Cottage Bill passed by state assembly, 71-1-4

The passage of what became known as the "Cottage Bill" by both houses of the state assembly on Dec. 13 may affect many historic properties in New Jersey, including the bill's namesake.

Cottage Club's application for tax-exempt status in 2001 spurred the bill, which revises the criteria for historic sites attempting to gain exemption from property taxes.

The eating club is currently designated a state historic property. However, this classification does not automatically make a property tax-exempt — the club still pays around $59,000 in taxes to the Borough annually, said Assemblyman Reed Gusciora.

The new bill requires that buildings applying for tax exemption meet stricter guidelines.

Properties must have a "primary mission as an historical organization to research, preserve and interpret history and architectural history," the bill reads.

Furthermore, a building must be open to the public for a minimum of 96 days each year, and the building owners must also meet certain qualifications as a nonprofit organization.

"I think it's important for Princeton property tax payers, out of fairness, that everyone pays their fair share of property taxes, which would include the Cottage Club, who enjoy fire and police services," Gusciora said.

The bill was passed by an overwhelming majority of the Assembly (71-1-4) on the Dec. 13 vote. Stressing that the bill was meant to support taxpayers' interests, Gusciora said he did not feel its passage would negatively impact historic sites in New Jersey.

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"I agree that there should be historic preservation. We should promote our buildings, but it should not be at the expense of taxpayers," he said. "The Cottage Club wishes to be an exclusive club, so they should not be exempt unless they want to open their parties to the public."

Before being voted on, the bill adopted an amendment on Dec. 6 saying that it would only affect properties seeking tax-exempt status after its passage.

Some, such as Karl Werner — a member of the Kellogg Club, which maintains historic mansions in Morristown — had expressed skepticism over the idea of a grandfather clause.

"Grandfathering [the bill] would probably be overturned in court. We can't have one set of laws for me and another set of laws for you. That would never hold up in court," he said.

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Gusciora disagreed, saying that many regulations have been grandfathered in statutes.

"It was never our intention to revoke anyone who had already gained the right of tax exemption, but at the same time there are 30,000 historic properties in the state, and if they were to be tax exempt, it would create real burdens," he said.

When asked if he felt that the bill was targeted as a response to Cottage Club, Gusciora said he was not sure why such a bill was not passed even earlier.

"I think it's almost a unique circumstance, what Cottage Club attempted to do. Everyone knows that they're an elite club. I think it was a selfish thing what they wanted to do. Given who the membership and alumni are, they could probably raise the money [for property tax] in the course of a weekend," he added.