Twp. of Green v. Life With Joy, Inc.
| Decision Date | 24 March 2022 |
| Docket Number | 013541-2019,009068-2018,009572-2016,010728-2020,008566-2017 |
| Parties | Township of Green, a municipal Corporation of the State of New Jersey, Plaintiff, v. Life With Joy, Inc., A New Jersey non-profit corporation Defendant. Life With Joy, Inc., A New Jersey non-profit corporation Plaintiff, v. Township of Green, a municipal Corporation of the State of New Jersey Defendant. |
| Court | New Jersey Tax Court |
Robert B. McBriar for Township of Green, (Schneck, Price, Smith & King, LLP., attorneys)
Jay J Freireich for Life with Joy, (Freireich, LLC., attorney)
BIANCO, J.T.C.
This shall constitute the court's formal opinion[1] concerning consolidated appeals from various decisions of the Sussex County Board of Taxation ("County Board") concerning the tax-exempt status under N.J.S.A. 54:4-3.6, of property owned by Life with Joy ("LWJ") located within the Township of Green ("Township") at 3 Fox Run, and designated by the taxing district as Block 18 Lot 67 ("Subject Property"). Specifically at issue is whether or not the Subject Property is actually used in furtherance of LWJ's charitable purpose, and whether or not it is impermissibly used to make a profit. LWJ has appealed the County Board's denials of a tax exemption for Tax Years 2017, 2019, and 2020. The Township appealed the County Board's decisions to grant the exemption in Tax Years 2016 and 2018.
For the reasons more specifically set forth herein, the court: (1) grants LWJ's appeals for 2017 and 2020, reversing the judgments of the Board, finding that LWJ has met its burden of satisfying the elements of N.J.S.A. 54:4-3.6 (2) denies the Township's 2016 and 2018 appeals, affirming the judgments of the County Board; and (3) dismisses LWJ's 2019 appeal for lack of jurisdiction.
LWJ is a nonprofit New Jersey Corporation and a Federal 501(c)(3) Organization created in 2014 by Susan and Gary Kolb (collectively the "Kolbs"), who are married to each other, to be a living and learning center for young adults with developmental disabilities. Ms. Kolb[2] serves as executive director of LWJ and is president of the board of trustees. As president, Ms. Kolb ensures LWJ stays true to its mission to provide living arrangements and life skills training to young adults with developmental disabilities, primarily autism. In 2015 LWJ purchased the Subject Property largely with the Kolbs' inheritance.
The Subject Property is comprised of a two-story five-bedroom house on about three and a half acres. LWJ uses the house in furtherance of its goals to provide living arrangements and life skills training to young adults with developmental disabilities. The house has a 2, 000 square foot basement with a full gym, a six-person capacity movie theater, a craft area, and a storage pantry where clients can practice warehouse skills. They cook meals in the kitchen and eat in the dining room. The house also contains a makeshift green house, a chess room, and a library. LWJ maintains an office in the house to comply with the Division of Developmental Disabilities' (DDD) rules.[3]
To facilitate the management of LWJ, the Kolbs entered into an automatically renewing lease with LWJ on October 1, 2015, by which the Subject Property became, and continues to be, their primary and only residence. They live there as full-time caregivers to LWJ's clients. Their starting rent was $1 500 with an automatic yearly increase of $25. LWJ pays for utilities, cable, and internet. The Kolbs and all other residents make use of these amenities.
At present, LWJ has two clients leasing rooms.[4] The Kolb's son has leased since LWJ acquired the property. Another individual has a lease with LWJ, which runs from August 1 2021, through July 31, 2022, at a rate of $2, 790 per month. One bedroom is deliberately kept open for residents' family visits, or respite. Respite is an opportunity for individuals with developmental disabilities to stay at the Subject Property temporarily in other to take a break from their current living situation, or to provide an individual the necessary care and safety precautions while that individual's regular care provider takes a break.
Over the years, multiple clients have spent varying amounts of time living at the Subject Property, however, not all of them are evidenced by leases. For instance, one individual moved in to the Subject Property at the end of 2019. Two other individuals spent time renting at LWJ in its early years as well.
In addition to their full-time residential clients, LWJ hosts several clients on a daily basis at the Subject Property. Regardless of residential status, clients pay for the activities and services in a similar manner. Once an individual with developmental disabilities becomes twenty-one, they are required by DDD eligibility requirements to take a state administered N.J. Comprehensive Assessment Tool (NJCAT). The DDD uses the NJCAT to evaluate an individual's support needs. The NJCAT's results also determine an individual's annual budget amount from DDD. In order for clients to pay LWJ via their DDD budgets, LWJ first had to be certified by DDD. In 2017, LWJ applied for DDD certification, and after correcting issues discovered by an audit, LWJ secured DDD certification in 2018.
Once funding is secured, a support coordination agency is selected which helps write a program that LWJ must follow. From the program, the client creates a personal budget in which they determine what services they will require or activities they will participate in. LWJ must then keep notes and maintain records as to how LWJ is working to further the individual's program and achieve their goals.
Even before LWJ obtained DDD certification, LWJ paid the teachers. Originally LWJ used the Kolbs' inheritance to pay the teachers 100 dollars per hour. When the inheritance ran out, Ms. Kolb explained that they would pass a hat around to collect money for the teachers.
One of LWJ's goals is to find a place for their clients to work. In furtherance of that mission, LWJ emphasizes pre-vocational and vocational skills. Ms. Kolb explained that pre-vocational classes simply teach job skills. LWJ's primary pre-vocational focus is gardening because the Kolbs discovered that gardening is tailored to specific habits of people on the autism spectrum. Accordingly, LWJ uses its four gardens, the green house, and a myriad of houseplants to teach responsibility and healthy eating habits. From the fruits of their labor, under supervision, clients at the LWJ house prepare meals and snacks. To facilitate these programs and activities, LWJ relies on staff and volunteers.
LWJ hosts activities and facilitates classes throughout the week, and while each activity may not happen every day, Ms. Kolb maintained that the whole of the Subject Property is used all the time every day. Ms. Kolb testified that there is always someone at the Subject Property because it is never really closed. Generally, over the weekends there are three to four people at the Subject Property, but for special events they can host between twelve and fourteen individuals.
A typical day at LWJ consists of the clients engaging with one another and their community. This can be through off-site hikes, trips to the store or restaurants, or horseback riding. Clients may also exercise, cook, practice social skills, and make podcasts on the Subject Property. Some days, LWJ hosts a drum circle or an African drumming class with dancing to provide an opportunity for parents and clients to participate in activities together. Residents and clients do not need to participate in every activity and class.
In 2016 and 2017, LWJ hosted classes at the Subject Property. However, in November 2016, the Township sent LWJ a letter informing them that they were violating zoning laws by charging for classes conducted on the Subject Property. The letter also explained that LWJ did not have any of the necessary permits to make food and host parties on the Subject Property and any commercial use of the Subject Property violated the Township's zoning ordinance. In response, LWJ moved some of their classes to the nearby Western Hills Christian Church. Dissatisfied with that response, the Township sent LWJ a notice of violation on May 23, 2018. The notice outlined the specific alleged zoning violations. Ms. Kolb testified that they did not go to the Zoning Board or any other municipal authority prior to purchasing the Subject Property because they had spoken to the mayor and were under the impression that they had the Township's blessing to use the Subject Property in the way they intended.
Paying no heed to the Township's May 2018 letter, LWJ continues to use the Subject Property with clients for other activities. Notably, clients use the basement gym facilities with the help of private trainers and personal aides. These trainers and aides are getting paid for their work on the property through the clients' personal state budget via the DDD programs. The personal trainers are not LWJ employees but rather 1099 contractors. While the aides and trainers are not restricted to the spaces in which they work, they have no reason to go upstairs into the residents' living quarters.
There is no evidence before the court that LWJ is being fined by the Township for its alleged zoning violations, or that the Township, (other than its May 2018 letter) has taken any action to put a stop to the activities of LWJ on the Subject Property.
Pending before this court are appeals for Tax Years 2016, 2017, 2018 2019, and 2020. The County Board granted LWJ the tax exemption in 2016 and 2018 and the Township appealed that decision for each year. The County Board denied the exemption in 2017, [5] 2019, [6] and 2020;[7]LWJ...
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