JERSEY CITY LIST - Re: Development will now be rentals, Grove Street buildings will have 99 units [Real Estate]

Re: Development will now be rentals, Grove Street buildings will have 99 units

#139

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Last night was the first reading of the 10 year tax abatement. It still has to be approved at a second meeting.

Posted on: 2013/12/19 22:42

hero69

Re: Development will now be rentals, Grove Street buildings will have 99 units

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well, 10 year is better than 25 year..a step in right direction

Posted on: 2013/12/19 21:51

user1111

Re: Development will now be rentals, Grove Street buildings will have 99 units

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The council voted down a 25-year tax abatement for the Majestic II, a 99-unit residential and commercial development set for a lot next to City Hall. The long-term tax break, which would have been retroactive to 2007, when the deal was first approved by the council, has been changed to a 10-year deal that the council gave unanimous initial approval to last night.

Posted on: 2013/12/19 21:49

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Re: Development will now be rentals, Grove Street buildings will have 99 units

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First substantive item on the City Council
agenda on 12/18 --

Posted on: 2013/12/16 18:21

tommyc_37

Re: Development will now be rentals, Grove Street buildings will have 99 units

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So is the construction of this building still held up with abatement talk?

Posted on: 2013/12/16 17:01

jcwalkingman

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

brewster wrote:
Don't get me wrong, I think JC has squandered every cent it can get as a matter of policy for years on sweetheart contracts for employees and city contractors, and that forces tax increases. But your arguments are based on the false notion abated properties pay nothing. As many here can attest, their abated condos pay far more tax per $ of value than when you were paying ~ $11,500 on a place you sold for $1.2m. Your insistence on THEM being the budgetary bogyman is starting to seem disturbed.

You should be aware that the abatements on rental buildings have entailed both lower tax payments each year than on the new abated condos and much longer terms. I believe a typical abatement for a new condo building downtown has been 5-10 years, whereas that for an abated rental building has been 30 years. The assessed taxes in these abated condo buildings are typically about 4-5 times higher than they are for a unit of the same square footage in an abated rental building.

Posted on: 2013/12/15 18:21

SRhia

Re: Development will now be rentals, Grove Street buildings will have 99 units

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So - what's happening with the eval? Is it cancelled?

Posted on: 2013/12/14 1:31

CdeCoincy

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

Yvonne wrote:
Taxes increased over 85% under Healy, the municipal portion. It is due to tax abatements not being added to the ratable base. The State Comptroller said in 2010 that JC loses $120 million a year due to tax abatements. That report criticized JC and other urban districts for relying on abatements then asking for more money.

Is this another way of saying that had the properties been developed and fully taxed JC would be up 120 mil? Any estimate of how much development would not have happened w/o abatements?

Posted on: 2013/12/14 1:15

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Taxes increased over 85% under Healy, the municipal portion. It is due to tax abatements not being added to the ratable base. The State Comptroller said in 2010 that JC loses $120 million a year due to tax abatements. That report criticized JC and other urban districts for relying on abatements then asking for more money.

Posted on: 2013/12/14 0:17

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

Yvonne wrote:
This is a copy of the Hudson Reporter dated March 12, 2000. As you can see Brewster, the budget is $314 million. The city's history is the same as the Old Bergen Church. They celebrated their 350 years in 2010 so in 2000, Jersey City was 340 years old. So my facts are correct from 1660 to 2000, the budget grew from $0 million to $314 million. At the last budget hearing, thirteen years later, the budget was over $515.9 million over $201 million. Yet taxes keep rising, why? Tax Abatements which are not ratables.

Yvonne, I didn't dispute the rising budget but the falling ratable base you cite. Anyway, your reasoning is nonsense. Here's your argument in simile:
A man (the ratable base) makes $50k a year and his wife stays home. They spend $50k.
His wife goes to work (increased income from abated development PILOTS) and makes $30k.
They now spend $80k. Did the man have to make more money to spend that much? No, it was the additional money from his wife!

Don't get me wrong, I think JC has squandered every cent it can get as a matter of policy for years on sweetheart contracts for employees and city contractors, and that forces tax increases. But your arguments are based on the false notion abated properties pay nothing. As many here can attest, their abated condos pay far more tax per $ of value than when you were paying ~ $11,500 on a place you sold for $1.2m. Your insistence on THEM being the budgetary bogyman is starting to seem disturbed.

Posted on: 2013/12/13 22:25

Re: Development will now be rentals, Grove Street buildings will have 99 units

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This is a copy of the Hudson Reporter dated March 12, 2000. As you can see Brewster, the budget is $314 million. The city's history is the same as the Old Bergen Church. They celebrated their 350 years in 2010 so in 2000, Jersey City was 340 years old. So my facts are correct from 1660 to 2000, the budget grew from $0 million to $314 million. At the last budget hearing, thirteen years later, the budget was over $515.9 million over $201 million. Yet taxes keep rising, why? Tax Abatements which are not ratables.

Posted on: 2013/12/13 20:58

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

Yvonne wrote:
Well, here is a fact, from 1660 to 2010 the budget grew from $0 to $314 million, thirteen years later an additional 201 million. But taxes went up because all of those abated tax dollars did not lower the ratable base.

You keep saying this same nonsense, that abated properties contribute nothing to the city budget.

ITS SIMPLY NOT TRUE!

As has been said again and again, in many cases the city collects MORE in PILOTS than they would have in taxes since they're cutting out the schools and county. And as I've said again and again, if anyone is underpaying taxes around here, it was YOU (when you were Downtown) and the other owners of under assessed property who are paying real rates 1/3 of what many others are paying.

Posted on: 2013/12/13 4:08

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Well, here is a fact, from 1660 to 2010 the budget grew from $0 to $314 million, thirteen years later an additional 201 million. But taxes went up because all of those abated tax dollars did not lower the ratable base. It is the ratable base that keep any municipality fiscal sound and JC ratable base is too low. Also when an abatement expires, every developer runs to tax court and win an tax appeal to lower their tax rate, and we the public see more bonding debt. Abatements has hurt the ratable base and will continue to do so.

Posted on: 2013/12/13 2:41

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

Yvonne wrote:
Abatements hurt the ratable base. While it is true the city keeps the money, the ratable base is lower now than 1988 when reval happened. The ratable base was around $7 billion, 25 years later it is under $6 billion. We are spending more because tax abatements are not ratables. The lower the ratables the higher the taxes for everyone.

Please post or link references, I don't believe it, even if the current figure is in 88 dollars. The only losses of property to the base would be vacant or brownfield properties that were developed via abatements. But ALL of JC's properties have at least tripled in dollar value since then, Downtown far more. Unless what you're quoting is the "assessed value" total, which naturally hasn't grown much since the last reval. I don't believe $1b in vacant land was taken off the tax rolls.

You insist on ignoring the PILOT contributions to the city budget in these "ratable base" rants, like they're nothing. But they're many millions.

Posted on: 2013/12/13 2:02

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Abatements hurt the ratable base. While it is true the city keeps the money, the ratable base is lower now than 1988 when reval happened. The ratable base was around $7 billion, 25 years later it is under $6 billion. We are spending more because tax abatements are not ratables. The lower the ratables the higher the taxes for everyone.

Posted on: 2013/12/13 1:49

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

Adonis wrote:
One thing to keep in mind is that the Jersey City government gets more tax money from giving out the abatements than it would if it did not give them out.

Under normal taxation JC has to share the tax revenue with the county and the school system. When it gives out an abatement, yes, the developer pays less taxes, but JC gets more tax dollars because JC gets to keep what would otherwise go to the county and the school system. Essentially JC is ripping off the county and schools.

Which is why they're a problem when they become the rule as they did Downtown, rather than the exception. That something can be abused is not conclusive proof that it's evil, it's only proof the process is broken.

Quote:

...which means the rest of us have to make up the difference to support the school system.

Actually it means the state is making up the difference, since I believe they pay most of the budget. Now THERE'S a broken system, local funding of schools.

Posted on: 2013/12/13 1:06

Re: Development will now be rentals, Grove Street buildings will have 99 units

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...which means the rest of us have to make up the difference to support the school system.

Posted on: 2013/12/13 0:59

Adonis

Re: Development will now be rentals, Grove Street buildings will have 99 units

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One thing to keep in mind is that the Jersey City government gets more tax money from giving out the abatements than it would if it did not give them out.

Under normal taxation JC has to share the tax revenue with the county and the school system. When it gives out an abatement, yes, the developer pays less taxes, but JC gets more tax dollars because JC gets to keep what would otherwise go to the county and the school system. Essentially JC is ripping off the county and schools.

Posted on: 2013/12/13 0:54

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Developers starting asking for abatements when they realized JC was a pushover. But being a pushover is no reason to award an abatement. It was also a way for mayors to finance their campaign. It was the developers who paid for Schundler's governors campaign via abatements.

Posted on: 2013/12/13 0:45

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

Yvonne wrote:
Brewster, I was around when redevelopment started in the early 1980s. Developers never asked for an abatement, the city offered an abatement for two reasons: affordable housing and to prepay their taxes. Newport and the Colgate Redevelopment did not ask for an abatement. Dixon Mills was developed without a long term abatement including Society Hills which was built on contaminated land. These 1980s development did not come before the city council and said, I need an abatement in order to develop. I was there and I am glad former Mayor McCann wrote about this recently in his letter to the editor several weeks ago.

So what? If developers build without incentives I guess it wasn't that blighted, or they got really good deals for the land and got many infrastructure improvements paid for by gov't. But the fact is no one is currently stampeding to develop in the wards other than E. Abatements can be a tool for the city to use, despite your abhorrence of them. That they have been seriously abused Downtown since recovery from the 90's downturn is a different issue.

Your insistence that old residents are subsidizing abated properties is so far from the truth it's ludicrous, I'm tiring of pointing out that those new residents pay 2 or 3 times the tax per dollar of value than you did Downtown.

Posted on: 2013/12/13 0:40

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Brewster, I was around when redevelopment started in the early 1980s. Developers never asked for an abatement, the city offered an abatement for two reasons: affordable housing and to prepay their taxes. Newport and the Colgate Redevelopment did not ask for an abatement. Dixon Mills was developed without a long term abatement including Society Hills which was built on contaminated land. These 1980s development did not come before the city council and said, I need an abatement in order to develop. I was there and I am glad former Mayor McCann wrote about this recently in his letter to the editor several weeks ago.

.

Posted on: 2013/12/13 0:20

user1111

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Either you are an idiot or you are smoking some serious crack. DTJC was a blighted area about 20 years ago it is not no longer blighted. This is not too hard to understand.

When DTJC got sweet abatement deals the rest of the city dealt with it and now its your turn to deal with the rest of the city getting sweet abatement deals. Like it or not, just get a clue already.

Posted on: 2013/12/12 22:25

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hero69

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Por favor, if these areas are so blighted and desperate for investment, then the city should structure the abatements with hurdles and provisions that it collects a portion of the excess returns/profits after development costs have been recouped.

Posted on: 2013/12/12 22:17

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

vindication15 wrote:
A tax break and a direct money incentive are two sides of the same coin if one assumes spending is unaffected - which is safe to assume given current levels.

Listen up, your preconceptions are preventing you from understanding. Abatements cost no cash and bring IN more tax than there was before, PILOTS on new development are far more than the tax on an empty lot. If you can get someone to invest in those areas you despise with no public capital and increased city income, why wouldn't you?

But you are correct that the "blight" designation is apparently subject to abuse. The designation should have a sunset provision, maybe when the value per acre in the district reaches a trip point like 150% city average. Can't be blighted if it's better than average!

Posted on: 2013/12/12 21:53

vindication15

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Quote:

brewster wrote:
V, you miss the point of abatements, but unfortunately you're not alone. It's not "money spent", it's a tax break given to a developer to encourage investment in a "blighted area" that otherwise isn't attractive, JUST LIKE GREENVILLE OR BL!! It's creating a PILOT paying property where there was previously an empty lot.

The fact that our city gov't can't say no to Downtown developers who want this candy, despite the area no longer needing incentives, is the main issue. I don't blame the developers, they're just playing the game as it's been played for decades, why shouldn't they? They're not altruists, but the city needs to be the grownup who says "no".

But what's under discussion isn't a new abatement. It's renegotiating an old one. And, as I understand it, since Mayor Fulop can't just cancel the old one, he's trying to squeeze them harder in exchange for the perks they now want. What else can he do?

Quote:

vindication15 wrote:
It's not fair to have abatements in Greenville or BL and not have them in DTJC. I don't want the city subsidizing areas (with my tax dollars) which I personally don't think will succeed because of current geography and/or troubling stats like crime.

It's a fairness issue. If you are for tax abatements, then you shouldn't be specific to geography. If you are anti tax abatements, then you shouldn't be specific to geography.

In terms of "having to spend money to make money" , that is risk and I would argue it is less risky to do that in DTJC than BL or Greenville or even the heights.

A tax break and a direct money incentive are two sides of the same coin if one assumes spending is unaffected - which is safe to assume given current levels.

If you're telling me that tax breaks bring about a decrease level of spending then I would agree with you but that's not the case.

What exactly is a blighted area? Is that based on crime, demographics, etc? Things I can actually measure and not based on politician's favorite developers/causes? And why do blighted areas inherently deserve a tax break/abatement? Why not let the free market determine which area is attractive enough to develop? More importantly, there already is a way for blighted areas, free from corruption, to develop - it is to wait until other individuals from higher priced areas to get priced out and move to these new areas. Ie. See HARLEM.

I vote for politicians not so they can take care of their favorite people/companies but to manage my tax dollars fairly and objectively.

Posted on: 2013/12/12 20:50

murican

Re: Development will now be rentals, Grove Street buildings will have 99 units

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Why don't they amend the deal to have the 99 units, but the increased units will all have to be at affordable rates!
I can't see why if developers want abatements they can't include on-site affordable units. ( Remember affordable
doesn't mean "welfare" it means middle class people making middle class wages.)

Considering the traffic situation in the Grove area,
the parking requirements should stand. If the developers
don't like it, then stick to the original abatement plan.

Posted on: 2013/12/12 20:25

Re: Development will now be rentals, Grove Street buildings will have 99 units

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V, you miss the point of abatements, but unfortunately you're not alone. It's not "money spent", it's a tax break given to a developer to encourage investment in a "blighted area" that otherwise isn't attractive, JUST LIKE GREENVILLE OR BL!! It's creating a PILOT paying property where there was previously an empty lot.

The fact that our city gov't can't say no to Downtown developers who want this candy, despite the area no longer needing incentives, is the main issue. I don't blame the developers, they're just playing the game as it's been played for decades, why shouldn't they? They're not altruists, but the city needs to be the grownup who says "no".

But what's under discussion isn't a new abatement. It's renegotiating an old one. And, as I understand it, since Mayor Fulop can't just cancel the old one, he's trying to squeeze them harder in exchange for the perks they now want. What else can he do?

Quote:

vindication15 wrote:
It's not fair to have abatements in Greenville or BL and not have them in DTJC. I don't want the city subsidizing areas (with my tax dollars) which I personally don't think will succeed because of current geography and/or troubling stats like crime.

It's a fairness issue. If you are for tax abatements, then you shouldn't be specific to geography. If you are anti tax abatements, then you shouldn't be specific to geography.

In terms of "having to spend money to make money" , that is risk and I would argue it is less risky to do that in DTJC than BL or Greenville or even the heights.

Posted on: 2013/12/12 20:14