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Re: Show us the money
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Home away from home
 
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2004/2/6 23:13 Last Login : 2021/7/30 1:08 From Jersey City
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if you read the article further, you'll see that this issue was raised and pursued with vigilance by a resident (council again asleep at the wheel), Esther Wintner.
Posted on: 2012/8/15 19:22
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Quite a regular
 
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Thanks for the background, Jaded! In a sick way, this all kind of makes sense. This cesspool of integrity continues to reinforce in my mind that my true calling should have been a J.C. slumlord... =P
Posted on: 2012/8/15 14:05
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Re: Show us the money
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Home away from home
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If I recall correctly, both Crystal Point and77 Hudson started out with the same 20-year abatement. Then the real-estate bubble burst and sales ground to a halt everywhere. Crystal Point appealed to the city to sweeten the abatement term to 30 years, arguing it was having trouble selling units. The developers, being contributors to Team Healy, of course, got what they wanted. Not long after that, there was that big FBI corruption dragnet in the summer of 2009 that landed Healy cronies like Beldini in jail. Unfortunately for K Hov, 77 Hudson's developer, it made its request for a sweeter abatement AFTER the mass arrests. Suddenly, Healy and his cronies not in jail were gun shy about appearing too cozy with developers. I remember the city even gave some lame reason for turning down 77 Hudson's request, saying it was closer to mass transit than Crystal Point. Anyway, K Hov sued the city, and the two sides reached some sort of settlement earlier this year that benefits the developer but not buyers of condo units there.
Posted on: 2012/8/15 12:12
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Re: Show us the money
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If I knew I could rent a studio at the Aquablu for $866 per month or a one-bedroom for not much more, I would never have bought my current place in Jersey City! Would have gladly rented there, then put my down payment into a mutual fund or something. $866 for a studio on the waterfront. Ha! Yeah right. Whether we can accuse the LeFrak organization of not being truthful on its application I don't know, but I feel like the folks on Grove Street are just giving away the good parts of the city to large-scale developers at the expense of the rest of us. Canco Lofts probably does need the abatements it got, but how on earth did anybody think that any property on the waterfront could be considered "blighted"? That makes no sense.
Posted on: 2012/8/15 4:00
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Re: Show us the money
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Welcome to Casablanca on the Hudson! Where, big or small, what you pay in taxes has nothing at all to do with what your neighbors pay! And everything to do with who your lawyer knows! (see the reval thread)
Posted on: 2012/8/15 2:10
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Re: Show us the money
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Quite a regular
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I've been wondering about this myself. Even the application of these abatements seems to be nonsensical... I haven't been able to figure out why Crystal Point, which is virtually 10 feet from the river's edge, gets a staggered 30 year abatement, while a similarly appointed building 200+ feet inland, 77 Hudson, has to make due with the standard 20 year term. Is it because the developer was afraid a tremblor would send the glass structure crashing down into the Hudson and wanted to hedge its bets? I don't understand how the city could allow such favorable terms to one project while denying them to others. On second thought, maybe it isn't that hard to fathom or even surprising, but it's still bad business. And here I am thinking of purchasing on the "Gold Coast." Ha!
Posted on: 2012/8/15 1:11
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Re: Show us the money
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If the amount a development pays in PILOTS is not commensurate with the amount they would have paid if rents were accurately predicted instead of lowballed, then the city isn't getting the PILOT payments is should. The fact that "the amount they pay is occasionally equal to regular taxes" isn't really relevant to the discussion. If "drivers occasionally drive the speed limit" does it mean we don't need traffic cops? Any system needs regulators and audits, or else is runs out of control. The schools thing is a different discussion, there's plenty of places this city could use cash for infrastructure, like the sewers. As long as we're going to have abatements lets at least have them properly administered.
Posted on: 2012/8/15 1:09
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Re: Show us the money
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brewster wrote: You miss the point. The value of a rental property, hence it's tax assessment, is based upon the rents. If an abatement is based upon a certain projected rent roll, and the developer is taking in much more, then the city has been shortchanged. It has nothing to do with the tenants. One way of remediation the situation would have been to build into the abatement a clause raising the PILOT proportional to the rents, but the developer would say that defeats the whole point of the abatement fixing the tax payment. To which the other side says that the abatement rewards lowballing the prospective rents. And so on, and so on.... according to the article, the pilot are sometimes in line with the regular taxes and all of it goes to the city budget except for schools. How is the city short changed? Unless you mean the schools which I don't believe all the money in the world can improve certain JC schools. I'm not even sure they are lowballing the rents by THAT much. At least not as much as the article makes you to believe. Listings are listings and are not an accurate estimate of how much rents are...that's like going to a car dealership and basing how much a car costs on the msrp price....you would be the biggest of fools to pay sticker price.
Posted on: 2012/8/14 22:49
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Re: Show us the money
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You miss the point. The value of a rental property, hence it's tax assessment, is based upon the rents. If an abatement is based upon a certain projected rent roll, and the developer is taking in much more, then the city has been shortchanged. It has nothing to do with the tenants. One way of remediation the situation would have been to build into the abatement a clause raising the PILOT proportional to the rents, but the developer would say that defeats the whole point of the abatement fixing the tax payment. To which the other side says that the abatement rewards lowballing the prospective rents. And so on, and so on....
Posted on: 2012/8/14 20:18
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Re: Show us the money
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There should be a rule that if the developer profits more than his initial estimates, a big portion of the profits should go to the residents either by way of reduced rent or reduced condo fees.
I do not agree that more should go into the JC public school system. JC public schools do not need more money to perform better - they need a complete overhaul of how children are disciplined and educated in the schools - this is more than test scores. Maybe setup an incentive pool based on various measures. In any case, I do not think the waterfront needs abatements anymore but you're going to take away abatements from canco? Come on..have these people been to canco - it's not in a desirable place. Quote: According to the development?s web site (www.NewportRentalsNJ.com), there was a 409 square foot studio available for $2,028 last week. An 812 square foot one bedroom, one bathroom was advertised on the web site for $2,560. A two bedroom, two bath 1,111 square foot apartment was renting for $3,348. Another two bedroom unit with an unobstructed view of Manhattan rents for $3,749. But these rates aren?t even close to the rent estimates Aqua Blu?s developer, Jamie LeFrak, used when he applied for his abatement from the city in 2007. According to LeFrak?s application, Aqua Blu would have approximately 20 studio apartments that would collectively generate $208,000 annually in rent. This breaks down to about $866 per month in rent for a studio ? $1,162 less than the studio apartment advertised online last week. You can't just take 3 or 4listings and call LeFrak a liar..that's not fair. You should take the market value of studios in high rise buildings. I can guarantee you that the studio is not going to rent for 2028...I believe average prices are 1800 for a studio. I think newport, paulus hook, exchange place are areas that do not need anymore abatements. But the PAD, liberty harbor, journal square, areas west of grove are still in need of abatements to attract developers. There's a middle ground between "all developers steal money from the city and should be crucified" and "give the developers all they want"...
Posted on: 2012/8/14 19:24
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Show us the money
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Home away from home
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2012/1/11 18:21 Last Login : 2019/12/26 15:30 From GV Bayside Park
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Show us the money
City probes downtown development with generous tax exemption, and others, to see if they are holding back by E. Assata Wright After a year of questions from the public, the city?s tax collector will audit a high rise waterfront development that received a generous tax exemption agreement which some residents say shortchanges the city millions of dollars in tax revenue each year. A state official also confirmed last week that the audit of this development, known as Aqua Blu, is part of a larger audit of other properties that have received controversial tax breaks from the city in recent years. Developers often enter into a tax abatement agreement, or payment in lieu of taxes (PILOT), to pay a separate fee to the city instead of paying fluctuating property taxes. This keeps their tax rate stable over a number of years. The amount they pay is occasionally equal to regular taxes, and can be based on a percentage of their profits. The money goes directly into the city budget and does not support local schools, although developers pay a nominal fee for county taxes. _____________ Some residents say these tax credits shortchange the city millions of dollars in tax revenue each year. However, such deals are controversial, because regular taxpaying residents feel they end up shouldering a bigger tax burden than wealthy developers. By the numbers The original intent of such deals was to draw developers to blighted areas. But the tony Newport community that houses Aqua Blu is hardly blighted. Located at 110 River Dr., Aqua Blu features floor-to-ceiling windows, a 24-hour concierge, and gorgeous views of the New York skyline. According to the development?s web site (www.NewportRentalsNJ.com), there was a 409 square foot studio available for $2,028 last week. An 812 square foot one bedroom, one bathroom was advertised on the web site for $2,560. A two bedroom, two bath 1,111 square foot apartment was renting for $3,348. Another two bedroom unit with an unobstructed view of Manhattan rents for $3,749. But these rates aren?t even close to the rent estimates Aqua Blu?s developer, Jamie LeFrak, used when he applied for his abatement from the city in 2007. According to LeFrak?s application, Aqua Blu would have approximately 20 studio apartments that would collectively generate $208,000 annually in rent. This breaks down to about $866 per month in rent for a studio ? $1,162 less than the studio apartment advertised online last week. Read more: Hudson Reporter - Show us the money City probes downtown development with generous tax exemption and others to see if they are holding backMore on Show us the money.
Posted on: 2012/8/14 18:59
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