The Bayonne City Council has again postponed a payments-in-lieu-of-taxes (PILOT) agreement with the redeveloper of Woodmont Bay Club for the next phase of construction.
Under a PILOT agreement, municipalities grant developers exemptions from traditional property taxes for a set period of time to encourage them to make improvements to a property or locate a project in a distressed or “blighted” area. Instead of property taxes, developers make an annual payment to the municipality.
The payment is typically much less than traditional taxes, and is structured so that the municipality receives more of a benefit than it would from usual property taxes. These exemptions save a developer in real estate taxes, but they provide an increase in the fair market value of the property as a result of higher net operating income.
The council has frequently used these agreements to spur and support redevelopment throughout Bayonne.
Financial review ongoing
The agreement would be between the city and Woodmont Bayonne Phase Two Urban Renewal, LLC, an affiliate of Woodmont Properties. The agreement will be for property on West 52nd Street, however, it is still being looked over by the city.
Each PILOT, as well as other financial agreements between the city and other entities such as developers, is reviewed by financial advisors at NW Financial. The policy was announced by the council in January of this year.
At the meeting, Law Director Jay Coffey said the agreement is still under financial review. Coffey told the Bayonne Community News, that the length of the agreement would be for 25 years.
The deal would support the upcoming project on West 52nd Street, which includes a residential development consisting of 85 units, 151 parking spaces. This is part of Phase Two of the plans for the Woodmont redevelopment.
Phase Two coming soon
Previously, the first phase of the project was completed in 2019 with the opening of the five-story Woodmont Bay Club at 190 West 54th Street. The 220-unit project finished construction at the site of the former Hi-Hat catering hall in 18 months, and includes amenities such as a fitness club, pool and a “sky lounge.”
The council previously awarded a 25-year PILOT to the redevelopers for Phase One. Under that agreement, Woodmont pays 10 percent of its gross annual revenue to the city for the first five years; 12 percent from years six through 12; 13 percent from years 13 through 19; and 14 percent for the last six years.
Now, the plans for Phase Two and the financial agreements to support it are on the way, meaning more upscale residential units are in the works. This final phase of the project has already been approved by the Bayonne Planning Board.
Public hearing in December
A public hearing on the ordinance will be held at the next meeting of the Bayonne City Council at 7 p.m. on Dec. 15 at the council chambers at City Hall at 630 Avenue C. The public can attend in person or remotely. For more information, go to bayonnenj.org and click on the event on the calendar webpage.
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