Stockton, Galloway to enter into compensation deal | Local News

GALLOWAY — Stockton University has agreed to make direct payments and in-kind contributions to Galloway Township.

The deal follows negotiations over what contributions Stockton would make to the local government.

Atlantic City entered into a similar deal with the school when a campus opened in the resort.

The Township Council passed a resolution authorizing the agreement with Stockton on Tuesday. Mayor Anthony Coppola said he was glad that the university would put its resources at work to support the neighboring community.

Stockton’s main campus is located in Galloway.

“Stockton University has been a member of this community for a long time, they’ve never really paid taxes in our community, they’ve never had to,” Coppola said. “Recently, they’ve stepped up and wanted to contribute.”

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A Stockton spokesperson confirmed the agreement and said it was a byproduct of a longstanding, mutually beneficial relationship.

“The agreement with Galloway will acknowledge the mutual benefits that result from the university’s location within the township and various partnership programs and initiatives we have cooperated on over the years,” university spokesperson Stacey Clapp said in an email Friday.

Many colleges and universities like Stockton, as educational nonprofits, have tax-exempt status and are not obligated to pay income taxes to the federal government or property taxes to local governments.

Stockton, as a public university, is also generally exempt from paying state sales tax.

While most colleges and universities are not bound by local property taxes, some local governments and residents assert the institutions should directly contribute to the communities of which they are a part.

Coppola, for one, has indicated that Stockton should compensate the township for the municipal services it provides students, staff and faculty. On Tuesday, he cited the emergency services that Galloway provides, as well as the township roads and facilities of which members of the Stockton community make use. The mayor added that other non-profit institutions give payments and other contributions to the municipalities in which their located.

“I couldn’t be happier that we came to (the agreement) without having to have strenuous negotiations,” Coppola said of the deal between Galloway and Stockton. “I really think it’s remarkable that we came to that common ground without having it to be contentious. It speaks volumes of Stockton and their commitment to our community.”

The deal was struck as the township was mulling other ways to collect revenue from the school. Coppola said that township officials had considered taxing Stockton on its properties that are used for commercial purposes, such as campus coffee shops.

State law dictates that non-profit, property-tax exemptions can be prorated if a portion of the property is being used for non-exempt purposes, according to the NJ Center for Nonprofits. Whether amenities such as coffee shops on campus amount to a non-exempt use, Coppola said, is open to interpretation.

In any case, the final agreement has the university contributing more to Galloway than it would have if it were taxed.

“Especially when you add the in-kind contributions, it well exceeded the number that we were looking for,” Coppola said of Stockton’s commitments to the township.

The township and private business have harbored an interest in having Stockton pay taxes for at least the last decade. Anxiety over revenues were precipitated in 2011 when then Richard Stockton College purchased the Seaview hotel – a venue that has hosted celebrities like Mick Jagger and Grace Kelly, as well as multiple presidents – for $20 million. The late state Sen. Jim Whelan, D-Atlantic, expressed support for the deal, characterizing the purchase as something that could be used by Stockton to further develop its hospitality curriculum. Galloway Township officials, however, expressed alarm. The hotel’s purchase by a tax-exempt nonprofit would be subtracted from the number of taxable properties in the township and ultimately cut into its revenues. Coppola indicated on Tuesday that the other hospitality businesses in the area feel as if they were being put at a competitive disadvantage due to Stockton’s tax-exempt status. The township ultimately had Stockton make payments on the Seaview, as it was doing on six houses that it already owned in Galloway.

Stockton sold the Seaview in 2018 for around $21.1 million. It had invested $22 million into the Seaview in capital improvements over those seven years and collected $28 million in revenue via tuition, fees and room-and-board costs paid by students who lived there, according to a contemporary university news release.

The university’s beachfront housing at its Atlantic City campus, which opened in 2018, had created new hospitality-curriculum opportunities, rendering Stockton’s continued ownership of the Seaview redundant.

Stockton has said that community involvement is at the center of its expansion into Atlantic City. It currently runs a number of community benefits, including food drives, homework help sessions, and campus kitchens and community gardens.

Stockton has an operating budget of just under $259 million for fiscal year 2023, which is around $5 million less than its operating budget in 2022. The New Jersey Monitor reported in April that university officials were warning state lawmakers that cuts in state aid could require them to raise tuition, working against the Murphey administration’s professed goal of making higher education more accessible.

Coppola expressed hope that the payments made by Stockton could go towards public safety. He said that the university had volunteered the use of its property for township events, such as National Night Out, as well as local carnivals and festivals.

“If we need a bigger facility than we can offer here in Galloway, they’ve offered to step up as part of that contribution,” Coppola said.

A Stockton spokesperson also said Friday that the payments and in-kind contributions would go towards public safety and emergency management services in Galloway.

Township Manager Chris Johansen said that Stockton also discussed providing services to the township’s seniors, such as the enrolling them in computer classes or giving them access to the Stockton Performing Arts Center.

“They’ve been a good neighbor and they continue to be,” Coppola said of Stockton. “We don’t always see eye-to-eye, and sometimes we butt heads on things, but this is one of those things that I thought went smoother than I expected it to go.”

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