PRINCETON: Other university building valuations questioned

By Victoria Hurley-Schubert, Staff Writer
   With the first lawsuit challenging the tax-exempt status of many Princeton University buildings filed, a group of neighbors are looking to further explore valuations of other university properties.
   These issues are all a result of the revaluation that took place in the Princetons last year.
   Many of the university’s properties are “woefully undervalued,” said Bruce Afran, a Princeton Township attorney representing the group. He pointed to Princeton Stadium, which cost $45 million to build, but is listed as valued at $26 million.
   ”It’s very rare that someone invests $45 million in something only to have it worth half that the next day,” he said. “Much of what they are paying tax on is very much undervalued.
   Another example is the Stanworth apartments (graduate and junior faculty housing in Princeton Borough), they list the site value as $60,000 per unit, yet right next door in the borough the site values are $270,000 for houses the same size. It’s the same land size, yet the university’s assessment is one-fifth that of the neighbors next door.”
   The assessment for Stanworth on Bayard Lane is $26,154,500, according to the assessor’s office. The site value of a two-bedroom unit is $60,000 and a one-bedroom is $50,000.
   Stanworth is being treated as one lot and one unit, said Neal Snyder, tax assessor.
   ”Residential units are based on market value, whereas apartment complexes of five or more units are valued on an income approach and you cannot separate land from improvements when you go to tax court.”
   Stanworth is broken into sub-lots for sewer billing purposes, but when it comes to assessment it is treated as one lot because the university cannot go and sell one random building.
   ”The little house down the street can sell as one unit, whereas with Stanworth, the whole complex has to be sold,” he said.
   Site value is part of a total assessment and represents the right to live on a piece of land and use it for residential use. For a residential home, sales of similar homes are looked at, and then the state appraisal manual gives the cost to build the home on the lot, then the cost of depreciation is subtracted, leaving the residual land value. Its value goes with zoning, lot size and other factors, including sales. A parcel of land that can not be developed would have no site value.
   The university also had representation on the revaluation commission when the values were being calculated.
   ”Most taxpayers don’t have their own private representative on the committee that is managing the reassessments,” said Mr. Afran. “There are significant structural problems with that assessments. The Stanworth buildings are an example; it’s impossible that a lot can be worth $60,000 and then 30 feet away on the next street a lot is worth $270,000. In fact, Stanworth should be worth more because it is right on a main road rather than deeper into a neighborhood.”
   The 150 units at Stanworth represent a huge amount of lost revenue for the borough if the site values are skewed, said Mr. Afran.
   The Princeton Fair Tax group, a band of citizens challenging the revaluation, is also looking into this issue and is in the process of beginning a lawsuit challenging the revaluation put into place last year, alleging the process was systematically flawed.
   This group of Linden Lane citizens is not part of Princeton Fair Tax, but agree the assessment was unrealistic and “overly stated for ordinary homes,” said Mr. Afran. He said there have been more than 2,000 adjustments so far, which is a sign that the assessment was flawed.
   ”That will be an aspect later on, it’s not immediately what we are doing today,” said Mr. Afran, who said he has spoken in detail with Bill Potter, Princeton Fair Tax attorney.