The city of Hoboken may be working on a Payment in Lieu of Taxes agreement with Academy Bus in order to expand the city’s Southwest Park using a portion of the company’s property, according to Councilman Ruben Ramos.
A PILOT or tax abatement is an agreement between a developer and a municipality allowing the developer to pay a percentage of a development’s revenues, or a percentage of the project’s construction costs, for a predetermined period of time rather than pay traditional taxes on the buildings constructed on the site.
In 2017 the City Council authorized the use of the eminent domain, requested by former Mayor Dawn Zimmer, to acquire Block 10 of Academy Bus’s land to expand the Southwest Park form one acre to two.
The city has said the additional acre of land, which is currently a parking lot, will provide needed open space, important quality of life upgrades for the community, and will also include infrastructure to further manage flooding in the neighborhood.
Since then, the city has said it has attempted good faith negotiations with the company to acquire the property.
In January 2019, the company proposed building the park extension for free in exchange for additional office space for Academy Bus, a new Middle School, and 439 residential units.
At the time, Mayor Ravi Bhalla called the plan a “nonstarter,” as the area is already congested citing the approved Southwest Redevelopment Plan calls for only 192 units.
Last summer, Bhalla announced the city would again consider eminent domain and in September Hoboken filed an eminent domain action to acquire the additional acre of land just west of the park and bordered by New York Avenue and Harrison Street.
The city deposited $5.3 million, its estimated value of the property, with the court despite that Academy Bus’s appraisal estimated the property value several million dollars higher at $21.8 million.
Then in November, a judge ordered the two parties back to the negotiating table citing issues with the city’s rezoning of the area and the city’s “faulty” appraisal.
Since heading back to the negotiating table, the city has had another outside appraisal of the property done which now sets the estimated value of the property at nearly $8.5 million.
On March 4, the City Council unanimously adopted an ordinance on final reading that will allow the administration to offer this appraised value to Academy Bus to acquire the land.
During the council meeting, Councilman Ruben Ramos said this will be used during negotiations with Academy but the hope is that Academy and the city will partner to create the park as part of a PILOT agreement “similar to what happened on Seventh and Jackson.”
At Seventh and Jackson streets, the city was able to receive a park and gymnasium from the developers of the 700 Jackson Street Development Project near the Monroe Center as part of a 30-year PILOT agreement between the city and the developers.
Resident Mary Ondrejka asked if this means the city would have to continue pursuing eminent domain and return to court, to which Ramos replied that the Academy is “fully aware” of the new appraisal, the possibility of a PILOT agreement, and that the city was attempting to avoid further litigation and come to an agreement as to what the actual price of the property is.
He said the city and Academy will enter into 90 days of mediation.
“That’s the strategy going forward,” said Ramos. “We should’ve used that strategy over the years but we are trying correct that now and enter negotiations about how re-purpose property with them as partners”
He said that if it doesn’t work, the city can go back to court but “we want to avoid that happening.”