By JOHN T. WARD
Bombarded by criticism from the business community, the Red Bank council on Wednesday dropped a plan to pursue a new round of “reverse appeals” against commercial properties it believed to be undertaxed.
But first, the council approved the settlement of an older reverse appeal that will boost the taxable value of a downtown building by 69 percent over three years. And battles over cases filed in 2018 continue.
An effort to “turn the tables,” in the words of Mayor Pasquale Menna, on large-scale commercial property owners who routinely file tax appeals, the council hired the firm of Blau & Blau of Springfield as special counsel to pursue reverse appeals in March, 2018.
The approach challenged assessments by tenured borough Assessor Mitch Elias, of whom Menna has frequently been critical, on office buildings and apartment complexes.
But with a new round of nine appeals up for approval by the council at its semimonthly meeting Wednesday, the governing body came under constant fire from some of the affected property owners and others who were not slated for lawsuits.
They voiced concern that potential investors would avoid the town, not knowing if or why they might be sued over valuations, and spoke from a sense of personal affront.
Jay Herman, a principal in Downtown Investors, which has three properties targeted for appeals, said his family-owned business had spent some $20,000 in legal fees over the past year fighting the appeals, which he said were filed “with no rhyme or reason.”
He called the appeals “an attack on my family,” despite its work in helping to restore the downtown economy with investments starting in the days when the town was known as “Dead Bank.”
“We have never, ever appealed our taxes in 30 years, even though we feel they’re higher than they should be,” Herman said. “What you’re doing here is terrible.”
Asked by redbankgreen if Blau & Blau had ever told him the criteria used to identify properties for the appeals, Herman said, “there is no criteria.”
George Sourlis, whose family owns the Galleria complex of offices and restaurants on Bridge Avenue, which is among the targeted properties, said the suits would undermine recent progress in the convincing investors that the town was business-friendly.
“Perception is reality, and this is a big step backwards,” he said.
“I’m shocked” by the borough’s action, said Ingeborg Perndorfer, owner of the Language School on Broad Street and two downtown buildings. “It’s like you’re tearing the fabric of our community apart.”
Her properties were not among those targeted for legal action, nor were those owned by the Philip J. Bowers Company, whose principal, Samantha Bowers, also voiced fear that any business could be sued without apparent reason.
“Quite frankly, we’re scared of what’s happening here,” she said. “It’s a shame that you’re targeting the business community.”
None of the owners being sued had ever filed a tax appeal, Red Bank RiverCenter executive director Jim Scavone told the council.
Branch Avenue resident Steven Hecht, who has been critical of Elias for years, told the council that it needed to confer with Monmouth County about his work and its adverse impacts on the borough.
“It seems to me that the root cause of all this is that we have a tax assessor who is incompetent,” Hecht said. “It’s not sufficient to say there’s nothing we can do about it. Tenure is not a job guarantee.”
After a closed-door session, the council voted unanimously to instruct Blau & Blau to voluntarily withdraw all 2019 reverse appeals. With only a handful of people in the audience, Herman thanked the council for listening to the business community.
The withdrawal, however, applies only to the 2019 cases. Of the nine properties affected, eight are the subjects of 2018 appeals. The one exception is the Saxum Real Estate property at 55 Broad Street, the vacant former bank building now branded the Vault.
Separately, the council approved the settlement of an appeal undertaken outside the umbrella of the Blau & Blau contract.
The settlement concerned the former Hovnanian Enterprises headquarters at West Front Street and Maple Avenue. In October, 2017, OceanFirst Financial bought the property from Hovnanian for $42.5 million, believed to be the largest real estate transaction in borough history.
The property was assessed at $16.5 million for 2018, with a preliminary assessment for 2019 of $35.3 million. The borough challenged the 2018 assessment.
Under the settlement, the assessment will increase to $24.9 million for 2018; to $26.9 million this year; and $27.9 million for 2020, for a total increase of 69 percent.
That case was handled by borough special counsel Martin Allen and reviewed by appraiser Robert Gagliano, according to the resolution approved by the council.