Essex County owes nearly $145,000 in real estate taxes and interest on the Kip’s Castle property, as indicated in the public notices section of The Montclair Times published on Sept. 25.

The county acquired the mansion on March 1, 2007, and Montclair officials maintain the county is legally required to pay property taxes due through Jan. 1, 2008, said Township Attorney Alan Trembulak.

"We claim that, under New Jersey law, the county is obligated to pay taxes for the remainder of 2007. The county contends that the property became tax exempt the day they acquired it," Trembulak said.

County officials approved the $5.6 million purchase in January 2007. It was their hope the place would become part of the communal fabric in Essex County as a recreational facility for public meetings, offices and events.

As the mansion sits on the border of Verona and Montclair, Verona also is entangled in a similar web. Verona is owed about $40,000 in real estate taxes and interest, according to Verona Township Manager Joseph Martin.

Martin, who said Verona "would agree up front to waive any penalties and interest," called the dispute an "ironic situation."

"The townships are not being paid the taxes, and we’re still having to remit to the county that portion to the county what is due," Martin said. "The town not only would not be collecting taxes but also be paying the county their share of the taxes.

"I’m confident over the next few weeks the issue will be resolved amicably," Martin said.

Anthony Puglisi, spokesman for Essex County Executive Joseph N. DiVincenzo Jr., told The Times, "It is still being discussed internally here. We’re in discussion with the township."

Essex County and Montclair officials have been discussing a resolution regarding the taxes from March 1, 2007, Trembulak said.

"The matter is the subject of ongoing discussions," Trembulak said. "We are hopeful of reaching a settlement which would ultimately have to be reviewed and approved by the council."

Built on the summit of First Mountain, with an unimpeded view of much of New Jersey, the Manhattan skyline and the Hudson River extending northward, the 9,000-square-foot rock and sandstone mansion has a colorful history. It was built in 1902 by textile manufacturer Frederick Kip, based on a medieval Norman castle. The structure was acquired in the 1980s by Indian guru Bhagwan Shree Rajneesh.

The Schwartz, Tobia & Stanziale law firm had been located in the castle for nearly 23 years.

When DiVincenzo announced on March 1, 2007 that the county would use the mansion as a recreational facility, it became the latest addition to the county parks system. As early as the date of the acquisition, nearly 50 conservancies, historical societies and community organizations that partner with the county were welcome to have access to Kip’s Castle for meetings, programs and catered events.

The county received a $2.8million grant from the New Jersey Green Acres local assistance program and an additional $2.8 million from the County Recreation and Open Space Trust Fund Advisory Board to purchase the property.

On Jan. 24, 2007 county freeholders approved the $5.6 million purchase of the 30-room estate and adjoining stone carriage house.

DiVincenzo has told The Times that he intends to have the site listed on the New Jersey Historic Register. The site was once listed as an endangered New Jersey historic site, he said.

Contact Tanya Drobness at drobness@montclairtimes.com.