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Lakewood Township's zoning ordinances currently do not permit stand-alone banquet halls or banquet halls in schools.

Many of the existing banquet halls exist because the developers of schools did not disclose them on their Planning Board application.

The operation of banquet halls in schools has led to lawsuits against schools such as Beis Reuven Kaminetz (see here and here) and Bnos Brocha, whose simcha hall has even been ordered in court to shut down.

As the news was first broken here on FAA News, Lakewood's Township Committee recently introduced an Ordinance which formally permits catering facilities and banquet halls in schools in all zones where schools are permitted uses (which is everywhere in Lakewood besides for in or adjacent to the senior housing developments), with extremely minimal parking requirements.

The Ordinance is still under review by the Township's Planning Board and they are expected to continue their discussion on the ordinance at their next meeting this coming Tuesday night, November 29th.

By making banquet halls a permitted use in all schools, the Township will be eliminating lawsuits and Court-ordered shut downs that schools currently face due to their banquet halls.

However, this will also cause schools to lose their property tax exemption on the banquet hall portion of their property, as up until now the Township Tax Assessor fairly assumed that schools did not include a banquet hall because the Township ordinance did not permit banquet halls in schools, however, if banquet halls become permitted as planned under the proposed ordinance, the Tax Assessor will be required to ascertain whether there is a banquet hall and if yes, to assess property taxes on the portion of the building which is used for the revenue producing business.

This would also cause a property tax assessment on existing schools which have banquet halls as when the Tax Assessor's Office does an inspection of tax exempt properties, they will likewise need to ascertain whether there is a banquet hall and if yes, to assess property taxes on the portion of the building which is used for the revenue producing business.

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Simcha Steinberg said...

Seems Judge Ford agrees, as during the Court hearing when Bnos Brocha was shut down, Judge Ford stated that if a school is reimbursed in any way, either through a direct fee or by an indirect donation to the school for rental of their banquet hall then the banquet hall is indeed a "revenue producing business".

Revenue producing businesses are indeed not exempt from property taxes.

Let the buyer beware! By supporting this ordinance the Township Committee will be forcing schools to pay property taxes on the portion of their building which is used for a revenue producing business.

Anonymous said...

How is this (legally) different then a canteen in a school, or a cafeteria that sells food or, for that matter, from the business office (tuition collecting/fundraising) that schools have? If a school offers tours of part of their grounds or sells tickets to their (in-house) productions or fairs do they then need to pay property taxes on part of their property? If the revenue is simply to support the non-profit school, why should it change anything?

Shimshy Stein said...

There is a major difference between an event held by the school and when the school rents out their building to a third party.

In essence, as Judge Ford explained, "you can't hide a revenue producing business inside s school".

Anonymous said...

I’m certain the privately controlled schools would have no problem paying their fair share for the revenue generating portion of their buildings. After all, their stated interest is to help the community. And what better way to assist than to help offset some of our tax burden.