The city council this week will vote on two controversial matters – the $2.5 million purchase of Holy Family and a 25-year tax abatement for a 10-story,mixed-use building set for development at Broadway and 46th Street – the site of the former Resnick’s Hardware. City officials confirmed a special arrangement between the City and the developer that will mitigate what is most disliked about abatements: they do not contribute to the school district. In Bayonne, where the school district is in the middle of a budget crisis, the issue is pronounced.
The site at Resnick’s, which is being developed by local developer Lance Lucarelli, was approved last year and is expected to be completed sometime in 2018. The 10-story, 107-foot building will house 91 apartments, 150 parking spaces, and retail space on the ground floor.
A new standard
“Our biggest complaint is that our schools are underfunded,” said City Council President Sharon Nadrowski. “We all pay taxes and support the schools, but we also do need development.”
Tax abatements, or PILOTs (payment in lieu of taxes) are designed to incentivize development by making it more profitable for developers to build, and stay there without the burden of taxes. PILOTs forego traditional property taxes, which are distributed to the school district, the city, and the county, and instead make annual payments – 95 percent to the city and 5 percent to the county.
Nadrowski organized a special arrangement with Lucarelli for this PILOT that will allocate 5 percent of the PILOT payments to the Bayonne School District.
“It’s a welcome change,” said Nadrowski. “It has to do with the fact that Bayonne schools are in a dire situation. Just because the state is shortchanging our schools doesn’t mean the City should also.”
Nadrowski said she hopes these kinds of arrangements will become the new norm in Bayonne development policy. “We plan on this being our standard going forward,” she said, acknowledging that many new apartments planned for development are not necessarily marketing to young families, but rather young, single people who “should still support the existing schools.”
“Everyone is going to have to contribute to the school in some way,” said Nadrowski.
At last month’s council meeting, Third Ward Councilman Gary La Pelusa spoke against PILOT programs because they are not statutorily obligated to pay into the school district, which all other Bayonne residents do through property taxes.
“There’s a lot of people, especially in my district, who feel like if the developer wants to invest money, it should be at his risk, and it should not come at the expense of taxpayers,” said La Pelusa. “Most of [my constituents] have complained about their taxes going up, and they’re concerned about the county, the Board of Education, the City not having enough money, which they will have to pay later on.”
“We all pay taxes and support the schools, but we also do need development.” – Sharon Nadrowski
Holy Family saga continues
In addition to a vote on a tax abatement, the City Council will decide whether to purchase the Holy Family Academy property on Avenue A to house the Bayonne Economic Opportunity Foundation (BEOF), Bayonne’s Community Action Agency, which will be consolidated to save space and resources.
The city council agreed on November 9 to enter into negotiations with Sisters of Saint Joseph Academy to purchase the building for $2.5 million. To make the purchase, the City intends to issue a $4.5 million bond, using $2.5 million for the building.
Simultaneously, the City would sell five properties, three of which currently house the BEOF,to consolidate the organization into one building while paying off the bond. The rest of the bond is intended to pay for various telecommunications repairs throughout Bayonne.
The council voted in November to issue the bond, which does not accrue interest unless the financing is formally accepted after plans to sell those properties and buy Holy Family move further along.
Plans are to move the BEOF, and the 156 children in the Head Start Program, into the convent part of the Holy Family building while the rest of the building is rehabilitated. One of the objectives of the move would be to expand the Head Start program to accommodate children currently on a waiting list.
The City expects to sell the BEOF’s three buildings for $2 million, while an additional property on 8th Street would be sold for about $5 million, resulting in an added $200,000 to the tax rolls.
The city council meeting is on Wednesday, February 15 at 7 p.m. at City Hall.
Rory Pasquariello may be reached at firstname.lastname@example.org.