University's Lawsuit Settlement Is Non-Binding For Town: Princeton Officials

Princeton, NJ -- The settlement agreement between Princeton University and a group of residents who were suing over the university’s tax-exempt status is in no-way binding for the municipality, town officials announced last week.

“The Municipality of Princeton was not given the opportunity to be a party to the negotiations or settlement,” Municipal Administrator Marc D. Dashield reiterated on Friday. “Consequently, the terms of their agreement are unenforceable against the municipality.”

The statement came one day after town officials met with a lawyer in a closed session meeting to discuss the settlement, Planet Princeton reports.

The settlement calls for $3.48 million contributions from the university to the town in both 2021 and 2022, the two years after the current seven-year agreement between the municipality and the school expires.

The settlement concluded a lawsuit in which Kenneth Fields, Mary Ellen Merino, Joseph King and Kathryn King challenged the tax-exempt status of some of the University’s buildings that are used for commercial use, such as eateries.

The university was also being accused of acting like a for-profit institution, including holding a licensing agreement for a chemotherapy drug.

The municipality remained neutral throughout the duration of the case, and wasn’t part of the negotiations that led to the resolution.

Princeton University Vice President Robert Durkee told Planet Princeton the university was “attentive” to the agreement it had with the town during the negotiations, but agreed that nothing in the settlement is binding for the municipality.

In the same report, a resident said the group wanted to make sure the university continued to make payments in lieu of taxes for the full agreement. They said the university could’ve previously stopped making payments without penalty, and that the town can always negotiate for higher payments.

As part of the agreement, the university also agreed to contribute $2 million next year and $1.6 million for each of the next five years to a fund that will help lower income residents pay their property tax bills.

It will also make three contributions to the Witherspoon Jackson Development Corporation each year, for the next three years, according to the report.

There is a provision that calls for 50 percent of the benefits to be pulled back if there is another challenge to the university’s tax exempt status.

After six years, if the sides can’t reach an agreement to extend or replace the tax relief program, there could be a lawsuit from the university.

Patch file photo