A legal battle over the Kennedy Dancers’ non-profit status and potential property tax payments will continue into January, after a state judge denied both sides’ cross motions for summary judgment.

The Kennedy Dancers’, a non-profit dance organization based in Jersey City since 1979, have been seeking to dismiss two memorandums of judgment for their two properties that could force them to pay taxes, and are fighting their case against the city in the New Jersey Tax Court.

Attorneys for both the organization and the city appeared before Tax Court Judge Mary Siobhan Brennan at the Essex County Dr. Martin Luther King Jr. Justice Building in Newark on Aug. 30, making oral arguments on their motions for whether or not the taxes should’ve been issued.

John Fazzio of Fazzio Law Offices represented the Dancers in the courtroom; he argued that the organization has demonstrated that they exist and operate “for the community benefit” and that’s how they use their two properties that are at issue.

“That’s the reason why they offer free classes for those who meet the criteria,” he said. “Established by [U.S. Department of Housing and Urban Development] as being low-income and lacking the ability to pay for dance training that they would get elsewhere.”

He also continued that they also provide free classes for seniors and those who have disabilities, and give back to the community and the city by allowing participation with prices that others wouldn’t be able to pay elsewhere.

He disputed a comparison to this case regarding the Princeton Ballet Society, arguing that the Princeton company had charged above-market rates, did not give scholarships, and were determined to be operating as a commercial dance studio, compared to the Dancers providing children and senior classes, as well as scholarships.

“They do not select for the professional dance troupe from the students that are coming there and getting experience with dance,” said Fazzio, noting that 60 percent of their students are attending classes free of charge.

Judge Brennan questioned Fazzio on whether there was any aspect of the Kennedy Dancers conducting for-profit activity. “If I have a theater, and I allow an artist to come in, show their work, and sell their work, that artist is making a profit,” she said. “They’re selling their art in my facility.”

Fazzio replied that they aren’t doing anything for-profit, saying that Director Diane Dragone makes about $20,000 a year, that the instructors are paid below the market rate, and that there’s no aspect that would count as such.

Brennan also said that she was surprised by what she called a lack of highlighting about the COVID-19 pandemic and the lockdowns that took place. “In order for me to actually be able to look at what you’re arguing, I need to know what was going on there for a period of time before, don’t I?” she asked.

Fazzio, who earlier said that Dancers were closed “the whole time,” said that they don’t have that because they didn’t know why the city was denying them tax-exemption until the city’s motion revealing that it was because of their situation regarding their caretaker.

Judge Brennan later said that she had “real questions” that needed to be answered to be able to “analyze, apply the law, and understand exactly what was going on.” “If I’ve got to write a decision in which the pandemic has a role in it, I need to know what that role is,” she said.

William Maslo, the Assistant Corporation Counsel for Jersey City, argued before the judge that the city’s position is that the Kennedy Dancers don’t meet the three-part “mental and moral improvement” test.

“They haven’t produced any credible, admissible evidence during the years at issue that would satisfy all three prongs of that test,” he said. “The burden is on the Kennedy Dancers to establish that three-part test. As far as we’re concerned, they’ve provided nothing that sways Jersey City’s opinion.”

Maslo pointed issue to the second part of that test, saying that the Dancers need to show that they’re using their property for charitable purpose, and that it’s not on the city to prove otherwise. He disputed based on the city’s review that their tuition rates are less than the market rates and that they hold performances at their locations.

“A large degree of the Dancers’ allegations are supported just with self-serving statements that are made by its’ executive director,” he said. “There’s real lacking of an objective credible proof other than a statement saying ‘oh yea, we reinvest all of our profits; oh yea, we charge less than that; or we put performances on’.”

He also touched on the situation regarding the caretaker on-site, arguing that they can’t have a caretaker’s exemption if they don’t have an exempt property in the first place, and that there’s no need to have an on-site caretaker and that they can live off-site instead.

Judge Brennan then questioned Maslo, asking if the lease agreement with the caretaker was made during a time of the city giving tax-exemption. Maslo replied that it was made sometime in 2018, but they were not aware of someone residing in the property until some point in 2019.

“Between the residential lease that we became aware of, coupled with the rates that were then discovered to have been charged, Jersey City then filed a tax appeal at the county board in 2020,” said Maslo.

Brennan then added that a certification said that the caretaker left in December 2020, but Maslo replied that they didn’t know whether the caretaker had vacated at the time. “Now we have a disputed fact,” said Brennan.

Brennan also said that she didn’t see where and who’s making a profit, referring her previous allegory on the artist selling paintings, and that she was struggling with the facts in the case to make a decision on summary judgment. She also asked Maslo why the company was getting city and state funding to do charitable work.

Fazzio then said that the Dancers had sent nearly 5,000 pages of info to the tax assessor, including applications to the state Council for the Arts and Jersey City, and alleged that about 98 percent of them was never look at.

“There’s this huge gap between what we’re understanding the situation to be, and what Jersey City is speculating the situation is,” he said. “They told us that the issue was about the caretaker. They never said that they had a question about how we’re using the grant funds, what classes are taught until this motion.”

“So if they’re not gonna look at it, the beauty of the court system is….I give you my word,” said Judge Brennan. “I will read every word, as long as it was provided to Jersey City. You can submit it, we’ll have a hearing.”

With that in mind, Judge Brennan decided to deny both cross motions for summary judgment without prejudice (meaning they can be refiled again), and scheduled another hearing for Jan. 25, 2023, with two other days scheduled for the 26th and the 27th for additional hearings.

For updates on this and other stories, check hudsonreporter.com and follow us on Twitter @hudson_reporter. Mark Koosau can be reached at [email protected] or his Twitter @snivyTsutarja.