West New York has approved another financial agreement to support waterfront redevelopment.
Mayor Gabriel Rodriguez and the Board of Commissioners adopted an ordinance at their September 28 meeting authorizing the payments-in-lieu-of-taxes (PILOT) agreement with Toll Parcel H Urban Renewal, LLC.
The site is located at 8 Avenue at Port Imperial, on the eastern side of Port Imperial Boulevard, in the town’s Controlled Waterfront Development Zone. The redevelopment area is currently vacant and surrounded by fencing, with plans for a multi-story residential redevelopment.
Site changed hands from redevelopers many times
Pursuant to the redevelopment plan for the site, Roseland/Port Imperial, LLC and the town entered into a redevelopment agreement in 1996 for the site.
In 1998, the rights and obligations of Roseland/Port Imperial, LLC under the Redevelopment Agreement were assigned to and assumed by Roseland/Port Imperial Partners, L.P., an affiliate of the redeveloper which acquired the title to lands comprising the redevelopment area.
By 2006, the site was owned by K. Hovnanian at Port Imperial Urban Renewal VIII, LLC, which had assumed the outstanding obligations of Roseland/Port Imperial Partners, L.P. under the redevelopment agreement.
On June 7, 2017, Toll Bros., Inc. entered into a contract to acquire the project site and subsequently assigned its interest in the agreement to its affiliate Toll Port Imperial, LLC. West New York consented to the transfer on September 21, 2017, by adopting a resolution authorizing it.
Through an assumption agreement on February 1, 2018, Toll Port Imperial LLC assumed the outstanding obligations of K. Hovnanian at Port Imperial Urban Renewal VIII, LLC under the redevelopment agreement for the site.
On July 8, 2021, the West New York Planning Board granted Toll Port Imperial LLC amended final major site plan approval with variance relief for redevelopment of the project site with an approximately 73-unit residential redevelopment, with 133 off-street parking spaces and eight on-street parking spaces, as well as other amenities and site improvements.
Previously approved as a six-story condominium building back in August of 2018, the applicant was granted permission to construct a 10-story building with the same number of units. The building has a larger footprint at the base that shifts to a smaller shape after the fourth floor, becoming a mid-rise tower. Amenities include a pool, private terraces, a common terrace on the roof, and green roofs, among other unspecified amenity spaces.
The application for the changes was heard in May of 2021 and approved by the board, with a resolution adopted later in July. Through an assumption agreement to be entered into between the parties, Toll Parcel H Urban Renewal, LLC took on the outstanding obligations of its affiliate, Toll Port Imperial, LLC, under the redevelopment agreement for the project site and will redevelop the site consistent with the terms and conditions in the redevelopment agreement and the site plan approval.
Financial agreement necessary to support the project
Toll Parcel H Urban Renewal, LLC has expressed to West New York that the project would not be feasible in its intended scope without financial assistance by the town, according to the ordinance. In order to improve the feasibility of the project, Toll Parcel H Urban Renewal, LLC filed an application with the town for approval of a long term tax exemption and financial agreement from West New York.
According to the ordinance, in addition to the profit limitations in the Long Term Tax Exemption Law, the nature of the project will entail an “inherent profit limitation” for Toll Parcel H Urban Renewal, LLC through the extra costs, issues, and responsibilities associated with the project “that are not present outside of the redevelopment context.” The ordinance states that there is a need recognized by the town to provide incentives to make redevelopment feasible.
After review of the request with the town attorney, redevelopment counsel and the town’s financial advisor, Mayor Rodriguez recommended that the application for the financial agreement be approved. In order to enhance the economic viability of and opportunity for a successful project, the town will enter into a financial agreement with the entity governing payments made to the town in lieu of real estate taxes on the project pursuant to the Long-Term Tax Exemption Law.
The PILOT will be for a 20-year term with an annual service charge based on 12.5 percent of annual gross revenues for years one to five; 13.5 percent for years six to 10; 14.5 percent for years 11 to 15; and 15 percent for years 16 to 20.
According to the ordinance, the town has found that the projected Annual Service Charge over the 20-year term will generate an average annual revenue for West New York of approximately $2,127,295 for the property. The ordinance states that the relative stability and predictability of the Annual Service Charge will make the project more attractive to investors and lenders needed to finance the project.
It is also estimated that the project will create jobs during construction and permanent jobs. According to the ordinance, West New York has determined that the benefits of the project significantly outweigh the costs to the town.
The board voted unanimously to adopt the ordinance. While this PILOT is for a portion of the site referred to as “Parcel H,” which consist of the eastern half of the site, this is just Phase 1. Phase 2 entails the redevelopment of the western half of the site known as Parcel F, with a seven-story residential redevelopment.
Officials have failed to respond to multiple requests for comment by the Hudson Reporter since the meeting in September. The next Board of Commissioners meeting is October 19 at 7 p.m. For more information, go to westnewyorknj.org.
For updates on this and other stories, check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Daniel Israel can be reached at email@example.com.