The Jersey City Council will consider two ordinances introducing two 30-year tax abatements for four Newport area properties during the Oct. 10 council meeting after the ordinances were pulled during the Sept. 26 meeting of the council.
According to council documents the property owners, NC Housing Associates urban renewal companies, seek the abatements in order to rehabilitate the mixed-income apartment buildings first constructed in 1991.
The council pulled the ordinances after attorney Jim McCann, who represents the companies seeking tax abatements, said his client would improve some of the terms of the agreement to “make it more receptive” to the council’s and administration’s concerns.
River Drive South
The first introductory ordinance would agree to exempt two properties on River Drive from filing municipal taxes.
The properties, at 35 River Drive South and 55 River Drive South, currently contain 497 market-rate units, 111 affordable housing units, 29,184 square feet of retail space, and 380 parking spaces.
The buildings were originally granted a 30-year tax abatement under state law because they were financed by the New Jersey Housing and Mortgage Finance Agency.
In November the mortgage debt will be paid off and the existing tax abatement will expire as will the affordable housing deed restrictions.
According to the ordinance, if granted another 30 year tax exemption the owners will continue to have the 111 affordable housing units for 15 years and add 10 more for a total of 120 affordable housing units.
Under the proposal for the River Drive South properties, NC Housing Associates would pay the city an annual service charge, an estimated $1.77 million in lieu of taxes, $35,484 as an administrative fee annually, provide local residents with employment, and pay an annual service charge estimated to be $88,711 to the county.
According to the ordinance the buildings’ rehabilitation could create approximately 970 jobs during construction.
The buildings’ rehabilitation includes the replacement of all windows, replacement of façade panels, renovation of the lobbies, replacement of the roofs, installation of new hot water heaters, replacement boilers, installation of solar panels and more.
The company also plans to rehabilitate two of their other properties on Newport Parkway at and 30 Newport Parkway and 40 Newport Parkway, which also received 30-year tax abatements, previously, were constructed in 1991, and financed through NJHFMA.
The two properties have 731 market rate units and 160 affordable housing units which will expire in November once the mortgage debt is paid off.
It also has 13,685 square feet of commercial space and 493 parking spaces.
According to the ordinance, should the city grant them a 30-year tax exemption they will continue to operate the 160 affordable housing units for 15 years and add 18 more for a total of 178 units.
They would also pay the city an annual service charge estimated at $2.57 million, an annual administrative fee of $51,446, and pay the county an annual service charge estimated at $128,615.
It also said the construction would create another 970 jobs.
The properties would also undergo the same renovations as the River Drive South properties.
Lack of support
Earlier this year tax abatements became the topic of debate during the city’s budgeting process, because tax abatements often do not include payments to the city’s school district and are not a sustainable source of revenue for the city.
According to a Sept. 16 letter from Mayor Steven Fulop to Council President Rolando Lavarro, Fulop does not recommend either 30-year tax abatement proposal as they do not provide low-income housing, only moderate-income housing.
“The need for affordable housing in Jersey City is a growing concern but the need for low-income housing in downtown is particulate acute and the entity’s application does not address it,” he wrote. “Moreover, the proposed affordability restrictions are set to expire after only 15 years; only half the duration of the tax exemption.”
He added the service charge was also too low.