it's crazy that newport is still getting tax incentives for their construction. Yes, some of their new buildings are nicer, but the city really should insist that Newport contribute more to the city as a whole. Or do they? All I see is a relatively exclusionary neighborhood. If they get this incentive they should embrace being part of JC. Spruce up the mall parking garage along Marin at a minimum!!!!!

Lefrak Adding 360 Apartments at Newport

JERSEY CITY-Construction has started for Aquablu, the Lefrak Organization Inc.'s latest residential tower within the Newport planned community on this city's Hudson River waterfront. Aquablu is part of the four-tower residential and hotel expansion at Newport rolled out by the New York City-based Lefrak Organization just more than two years ago.

This portion of that larger expansion, the Aquablu building, will add 360 luxury rental apartments, ranging from studios to three-bedroom units in a 33-story tower with some ground-floor retail. Located at 110 River Dr. here, the tower is expected to be completed in about a year. The cost hasn't been released.

Design work for the 470,500-sf building was a collaboration between Poskanzer Skott Architects of Ridgewood, NJ and the Toronto-based Page + Steele Architects. Design features will include colored floor-to-ceiling windows and garden terraces.

"This will be one of Jersey City's premier residences," says Poskanzer Skott principal and partner Barry Poskanzer, who has worked on the project with project manager Anthony Juliano. "The designs will be dramatic, and it will have a lot of amenities and conveniences."

Aquablu will add to the existing several-hundred-acre Newport, which already consists of more than 14 million sf of construction. It already consists of some 5,000 apartment and condo units, five million sf of office space and two million sf of retail, including the three-story Newport Centre Mall.

http://www.globest.com/news/1227_1227/newjersey/173210-1.html

Hi Fat-Ass-Bike,

Please have a look at my older posts. The City practices needless double talk when it comes to the so-called "abatements."

The reason they accepted this one and all the other ones was not because of a need to spur development, but rather because:

1) The City receives more dollars from a property under a PILOT "abatement" than it does when the property is taxed traditionally.

2) The builder pays more dollars in taxes when the property is paying the PILOT "abatement" formula than when it pays traditional taxes, in exchange for some advance tax certainty.

Because of the sometime enormous overcharge caused by the PILOT formula, several abatements have been terminated by property owners on a voluntary basis in the last 3 years and Jersey City has lost millions of dollars of revenue as a result. They can make up those lost dollars by either raising the traditional property tax rate (and performing a re-val), or encouraging developers to take new PILOT deals.

In this case, if you read the history of the articles, the builder first did not want a PILOT deal, then asked for a 5-year abatement, then was rejected and told by the Council to come back for at least a 15-year PILOT, then started construction and came back with a 10-year PILOT to the City's liking, and then had the deal approved.

Unlike in NY and other places, "abatements" in Jersey City have nothing to do with spurring development, and never have. They have everything to do with the City covering its budget while keeping traditional property taxes at the relatively reasonable rate of 1.4% of value (as equalized). Unless the City can find a way to cut its budget, of course.

Quote:

I can't believe WE still need to 'spur' on development here (initially yes, but not now) and give out huge tax abatements.

Developers and Investors know full well that JC and its close distance to NY is the only few places available still to build large scale rentals / condo's / office buildings

Aquablu tower wins its abatement council shrugs off possible challenge

Friday, September 14, 2007
By KEN THORBOURNE
JOURNAL STAFF WRITER

In a move that may be open to legal challenge, the Jersey City City Council approved on Tuesday a 10-year abatement for the LeFrak Organization's Aquablu rental project in Newport.

The abatement for the 358-unit development had stalled due to a legal complication: Construction on the 31-story building is already under way.

As City Corporation Counsel Bill Matsikoudis points out in a memo to City Council members, "there is case law indicating that a tax abatement must be approved prior to the commencement of a project," since "the primary purpose of a tax abatement is to spur development."

But in his memo, Matsikoudis - who is on vacation and couldn't be reached to comment - maneuvers around this legal obstacle by pointing out that in a precedent-setting 1998 case involving a development in Camden, construction was complete when the abatement was approved.

But judging by his memo, Matsikoudis isn't convinced the Aquablu abatement is legally bulletproof.

"If the abatement were challenged, it may well fail, but such an outcome is not a guarantee," Matsikoudis wrote. "Additionally, the applicant has agreed to indemnify the city in the event of a challenge."

Council members Michael Sottolano, Mary Spinello, Peter Brennan, Bill Gaughan and Willie Flood voted for the abatement.

"I personally don't see a legal challenge," Gaughan said. "They (the developer) had their application in for a long period of time. I think there is a fairness issue because through no fault of their own, the city dragged its heels on this abatement."

City officials stopped approving abatements for two months earlier this year while they restructured guidelines for the program.

Council members Steve Fulop, Steve Lipski, and Mariano Vega were absent for the vote.

Its all Aqua along the water. Aqua has a retail base that sits opposite the retail base of Shore Club, the greenish tower. The tower part of Aqua is 31 stories.

There are 2 buildings coming up there. The taller one is a new apartment building (Aqua) and the shorter one is a commercial building for some stores. I've heard that Steven's (the school currently near Kim's) will be one moving to the smaller building.

I was in Hoboken todya nd noticed that they were building another building (looks like it will be a tower) in front of the ShoreClub at Newport. Any idea what this building is? How tall?

Aquablu's abatement on agenda
Tuesday, July 17, 2007
By KEN THORBOURNE
JOURNAL STAFF WRITER

A vote on a 10-year tax abatement for the LeFrak Organization's Aquablu rental project in Newport is on the agenda for tomorrow's Jersey City City Council meeting.

The proposed tax abatement - in the works since last December - calls for yearly "payments in lieu of taxes" to the city of 10 percent of gross annual revenue, which would equal $816,357 the first year, according to the developer.

The developer had been willing to live with a five-year abatement, but that would have meant paying conventional taxes, which the city splits with the local public school system and the county. "Payments in lieu of taxes" only go to the city.

James McCann, LeFrak's attorney, produced a chart for council members yesterday showing that over a period of 10 years, the 10/10 abatement agreement would generate roughly $5 million more for the city than the five-year abatement and five years of paying full conventional taxes - $8.3 million versus $3.2 million.

But the difference in cost to the LeFrak Organization is only about $1.6 million more for the 10-year abatement agreement, McCann said.

Developers tend to seek abatements because the banks they borrow money from prefer to deal with a constant instead of taxes that fluctuate from year to year.

The 31-story Aquablu is to consist of 363 residential units and 15,000 square feet of ground-floor retail.

To intro LeFrak deal tonight

Wednesday, June 27, 2007

Unwilling to live with a five-year tax abatement for the Aquablu - the LeFrak's Organization's newest residential project at Newport - Jersey City council members on Monday asked the developer's attorney to go with a 15-year abatement deal.

The 15-year agreement calls for 10 percent "payments in lieu of taxes" on the annual gross revenue for the first 10 years of the development and 12 percent for the next five years. The abatement is scheduled to be introduced at tonight's council meeting.

LeFrak's attorney, James McCann, said he had proposed to the mayor's "Tax Enhancement Committee" a 10-year abatement paying 10 percent "pilots," but that proposal had been rejected in favor of a stepped-up phase-in plan for paying conventional taxes.

The cost to his client for the five-year plan and the 10-year abatement paying a 10 percent "pilot" is exactly the same, McCann said.

But city officials prefer tax-abated "pilots" since the city doesn't have to share the money with county government or local schools.

The 31-story project, to be built in the northeast section of Newport, is to consist of 363 residential units and 15,000 square feet of ground-floor retail.

KEN THORBOURNE