JJ: See below. I thought LB was tax abated. Did this change?
City makes tax break for Pier Village official
Tax abatements were offered as enticement
to attract developers
BY CHRISTINE VARNO
Staff Writer
LONG BRANCH An agreement for a tax abatement, made four years ago,
between the City Council and the Pier Village developers was
unanimously approved as an ordinance on April 13.
The ordinance authorizes the financial agreement for a tax exemption
and a payment in lieu of taxes with the developers of the Pier
Village Redevelopment Project.
It is an estimated $100 million project of improvements on property
roughly worth $20 million, according to Howard H. Woolley Jr., city
business administrator.
Woolley said the abatement is on the improvements of the property
only, and the developers will be and are paying on the value of
the land as it exists now. He said there is no way of telling at
this time the exact amount of the total cost of the abatement.
"Tax abatements are given so developers will come into the city and
build," City Attorney Jim Aaron said. "You give tax abatements to
look into the future to entice people to build million-dollar
projects on land that was vacant in an area that has been disgusting
for years and years."
The project includes 420 residential units to be constructed on
approximately 104,000 square feet of retail space between Morris
Avenue and Laird Street.
The agreement for the abatement was made in 2000 with Applied
Development Company of Hoboken, the first developers to show any
interest in developing land in the city, according to Mayor Adam
Schneider.
"We said the first entity that came to the table would get the best
deal," Schneider said. "We offered the abatement to entice
developers to come into the city. The commitment was made four years
ago. Nobody knew four years ago that [the city's] redevelopment
would be as successful as it is today."
According to the ordinance, the tax exemption will be structured as
follows:
"In the first full tax year after completion of the Project, no pay
ment in lieu of taxes shall be required; in the second tax year, 20
percent of taxes otherwise due shall be paid by the Redeveloper; in
the third tax year, 40 percent of taxes otherwise due shall be paid
by the Redeveloper; in the fourth tax year, 60 percent of taxes
otherwise due shall be paid by the Redeveloper; in the fifth tax
year, 80 percent of taxes otherwise due shall be paid by the
redeveloper.
"After the fifth tax year, 100 percent of taxes otherwise due shall
be paid by the Redeveloper. In no event shall the payment by the Re
developer be less than the amount of taxes currently generated by
the Project properties."
According to Woolley, in the first year, the city will be abating
about $1.8 million and collecting about $400,000; in the second year
the city will be abating about $1.4 million and collecting about
$800,000; in the third year the city will be abating about $800,000
and collecting about $1.4 million; in the fourth year the city will
be abating about $400,000 and collecting about $1.8 million; and in
the fifth year the city will abate no money and collect about $2
million in full taxes.
Woolley said the city also agreed on a tax abatement with the devel
opers of the Hilton Hotel, now the Ocean Place Resort and Spa on
Ocean Boulevard.
"There was nothing down here [on the oceanfront]," Woolley
said. "All we had was a burned out water-slide and a lot of vacant
land. I looked all over the state for developers, and no one was
interested.
"In order to attract developers to invest millions of dollars in the
city, the council had to offer an abatement," he said. "We said we
would give the best deal to the first major developer to show
interest in developing oceanfront property. Applied was the first
developer we signed.
"Down the road, we are going to have money coming in from this
project," Woolley said.
"As a taxpayer and a homeowner, I object to this," Denise Hoagland
of Marine Terrace said at the council meeting.
Hoagland's home is in an area the city has designated for
redevelopment, and she faces the possibility of the city using its
powers of eminent domain to take her property.
"If you are taking my home [slated for eminent domain for oceanfront
development] and I am paying taxes, you do not have the right to
take my home."
Hoagland was not the only local resident who objected to the abate
ment.
MTOTSA (Marine and Ocean Terraces and Seaview Avenue), an alliance
formed to fight eminent domain in the city, members Hoagland, Bill
Nordahl, Tom Bellucci and Lori Vendetti all spoke up, telling the
council that they do not agree with offering a tax relief to
developers who are developing on oceanfront land.
"The tax abatement will give a greater benefit in the next year, and
the next year, and the next year," Aaron said.
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