By Victoria Hurley-Schubert, Staff Writer
A lawsuit is challenging the validity of some of Princeton University’s tax-exempt buildings assessed at a total of $120 million and may help taxpayers of Princeton Borough by adding $2.2 million to municipal coffers if successful.
Some 20 buildings are highlighted in the five-page document filed earlier this month. The suit was brought by four Borough neighbors who were incensed by the revaluation last year when their home values went up while the university’s tax burden went down. They are looking to bring some of these buildings onto municipal tax rolls.
Two performance venues are named in the suit: McCarter Theatre and Richardson Auditorium in Alexander Hall.
McCarter Theatre is not run by the university, but the university owns the land and buildings so it takes it as an exemption, said Mr. Afran. “We’re arguing that is a highly questionable exemption,” he said. “McCarter is really effectively a commercial theater operation. They do have some experimental theater and educational programs, but most of what they produce, I’d say 60 percent at least, are ordinary commercial productions.”
Richardson “is marketed by the university as a professional concert venue,” said Mr. Afran. “There is some minor use by students, very little; this is a professional venue and not entitled to a tax exemption, or shouldn’t be.”
”Alexander Hall is a major facility for student performance groups,” said Emily Aronsen, university spokesperson. The student orchestra uses it regularly for practice and the theater hosts guest speakers and lectures for the students and the public, which provides opportunity for learning outside the classroom.”
McCarter is also used for university purposes and holds student events, like the welcoming address for freshman orientation. “It’s not an academic class that is a learning opportunity, there are places on campus where students can engage in learning,” she said. “Even if it’s an event run by students or student event, they are still offering opportunities for our students to learn and access culture outside the classroom.”
The university’s health center, McCosh Infirmary, is also being challenged as a competitor to other for-profit clincs.
”McCosh Infirmary is not just a nurse sitting there bandaging football players when they come in from the field,” said Mr. Afran. “It’s a full-service medical office and it offers treatment on an insurance fee-for-service basis, like any medical practice anywhere in town.”
The infirmary is open to staff and students only and also sells insurance to students. “What this practice is doing is taking a pool of 10,000 and removing them from the local market for medical care,” said Mr. Afran. “I’m not saying they don’t have the right to do this, but it’s a commercial business that’s being run and it is not within the tax exemption and competing with local physicians. It’s not an academic service, they may be serving students as their market, but they are doing nothing different than any primary care physician in town does.”
”Supporting a university goes beyond the classroom,” said Ms. Aronsen. McCosh is part of the educational mission to keep students healthy and provides health educational programming to students. “McCosh Health Center exists to provide services to students, which is part of the university’s mission,” said Ms. Aronsen. “Like any university, there is a student health plan where students can get insurance through the university-offered student health plan or they can have private insurance.”
The infirmary is valued at $7.5 million and should be taxed at least $150,000, said Mr. Afran. “That’s a lot of money being lost as one example,” he said.
Another example of a multi-million dollar building not on the tax rolls is Dillon Gym, valued at $24 million, said Mr. Afran. The university sells memberships, similar to other public health clubs such as New York Sports Club, and should therefore be liable for taxes, he contends. “Most adults have some sports club memberships where they exercise. Just because one is a student is doing that doesn’t make the function academic,” he said.
Dillon Gym is a student recreational facility and is used for physical education classes, exercise classes and equipment. It is available for any student to use for informal recreational-type games and sports. Any student can use the gym and does not pay a membership fee, said Ms. Aronsen. The public can use Dillon for a fee of $479 for a half-year membership.
”It is expected that educational institutions will impose charges to help recover costs related to operations, so the fact that a facility may charge for a service, it does not change the educational use,” said Ms. Aronsen. “The fact that they charge the public does not change the fact it is there to serve students and does not change the use.”
The levy on the building would be about $400,000 if on the municipal tax rolls, said Mr. Afran.
Administrative buildings and companies operated out of university buildings are also being questioned by the lawsuit. The New South building is used for non-academic administration functions including, among others, Office of Design and Construction, TigerCard, Office of Human Resources, Office of Information Technology, Office of Technology Licensing, Office of Real Estate Services, Tiger Transit bus lines operated by First Transit Inc. a private for-profit bus company, Media Services and Mail Services.
This building houses administrative offices that support the university’s mission, said Ms. Aronsen. The building also houses class space and faculty offices for the creative writing program and dance studio space for the Lewis Center for the Arts. “If we’re building a new dorm, obviously the Office of Design and Construction is involved,” and TigerCard provides the student identification cards among other essential support functions, she said.
”New South office building contains a great deal of administrative offices, but most of them are not academic,” said Mr. Afran. “For example, technology licensing that is not an academic function, it’s purely a business function that any corporation does.”
Other companies are run out of this building, such as bus service called First Transit Inc. that runs Tiger Transit, the university shuttle service. “It’s a private, for-profit company that runs a bus company. It’s a private bus company that is running a bus service for Princeton,” said Mr. Afran. “All people use transportation, not just kids, not just college students, not just grad students and Tiger Transit is not operated by the university, it’s operated by a profit-making company, it’s a business.”
Tiger Transit ventures outside of the university and uses public roads that taxpayers support without contributing to the upkeep of the roads, he said. “It’s a major presence in the community now,” said Mr. Afran. “It’s introduced a great many heavy vehicles in downtown, so now there is a new municipal bus service that has large vehicles using municipal roads. It’s wearing them down like any heavy traffic would, it’s clogging up the roads to a degree, it adds noise and pollution and so it’s not a shuttle service, it’s a regular municipal bus service the university is running through a private company.”
Tiger Transit is essential to getting students and faculty around campus, said Ms. Aronsen. “Students and faculty use it to travel around campus, then it goes to locations outside the core gates of campus,” she said. “The university does not run Tiger Transit to make a profit, it is a service provided to faculty and staff.”
Another faculty and student perk, Prospect House, is a private university club for faculty and students that is not open to the public, said Mr. Afran. “In fact, they rent it out to faculty and students for weddings and bar mitzvahs, things of that nature,” he said. “It’s not an academic building, it’s simply a private restaurant that the university operates and is no different in function than the eating clubs. We did not challenge dining halls attached to dormitories, we would accept students living on campus need a place to eat their meals that’s within a college function. A private club on campus beyond the dining facilities is not an academic structure. The university says the faculty meet with each other there and students, that’s very nice, but all people in any business have places they meet. Starbucks serves that function and its not tax exempt.”
Prospect House contains faculty dining and event spaces, a meeting place for groups and other university events, said Ms. Aronsen. “It’s like a dining hall, but the faculty dining hall open to all faculty and staff. Members of the university community can use it for their events, it’s not a banquet hall,” she said. “It’s not something where any member of the public could rent out a space in Prospect House, it’s for the university community.”
”The club should be there, it serves a useful purpose, but they should be paying tax on it,” Kenneth Fields, one of the residents involved in bringing the lawsuit.
The other eating clubs pay taxes, said Mr. Afran.
The university’s on-campus publisher, Princeton University Press, is also being questioned.
This is not the first time Princeton University Press’ tax exemption has been challenged.
”There was litigation over Princeton University Press many years ago and they were held not to have an exemption because they engaged in commercial printing at the time, I don’t know what happened to allow them to claim an exemption for the University Press today, but the case law went against Princeton University Press because it did private printing for different clients, including the university,” said Mr. Afran. “Our position is Princeton University Press is a private corporation, it is not owned by the university; it does not only print for the university, it prints for anybody it wishes to. It often prints best-sellers and it has no obligation to the university and it is not part of the university, it is a business.”
The challenge was before Neal Snyder’s, the current tax assessor, time, but the exemption has come up for review during his eight years as assessor.
Even as a non-profit publisher, it is still a publisher and therefore should be liable for property taxes. “They may publish academic works, but they publish popular works also and make a great deal of money from it,” said Mr. Afran.
The University Press has a relationship with the university as its own-not-for-profit organization and Princeton University owns the building it resides in, said Ms. Aronsen. “It’s mission is to disseminate scholarship through print and digital media through academia and society at large.” The Press will publish scholarly works from the university faculty.

