N.Y. Bay R. Co. v. Kelly

• Decision Date: 25 April 1944
• Citation: 37 A.2d 624
• Parties: NEW YORK BAY R. CO. et al. v. KELLY, State Tax Com'r. JERSEY CITY v. KELLY, State Tax Com'r, et al. CITY OF HOBOKEN v. SAME.
• Court: New Jersey Tax Court

37 A.2d 624

NEW YORK BAY R. CO. et al.

v.KELLY, State Tax Com'r.

JERSEY CITY

v.KELLY, State Tax Com'r, et al.

CITY OF HOBOKEN

v.SAME.

New Jersey State Board of Tax Appeals.

April 25, 1944.

Petitions of appeal by the New York Bay Railroad Company and others, the City of Jersey City, and the City of Hoboken, respectively, from assessments of petitioners' properties by William D. Kelly, State Tax Commissioner.

Assessments affirmed in part and revised in part.

John A. Hartpence, of Jersey City, for petitioner Pennsylvania R. co.

Charles A. Rooney and Joseph C. Glavin, both of Jersey City, for petitioner City of Jersey City.

John J. Fallon, of Hoboken, and Frank P. McCarthy, of Jersey City, for petitioner City of Hoboken.

David T. Wilentz, Atty. Gen., and Milton B. Conford, Ass't Atty. Gen., for the State.

BY THE BOARD.

Petitions of appeal filed by the City of Jersey City, the City of Hoboken and by the New York Bay Railroad Co. and United New Jersey Railroad and Canal Co., the property of which is controlled and operated for railroad purposes by the Pennsylvania Railroad Company, complaining of the assessment by the State Tax Commissioner of the property of said companies, for the year 1943, have been heard together, in accordance with agreement of counsel.

The petitions set forth the following complaints:

1. The Pennsylvania Railroad Company alleges that certain of its Class II lands in Hudson County and its Class I or main stem lands on the New York Bay Railroad Co. and the United New Jersey Railroad and Canal Co. are assessed in excess of their true value.

2. The City of Jersey City alleges that certain parcels of Class II land of said companies are assessed at less than true value and seeks an increase thereof. Included in the petition of appeal by the city are certain Class II lands and structures as to which no complaint is made by the railroad company. Jersey City also seeks a reclassification to Class II of some of the lands of the railroad company assessed as Class I, but the board has withheld receipt of any testimony in support of this claim in order to expedite the disposition of the valuation issues at as early a date as possible and therefore this opinion will not dispose of that feature of the city appeal.

3. The City of Hoboken alleges that the Class II property, consisting of land and structures at the marine repair yard of the railroad company on the Hudson River, located in that taxing district, are assessed at less than true value and seeks an increase thereon. Although Hoboken claims that certain property classified as Class I is ‘improperly classified and assessed,’ no proof or tender of proof in support thereof has been made by the city and the same will therefore be deemed abandoned.

4. The State of New Jersey, through the Attorney General, appears in opposition to the various grievances presented, but during the course of the hearing it was conceded by the State that some of the property assessed requires revision of the State Tax Commissioner's values by the Board.

For the sake of clarity, our discussion of the property under appeal will be divided as follows: (1) The Waterfront Terminal Lands in Jersey City; (2) The Marine Repair Yard Lands in Hoboken; (3) The Journal Square Area Lands; (4) Main Stem Land Values; (5) Jersey City Structures; (6) Hoboken Structures.

1. The Waterfront Terminal Lands in Jersey City.

These Class II lands comprise the bulk of the assessed valuations in dispute between the railroad company, the City of Jersey City and the State. The railroad company seeks reductions, the City, increases, and the State, through the Attorney General, an affirmance of the valuations assessed. The areas are known as Greenville terminal of the railroad company, some 372 acres in size and located on New York Bay; the main line or Exchange Place terminal of the railroad company on the Hudson River, some 39 acres; the Harsimus waterfront terminal tract, some 110 acres and contiguous to the Exchange Place tract at the waterfront. These two latter tracts are in effect a single assemblage, available, and actually used, in its entirety, for various railroad purposes.

The Greenville terminal is assessed at the rate of $20,250 per acre. Five qualified real estate experts for the City of Jersey City valued these lands from $25,000 to $30,000 per acre. Two qualified experts for the railroad company testified to values of $10,000 and $11,800 per acre.

The Exchange Place terminal tract is assessed at $97,000 per acre. The city experts testified to values from $117,600 to $125,000 per acre and the railroad experts appraised it at $65,000 and $69,700 per acre.

The Harsimus yard is assessed at $85,050 per acre, the values of the city experts being $117,600 to $125,000 per acre and the railroad witnesses testifying to valuations of $54,000 and $60,000 per acre.

The State has contended that the appeals both by the City and the railroad company on these waterfront tracts should be dismissed on the basis of the counterbalancing effect of the opposing groups of witnesses, the reasonableness of the past course of assessment of these properties by the State Tax Department, the difficulty of applying as criteria of value such sales as have taken place, and the great weight which, under the various decisions of our courts, must attend the judgment of the State Tax Commissioner in the valuation of such unique properties as these, in view of his statutory right to use ‘his personal knowledge and judgment’ in assessment of railroad property. R.S. 54:29A-67, N.J.S.A.

The authorities cited in our opinion filed in Shelton Pitney and Walter P. Gardner, trustees, etc. v. William D. Kelly, 34 A.2d 547, 21 N.J. Misc. 405 (dealing with the 1943 appeal of Central R. R. Co. of N. J.), the general discussion therein with respect to valuation of property having availability for railroad purposes, the references to sales and to the attitude of this board toward assessments of railroad property, generally made by the State Tax Department under the direction of Mr. Louis Focht, may all be regarded as applicable to our consideration of the specific water-front tracts here under appeal, except as otherwise stated in this opinion. There is a wealth of legal authority dealing with the valuation for tax purposes of railroad terminal lands on the Hudson River and New York Bay, some of the cases dealing with the very property under appeal. Long Dock v. State Board of Assessors, 78 N.J.L. 44, 73 A. 53, affirmed 79 N.J.L. 604, 80 A. 1135; Long Dock Co. v. State Board of Assessors, 82 N.J.L. 21, 81 A. 568, affirmed Long Dock Co. v. Strong, 84 N.J.L. 762, 88 A. 1103; Long Dock Co. v. State Board of Assessors, 89 N.J.L. 108, 97 A. 900, affirmed 90 N.J.L. 701, 101 A. 367; Pennsylvania Railroad Company v. Jersey City, 98 N.J.L. 283, 119 A. 99, 125 A. 921; United New Jersey Railroad & Canal Co. and other Companies v. State Board of Taxes & Assessments, 100 N.J.L. 131, 125 A. 335; United New Jersey Railroad & Canal Co. and other Companies v. State Board of Taxes & Assessments, 101 N.J.L. 303, 128 A. 427; United New Jersey Railroad & Canal Co. and other Companies v. State Board of Taxes & Assessments, 103 N.J.L. 33, 134 A. 669; Lehigh Valley Railroad Co. v. State Board, 174 A. 359, 12 N.J. Misc. 673.

In Long Dock Co. v. State Board of Assessors, 89 N.J.L. 108, 97 A. 900, affirmed 90 N.J.L. 701, 101 A. 367, a case involving the question of valuation of a railroad waterfront terminal on the Hudson River immediately north of the Harsimus terminal here under appeal, the court, at page 111 of 89 N.J.L., at page 901 of 97 A., summarized the valuation problem as follows:

‘There were three principal questions to be practically treated: (1) What was the value of the various parcels per se for average business or other purposes? (2) Did they have any greater value for railroad purposes irrespective of railroad franchise, and, if so, how much? (3) In connection with (2), was any greater value imparted to them because assembled into a connected whole appropriate to a railroad terminal, and if so, what? Both Messrs. Record and Hendrickson (member of the Board), as their testimony seems to indicate, testified from experience to the increment of value due to assembling and availability for special use. It is now argued that such an element of value cannot be considered, and the United States Supreme Court case of New York City v. Sage, 239 U.S. 57, 36 S.Ct. 25, 60 L.Ed. 143, is relied on. But we agree with counsel for defendants that it is not on the point, for it is a condemnation case and relates to the value of an outside tract before assemblage, a very different thing from an integral part after assemblage. It is elementary that in combining two or more tracts of land for a purpose requiring both or all together, the value of the whole may well be more than the total of the parts separately. * * *’

The foregoing views were merely a restatement of prior holding of the courts. Long Dock Co. v. State Board of Assessors, 78 N.J.L. 44, 73 A. 53, affirmed 79 N.J.L. 604, 80 A. 1135. In Long Dock Co. v. State Board of Assessors, 82 N.J.L. 21, at page 22, 81 A. 568, affirmed Long Dock Co. v. Strong, 84 N.J.L. 762, 88 A. 1103, the court referred to the decision in 78 N.J.L., supra, as follows:

‘The opinion in the case cited also held that the market value of terminal property due to its availability for railroad purposes generally was a legitimate basis for its assessment for taxation. This value the state board has assessed in the present case.

The fact that the present assessment does not greatly vary from the previous one does not involve the violation of any principle of law, or show that the legal principles laid down for the guidance of the board have been disregarded. All that it shows is that in the judgment of the board the value of these terminal lands for railroad purposes generally was substantially identical with their value...