The University reached a settlement with a group of Princeton homeowners who sued to challenge the University’s property tax exemption status, the University announced in a press releaseFriday.
The settlement, which leaves the University’s property tax exemption intact, comes just before the trial in the courtroom of Tax Judge Vito Bianco set to beginon Monday. The University previously stated it was prepared to go trial.
The agreement stipulates that the University will contribute $2 million per year in 2017 and then $1.6 million per year for the five years thereafter to a fund that will help to abate the property taxes of lower-income homeowners who qualify for a homestead benefit under New Jersey law.
The University also agreed to continue its annual voluntary contribution of $3,480,000 to the town in 2021 and 2022, after the current voluntary contribution agreement ends in 2020.
Finally, the University agreed to make three contributions of $416,700 to the Witherspoon Jackson Development Corporation from 2017-2019.
Even though it comes after a series of defeats for the University on rulings as to motions filed with the Tax Court, the settlement is significantly lower than earlier estimates that the University could be liable for as much as $40 million in annual property tax liability. Bianco had previously ruled against a Morristown hospital in a non-profit tax exemption case that appeared to be similar to the one filed against the University.
In describing reasons for the settlement, University Vice President and Secretary Bob Durkee ’69 noted that the University believed it to be a better judgment to help lower-income homeowners and preserving the diversity of the town than to incur the legal expenses in pursuing the trial.
Previously, Durkee and other University officials said that the probability of a settlement was fairly low. In an interview with the ‘Prince’ immediately after the settlement, Durkee explained that the University “can’t seriously consider the settlement without an agreement that reflects the interest of both sides.”
The plaintiffs agreed to withdraw the outstanding complaints.
More to come…