The Bayonne City Council has introduced a number of ordinances which would grant payments-in-lieu-of-taxes (PILOT) agreements to redevelopers for new development in the city. However, two councilmen voted against introducing them, arguing against their length.
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 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, although the school system is generally not included. 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.
Financial agreements support redevelopment
The first introduced ordinance would adopt a financial agreement between the city and 22nd Street Partners Urban Renewal, LLC for 25 East 22nd Street. The agreement would support the approved adaptive reuse of the former Mt. Carmel School into a multi-family residential building containing 31 residential apartments and 31 on-site parking spaces.
The second introduced ordinance would adopt a financial agreement between the city and Ave E Dev Mile High AMS Urban Renewal, LLC for 132 and 140 Avenue E. This supports the proposed 18-story Silk Lofts high-rise with 250 residential apartments, 1,975 square feet of commercial space, and 389 mechanical on-site parking spaces in addition to the use of an adjacent 20-parking space surface parking lot.
Another introduced ordinance would adopt a second financial agreement between the city and that redeveloper, this time for 157-163 Avenue E. This is for a proposed six-story Silk Lofts building on Avenue E with 36 units, 1,530 square feet of commercial space and 39 off-site parking spaces. The proposed building is part of the same application as the aforementioned 18-story building.
Additionally, an introduced ordinance would adopt a financial agreement between the city and 218-220 Broadway Urban Renewal, LLC for 218-220 Broadway. This agreement supports a proposed six-story, multi-family residential building containing approximately 40 units together with related site improvements at the former Delta Gas Station.
The last ordinance would authorize a five-year tax exemption on the assessed value of new improvements only for the newly constructed six-story, 18-unit multi-family building with a 21-parking space enclosed garage at 172 Avenue F.
PILOT length is a topic of discussion
The council voted 3-2 to introduce the ordinances, with First Ward City Councilman Neil Carroll and Third Ward City Councilman Gary La Pelusa voting against them and City Council President Sharon Ashe-Nadrowski, Second Ward City Councilman Sal Gullace, and City Councilman At-Large Juan Perez voting for them.
La Pelusa first object to the ordinances, citing the length. In 2020, the council adopted an ordinance limiting PILOT agreements to 20 years. Following its passage, the council vowed to revisit the issue in the future with the intention of possibly lowering it in 2021 to 15 years.
While discussion ensued periodically about lowering it to 15 years throughout last year, nothing substantiated. La Pelusa continued to stand his ground on the matter in the meanwhile, only supporting PILOT agreements that are 15 years or less. And at the Jan. 19 meeting, La Pelusa reiterated that he will not vote for any PILOT agreement that is longer than 15 years and that the council should move to limit the financial agreements to that length.
Carroll agreed with La Pelusa, opposing the length of the agreements. Meanwhile, Perez was in favor the union labor that could be used to construct the redevelopments, as he and the rest of the council were unconcerned with the length of the agreements.
Discussion will surely again ensue regarding the length of the agreements at the next council meeting when the ordinances are up for a public hearing and a vote.
The city council will meet next on Feb. 16 at 7 p.m. in the council chambers at City Hall at 630 Avenue C. Residents can attend virtually or in person. For more information, go to bayonnenj.org and click on the link on the calendar webpage.
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