Friday, April 14, 2006

Tax Abatements Galore In Jersey

From the Jersey Journal:

Wary council backs abatement for American Can condo plan

In a 7-1 vote that appeared more negotiating stance than firm commitment, Jersey City council members introduced an ordinance Wednesday night granting a 30-year tax abatement for a condo development proposed for the old American Can building on Dey Street.
...
But even the council members who voted for the abatement said they have several problems with the project, including its lack of affordable housing and open space. But they also pointed out that nothing's final until the ordinance is adopted in a second reading, which would take place in two weeks.

"I have serious reservations," City Council President Mariano Vega said before voting in the affirmative. "But in two weeks, we can discuss with the developer affordable housing, contribution to the city, and open space."

A New York City-based company named Coalco has proposed transforming the massive factory building, located in a no man's land near the Pulaski Skyway, into a condo complex with a minimum of 511 market-rate units.

James McCann, attorney for Coalco president Mikail Kernev, said yesterday he doesn't see much room to negotiate. The $100 million-odd project has already been planned and financed as market-rate housing, he said.
...
In other business, the council also introduced a 20-year tax abatement for the Shore Club North, the second phase of a 429-condo complex the LeFrak Organization is building on the Newport waterfront.

Tax abatement aim: Keep more $$ in Hoboken

City officials, claiming they're being ripped off by other municipalities not paying their fair share in county taxes, have embarked on a campaign to keep more cash in the city's coffers by increasing the number of tax abatements they give to developers.

Mayor David Roberts contends Hoboken residents pay a disproportionately high amount in county taxes compared to Jersey City - in effect giving a break to taxpayers in Jersey City and other Hudson County communities.

"Hoboken taxpayers are subsidizing the county and other communities, like Jersey City, and why should we sit around and do nothing about that?" Roberts asked.

In response, the Hoboken City Council is granting more and more abatements to property owners and developers. Instead of paying conventional taxes, these properties pay a fixed rate amount per year in payments in lieu of taxes, or PILOTs.

Under a conventional tax allocation, the city has to share revenue with the county and the school district - which, in Hoboken, amounts roughly to 75 cents on every dollar.
Under a tax abatement, the city gets to keep nearly all the PILOT cash for itself - thanks to a court decision several years ago, where Secaucus officials successfully made similar arguments, Hoboken, Jersey City and other Hudson County municipalities must give 5 percent of PILOT payments to the county.


In 1990, the city netted roughly $2 million in PILOTs. Now this year's budget includes more than $10 million in PILOTs, from more than 20 projects throughout the city - and more are to come.

By way of comparison, Jersey City collected $6.6 million in PILOTs in 1990, but today it collects more that $83 million on more than $2 billion worth of property, according to an analysis of the city's budgets.

17 Comments:

Anonymous Anonymous said...

How do you think the so called Hudson Waterfront Gold Coast (ex-industrial toxic sites) got built so fast. It was tax abatement since the early 80's. Jersey City has astronomically high tax rates. When republican mayor Schundler came came into office-25% , that is right 25% of properties were arrears in taxes. Tax lien enforcement was lax, because of Hudson County's political bossism tradion -aka - municipal socialism. There was an article on the local papers months ago, about the condo building the county prosecutor lives in coming off tax abatement, and people's taxes going from 8K to 28K a year. The only people that buy these places are non-locals so they are not aware of the history, or what will hit them when abatement were off.

4/14/2006 09:06:00 AM  
Blogger Bubble-X said...

JC taxes are darn high on new developments too. And as far as this "thing" near the skyway... you could pay me to live there. Do people know how polluted that area is?

I totally agree with the last comment- I looked at a lot of units in JC, and most realtors told me that most buyers were not from the NYC area.


-x

BubbleTrack.blogspot.com

4/14/2006 09:29:00 AM  
Anonymous Anonymous said...

OT and not cool because it's Martha Stewart, but here the kind of homes you can get for under half a million in Cary, NC (not a bad place to live).

http://money.cnn.com/2006/04/13/real_estate/live_like_martha/index.htm

Here is what you can get in Summit for under half a mil

MLS 2262756

Hmmm....

4/14/2006 09:30:00 AM  
Blogger grim said...

Wasn't Cary voted one of the best places to live in the US a few years back?

grim

4/14/2006 09:36:00 AM  
Anonymous UnRealtor said...

"Wasn't Cary voted one of the best places to live in the US a few years back?"


Yes, I think it came in 12th last year.

I'd love to go, but I'm not sure about the job market.

Maybe I'll go after saving enough to buy a house outright or close to it (a nice house was about $350K at bubble peak last summer).

4/14/2006 10:23:00 AM  
Anonymous Anonymous said...

JC taxes are truly out of control.. in fact, on a lot of the new condo developments in JC the abatements granted now actually aren't transferable to the next owner. So, a buyer might go in buying a condo thinking they have say 5 or 10 years left on the abatement, and within a quarter or two of purchasing the place -pow!- the taxes jump 30-40% and the seller is long gone.

Plus, on new developments often the taxes are listed as "TBD" and don't actually get determined by the city until over 1 yr after the CO is granted- which means these out-of-area buyers get hit with a $12k/yr tax bill on a 2 bdrm condo and wonder what hit them. The city figures it can hit up these newer "rich" NYC refugees w/ less backlash as opposed to existing residents..

Steve

4/14/2006 10:55:00 AM  
Anonymous Anonymous said...

Is there a good primer to read about all of the complicated tax schemes for development in Hudson County?

Any suggestions? Any literature?

4/14/2006 02:51:00 PM  
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