Another tax abatement will be terminated now that the Jersey City Council unanimously adopted an ordinance to that effect on Dec. 4.
The tax abatement at 305 West Side Ave. in Jersey City was terminated after the developer, 305 West Side Urban Renewal LLC, failed to comply with local laws, according to the ordinance.
“We’re going through each one,” said Mayor Steven Fulop. “Many date back years. Bottom line: why should we fulfill a commitment to the developer in a tax abatement if they aren’t doing what they committed to do?”
Failure to pay
In 2016, a development at 305 West Side Ave. was given a 20-year tax exemption, with a service charge of 12 percent of its annual gross revenue each year, set to expire in January of 2036.
The project broke ground in August 2017. Shortly thereafter, construction came to a halt on what was supposed to be a five-story, mixed-use rental residential building that included residential units, nearly 3,700 square feet of ground-floor retail/commercial space, and 19 parking spaces.
The goal of the project was to further the objective of the West Side Ave Redevelopment Plan.
“After noticing the project went stagnant for several months midway through construction, I reached out to the developer and tried to work with them on the reasons for the delay,” said Councilwoman Mira Prinz-Arey who represents the ward where the project is located. “After multiple attempts to work with the developer, they’ve not made good on their contractual obligations and have been completely unresponsive.”
Cracking down on developers
According to the city, the financial agreement the developer entered into with the city stipulates that the developer was supposed to pay the final 1/3 of its Affordable Housing Trust Fund contribution, equal to $23,850, no later than 24 months after the date of the Financial Agreement was signed.
This contribution was due no later than Jan. 27, 2018 and has not been paid, thus violating the agreement.
On July 1, 2019, the city issued a Notice of Default to the developer, stating it had 60 days to pay its Affordable Housing Trust Fund balance. On Sept. 27, 2019, the city issued a termination notice to the developer, stating that the city would move to terminate the tax abatement in 30 days, but the developer never responded.
“This is the third tax abatement repeal we’ve acted on so far this year, citing developers who aren’t living up to their end of the deal of their contract,” Mayor Fulop said. “We will continue efforts to crack down on delinquent developers and hold them accountable for their obligations to the neighborhoods they’re affecting.”
According to the city, under the Fulop Administration, tax abatements are being phased out. It has been three years since a residential tax abatement has been granted.
The mayor revised the city’s Payment in Lieu of Taxes (PILOT) program at the start of his administration to ensure greater transparency, more widespread development, and local employment opportunities.
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