he expects that figure to double on completion of an approved six-story addition to the Riverside Avenue facility, and to approach $900,000 annually if a pending request to take the addition up to 12 floors is approved by the borough planning board.
But no matter how big the project ends up, PHS has not and will not push to have its property removed from tax rolls, Mooney tells redbankgreen.
“We definitely will not be seeking tax-exempt status,” he says. “There’s no basis for it in the law.”
PHS officials felt compelled to say as much at last week’s zoning board meeting, where they were appearing in pursuit of a plan to create a valet parking lot on the triangular property at the confluence of Riverside, West Front and Pearl streets. No decision has been reached on that plan.
Mooney says that prior to the start of that session, he heard that “there was some concern among the leadership in Red Bank” that a push for tax-exempt status by PHS might be in the offing. So he had an attorney make a statement at the hearing to the effect that no change was being sought, he says.
Previously, Councilman Mike DuPont had told reporters of a court case involving PHS that he interpreted as a sign that the organization would seek to get out from its tax obligations.
As recently as Tuesday morning, DuPont was insisting that PHS officials “should come clean” about their intentions.
A state Appellate Court decision last month reversed a tax court ruling that said the town of Pennington could tax a PHS-owned assisted living facility there. The appeals court held otherwise.
At issue, says Mooney, is the distinction in regulations and the law between assisted living facilities and continuing care retirement communities, or CCRCs. The former are considered traditional, “inherently beneficial” healthcare facilities, and are thus tax exempt, Mooney says; the latter, which like the Atrium often include luxury apartments, housekeeping services and gourmet meals along with health services, are considered discretionary, and subject to taxes.
The Pennington case concerned an assisted living facility, and was closely watched by the provider community, as well as municipalities that have such facilities, as a bellwether.
Two areas of the Atrium are tax-exempt: a 43-bed skilled-nursing facility and 15 residential healthcare units that are the equivalent of assisted living units, Mooney says.
Otherwise, the rest of the units and common areas at the riverfront high-rise are taxable. Residents don’t own their units, but pay up to $1 million in entry fees, plus monthy charges in the thousands of dollars, in exchange for full-service luxury and medical care.
The approved addition would add 60 CCRC units, and a 12-story addition would add 84. No part of either plan, however, would be tax-exempt, Mooney says.
“It’s all taxable,” he says.
Informed of Mooney’s assertion that no tax status change would be sought, DuPont said, “That’s good to hear. There sure is great concern about it.”
Here’s the appellate decision.