West New York weighs PILOT agreement for new waterfront residential buildings

Meanwhile, the town awarded five year tax exemptions for two projects

West New York is considering granting a payments-in-lieu-of-taxes (PILOT) agreement to a redeveloper to support the construction of new waterfront residential buildings. Meanwhile, the town has also recently granted five year tax exemptions to other redevelopment projects across West New York.

New buildings at Port Imperial

- Advertisement -

The PILOT ordinance was introduced by Mayor Gabriel Rodriguez and the West New York Board of Commissioners at its July 27 meeting. Previously, the ordinance was introduced at the May meeting this year, but withdrawn at the recommendation of corporation counsel

Now the town is moving forward with the financial agreement with RB III Apts Urban Renewal, LLC to support the construction of two new buildings at the Riverbend redevelopment. The property is located on the eastern side of Port Imperial Boulevard, in the town’s Controlled Waterfront Development Zone.

Riverbend Building Company II, LLC, an affiliate of the previously mentioned entity, got approval from the the West New York Planning Board for the project in November of 2020. But the redeveloper had to make modifications to the site plan due to changes in FEMA’s policies regarding below grade parking in multifamily buildings, requiring it to be heard again at the May meeting after which the board passed a resolution approving the project at its April meeting.

Under the approvals, the redeveloper adjusted the lot line between two parcels so that the one lot with an existing decreased in size from 3.15 acres to 2.997 acres and another lot increased in size from 1.73 acres to 1.881 acres.

On the lot that was increased, the redeveloper will demolish the existing Buildings 2 and 3 of the Riverbend development and construct two new residential buildings with rental units at market rate, according to the ordinance. The new Riverbend 2 building will have 164 units, an increase from the existing building which contains 87 units; the new Riverbend 3 building will have 426 units, an increase from the existing building containing 126 units.

Terms of the PILOT agreement

According to the ordinance, the project would not be feasible without the financial assistance of the town, leading to the redeveloper applying for the PILOT agreement. As such, the redeveloper sought to support the project by applying for a PILOT agreement, as is allowed per the state’s Long-Term Tax Exemption Law.

After review of the request together with the town attorney, redevelopment counsel and the town’s financial advisor, the mayor has recommended that the long-term tax exemption and financial agreement be approved, according to the ordinance. The ordinance authorizes the town to accept, in lieu of real property taxes, an annual service charge to be paid by the redeveloper.

The PILOT will be for a 30-year term with an annual service charge based on 11.5 percent of annual gross revenues for years one to five. The annual service charge increases to 12 percent for years six to 10; 12.5 percent for years 11 to 15; 13 percent for years 16 to 20; and 14 percent for years 21 to 30.

The property currently generates $1,400,000 in real estate tax revenue. The projected annual service charge over the 30-year term will generate an average of approximately $2,600,000, according to the ordinance. The project is also estimated to create temporary jobs during construction, as well as permanent jobs.

The ordinance will be up for a public hearing and vote at the next meeting. The West New York Board of Commissioners will meet on August 10 at 12:30 p.m. For more information, go to westnewyorknj.org.

Five-year tax exemption for 18 units

At an earlier July meeting, the town also adopted an ordinance authorizing a five year tax exemption for a residential building to be constructed at 582-586 66th Street. The 18-unit project is slated to be constructed by Mars Equities, LLC on the currently vacant lot.

West New York’s Five Year Tax Abatement Ordinance permits the town to enter into a tax agreement for the exemption and abatement of local real estate property taxes. Under the agreement, it instead accepts the payment of an amount in lieu of full property taxes in an area in need of rehabilitation.

In 2021, this property generated approximately $11,533.50 in taxes, all of which represented taxes on the land. Under the five year tax exemption, the redeveloper would be required to pay the town full taxes on the land and existing improvements which shall continue to be conventionally assessed and taxed.

Also under the five year tax exemption, the redeveloper would pay the town a payment in lieu of taxes for the new improvements on the property. According to the ordinance, the estimated tax due on the improvements on the completed project will total approximately $67,601.00 total for the 18 residential units.

In the first full year following substantial completion, there is no payment due by the redeveloper. In the second year, the redeveloper will pay 20 percent of taxes otherwise due on the new improvements, estimated to be $13,520.20 of the aforementioned $67,601.00.

In the third year, the redeveloper will pay 40 percent of taxes otherwise due on the new improvements, estimated to be $27,040.40. In the fourth year, the redeveloper will pay 60 percent of taxes otherwise due on the new improvements, estimated to be $40,560.60. And in the fifth year, the redeveloper will pay 80 percent of taxes otherwise due on the new improvements, estimated to be $54,080.80.

Other financial agreement granted

The only other financial agreement approved by the board of commissioners was another five year tax exemption with 6115-6119 Broadway, LLC. The the tax break supports the already constructed 18 residential units at 6115-6119 Broadway.

The board adopted this ordinance at their June meeting. In 2020, the property generated approximately $102,917.28 in taxes, all of which represented taxes on the land. Under the five-year tax exemption, the redeveloper will be required to pay the town full taxes on the land and existing improvements, which will continue to be conventionally assessed and taxed.

Also under the five-year tax exemption, the redeveloper will pay the town a payment in lieu of taxes for the new improvements on the property. The payment will be based on an approximate estimated tax otherwise due on the improvements on the completed project of approximately $77,889.57 total for the 18 residential units.

In the first full year following substantial completion, there will be no payment on the new improvements. In the second year, the redeveloper will pay an amount equal to 20 percent of taxes otherwise due on the new improvements, estimated to be $15,577.91 of the $77,889.57.

In the third year, the redeveloper will pay 40 percent of taxes otherwise due on the new improvements, estimated to be $31,155.83. In the fourth year, the redeveloper will pay 60 percent of taxes otherwise due on the new improvements, estimated to be $ $46,733.74. And in the fifth year, the redeveloper will pay 80 percent of taxes otherwise due on the new improvements, estimated to be $62,311.66.

West New York continues to help support redevelopment in town through the use of financial agreements.

For updates on this and other stories, check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Daniel Israel can be reached at disrael@hudsonreporter.com.

Bayonne
broken clouds
80.2 ° F
83.2 °
74.2 °
69 %
3.6mph
75 %
Wed
85 °
Thu
85 °
Fri
84 °
Sat
80 °
Sun
78 °
- Advertisement -
2,284FansLike
13,016FollowersFollow

Upcoming Events

NORTH BERGEN HIGH SCHOOL*CLASS OF ‘72*50th Reunion
• 05/30/2021 - 09/24/2022 at 7:00 pm - 11:00 am


The Irish Mob of Hell's Kitchen
• 03/04/2022 - 12/17/2022 at 6:00 pm - 8:00 pm


Bayonne Midtown Book Club
• 08/09/2022 - 08/10/2022 at 7:00 pm - 8:30 pm


Hoboken Kid returns to perform live music in hometown.
• 08/11/2022 at 12:00 am


Energy Medicine Yoga
• 08/13/2022 at 2:00 pm - 3:30 pm


Current Issue