University Eating Clubs Must Pay Their Way, Says State

Candace Braun

Legislation passed last week by the state Senate gives the final go-ahead for bill clarifications preventing private clubs such as Princeton University's Cottage Club from obtaining tax-exempt status.

The Senate passed the bill 30 to 7, and the Assembly voted 69 to 2, with 4 abstentions. Passed on Monday, December 13, the measure will now be sent to Acting Governor Richard Codey, who has the opportunity to sign it, veto it, or modify it.

The legislation is intended to clarify and update the qualifications for a non-profit organization seeking to obtain a historic site property tax exemption on any certified historic site it owns. One of the most significant provisions would require that the non-profit organization managing the site has a mission in historical research, preservation, and interpretation.

The bill was introduced in response to attempts by the Cottage Club to use their historic site status to gain tax exemption on the property. The bill was sponsored by Assemblyman Reed Gusciora (D-Mercer), a Borough resident, and Assemblywoman Bonnie Watson Coleman (D-Mercer).

"The Cottage Club...is interested only in gaining the benefits of being designated a historic property without having to meet any obligation to the general public," said Mr. Gusciora. "[It] is looking for a free meal at the expense of other Princeton property taxpayers."

The Cottage Club's house on Prospect Avenue in the Borough was entered into the New Jersey Register of Historic Places in September 1999. However, the club remains a private organization open only to current University members, alumni, and invited guests.

The eating club's mansion, built in 1904, has been assessed at $1.5 million, and pays more than $50,000 annually in property taxes to the Borough. If it and the other 11 University eating clubs were tax exempt, the Borough would lose more than $500,000 a year in revenue.

The University's payment to the Borough in lieu of taxes, as a non-profit institution, has always been a sore subject among Council. In the past, some Council members have suggested that if the University were to pay full taxes on its land, which takes up approximately 50 percent of the Borough, the municipality would be able to cut its tax burden in half.

Adding an eating club to the list of nonprofit institutions, which also includes Princeton Theological Seminary and the University Medical Center at Princeton, would add to an already swelling tax rate in town.