The Kennedy Dancers are a non-profit dance organization who have been fighting a property tax bill from Jersey City. The company is continuing to pursue its case in court, hoping to preserve its non-profit status and dismiss a demand from the city’s tax assessor.
The Dancers, who have been a non-profit since 1979, are in a dispute over two memorandums of judgment for their two properties at 79 Central Ave. and 120 Beacon Ave. valuing the properties at about $1,080,300. They sued the city in the New Jersey Tax Court nearly two years ago.
The company director, Diane Dragone, says the city’s tax assessor, Eduardo Toloza, has targeted them and won’t explain the reason. Toloza has also been accused by other non-profits in the city for targeting them despite their tax-exempt status.
Attorneys for both the Dancers and the city have submitted motions for summary judgment before the court. The company has argued there is no reason why the company should not qualify for tax-exempt status, while the assessor argued that there are a number of reasons it should not.
John Fazzio of Fazzio Law Offices, who represents the Kennedy Dancers, wrote in his motion that the company had maintained and operated the properties “solely to further their stated mission.”
He also warned that the financial implication of the case will be “far-reaching, as many nonprofit institutions will fail in their social welfare missions and be unable to continue operations without the benefit of the tax exempt status.”
He argues that there is no “genuine issue of material facts with respect” to whether the properties are tax exempt, saying that the Dancers qualify for being tax-exempt as being “organized exclusively for the moral and mental improvement of men, women and children.”
“There is no legislative definition of moral and mental improvement, but New Jersey precedent has generally accepted that the ‘dissemination of… the dramatic arts and the presentation of musical recitations advance the intellectual and social bases of man in general’,” writes Fazzio.
Fazzio continues that the court has “consistently” upheld the tax-exempt status of properties where a non-profit provides access to performance arts, and that the Dancers’ attendance costs and performance prices indicate that they are not intended to make profit.
He lastly adds that the company reinvests all of its surplus and net profits into their non-profit purpose, that they rely on government support and grants for such, and that their properties are “solely and exclusively” used for non-profit operations.
William Maslo, the attorney representing Jersey City, argued that the Dancers have “entirely failed to establish by competent proof” that they are entitled to a tax exemption.
He argued that the case revolving around the Dancers is similar to a case between the township of Cranbury and the Princeton Ballet Society, where he said that the tax court ruled that the Ballet Society were not eligible for a tax exemption because it was found to be used “almost exclusively as a commercially competitive dance studio.”
Maslo argues that the Dancers’ organizational documents raise “serious doubt” on its public purpose, such as including no provision requiring all funds to be used “for the benefit of society as a whole and that no part of the net earnings of the corporation shall inure to the benefit of any private individual.”
He also argues that based on their analysis, the Dancers charge market rate tuition for its dance instruction, they don’t hold any performances at their property, and they failed to prove that their property is used for not-for-profit.
Lastly, he argues that the Dancers’ claim for a derivative caretaker’s exemption fails “as a matter of law” and undisputed fact, reiterating his argument that the company’s operations are not done on the property, and that there is no need for a caretaker to reside in the studio.
In another brief submitted by Fazzio, he says Jersey City’s arguments lack legal merit “and are unpersuasive when considering the undisputed facts of record.”
Fazzio disputes that Jersey City attempted to “wrongfully convince that court” that the Kennedy Dancers does not qualify by “misrepresenting and manipulating” the facts of the case, and that the company is federally exempt and has operated for 45 years as a non-profit serving the community at large.
He then touches upon the Princeton Ballet Case, saying that the factors in that case such as “commercially competitive market-rate classes,” lack of public art performances, and lack of free programs, are different from the Kennedy case.
Fazzio also countered the city’s notion that the company’s property isn’t used for the general public, saying they use their property to teach classes and hold on-site performances, and that they offer other groups such as seniors, low-income and at-risk youth dance training free of charge.
He said that the company serves different interests than commercial studios, as about 59 percent of their classes are free, and they also offer professional dance instruction and education, recognized by the New Jersey Council of the Arts, at “far below-market prices” to make the arts available to everyone.
“Jersey City is a cultural hub and the arts are alive and well in [the city],” said Fazzio in an interview. “Hopefully the city will see clear to let this institution of the Kennedy Dancers, which has been around for 40 years, continue to do their good work in the community without being targeted for property taxes that they should not have to pay under the law.”
A Jersey City spokesperson did not respond for comment on the ongoing litigation at the time of publication.
A hearing for the case is scheduled for Aug. 30 before Judge Mary Siobhan Brennan.