Township of Holmdel v. New Jersey Highway Authority

In this appeal, we must determine whether portions of the PNC Bank Arts Center (Arts Center), which is owned by the New Jersey Turnpike Authority (Authority), are exempt from local property taxation. The municipal tax assessor determined that the Arts Center’s amphitheater and reception center were no longer entitled to tax immunity because the Authority had leased those facilities to two private, for-profit entities. Both the Tax Court and the Appellate Division held that those facilities were subject to taxation.

Because the amphitheater’s current operation furthers the Arts Center’s…