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Re: Developer Scales Back Abatement (Jersey Journal)
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I believe they re-assess the property at its correct level. As I understand it, the county/state was always getting something, just less than what they would normally because taxes weren't being levied against the full value of the property, Once the abatement expires, the property gets re-assessed and is responsible for it's full tax share. I could be completely off the mark on this, but I think the PILOTS are sort of like a payoff to the city to value a property at a lower level for a fixed period of time.

Posted on: 2007/4/27 17:32
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Re: Developer Scales Back Abatement (Jersey Journal)
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does anyone know what happens when a tax abatement expires? Does this simply mean that the money is now directed from the city hall back to the county/state etc? Does an expiring tax abatement have any effect at all on the person paying the property taxes? in other works.. will they go up at that point?

Posted on: 2007/4/27 16:00
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Re: Developer Scales Back Abatement (Jersey Journal)
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I wasn't aware of any of this.
can't we just kick all the kids out of jersey city and send them to bayonne? i'm sick of these punks beating everyone up and taking all my tax money for schools. to hell with these punks. tax abaitments are now two thumbs up in my book.

Posted on: 2007/4/26 23:39
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Re: Developer Scales Back Abatement (Jersey Journal)
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Quote:

soshin wrote:
More money for schools, less money for city cronies! Yay!




Oh my God !!! I finally agree with Soshin.

I view Abatements as ?Economy Discrimination?

Cuts in Education hurt the Poor the most. They are the ones that need education the most to break the cycle of poverty.



This fiscal year the JC School System Budget was cut by 1 million dollars by Hudson County.

I wonder why??!!!

The issue is that the parasites in City Hall love their abatements.

With abatements City Hall can continue to play their budgetary ?Shell Game? and get Political contributions too.

Thoughts ???

Posted on: 2007/4/26 23:33
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Re: Developer Scales Back Abatement (Jersey Journal)
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Quote:

PhillyGirl wrote:
Quote:

Kindelan wrote:
If abatements result in developers actually paying more taxes why would any of them agree to them in the first place?


Thus, my general confusion.


It amounts to project finance decision. I'll preface everything I'm about to say with the fact that I don't know much about this particular property. Abatements essentially lock in the tax rate for property over a period of time. The developer has to make the calculation whether they think the assessment value of the condos, or rental income, multiplied by the tax rate will be more or less in the future than the fixed abatement (discounted for time). In a declining market, it very easily possible that city taxes may be cheaper, if the formula to calculate the abatement isn't adjusted.

Sorry if this is confusing, it's the end of the day.

Posted on: 2007/4/26 21:54
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Re: Developer Scales Back Abatement (Jersey Journal)
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I don't think it's a matter of paying more in taxes under a PILOT agreement, instead I believe these PILOTS charge the properties less overall, but the city collects a larger amount without having to share it with the state/county.

Posted on: 2007/4/26 19:52
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Re: Developer Scales Back Abatement (Jersey Journal)
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Quote:

Kindelan wrote:
If abatements result in developers actually paying more taxes why would any of them agree to them in the first place?


Thus, my general confusion.

Posted on: 2007/4/26 19:23
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Re: Developer Scales Back Abatement (Jersey Journal)
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I have lived next to this piece of crap for more than a year and have never seen it referred to as Grove Pointe II.

Posted on: 2007/4/26 19:21
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Re: Developer Scales Back Abatement (Jersey Journal)
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If abatements result in developers actually paying more taxes why would any of them agree to them in the first place?

Posted on: 2007/4/26 19:20
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Re: Developer Scales Back Abatement (Jersey Journal)
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More money for schools, less money for city cronies! Yay!

Posted on: 2007/4/26 19:19
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Re: Developer Scales Back Abatement (Jersey Journal)
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Quote:

PhillyGirl wrote:
Quote:

missa wrote:

ya know that real ugly building that you see when you get out of the grove street path station?

thats it.


I thought that was GP I.


you look at the site and figure it out. as far as i know that is grove and CC drive.

Posted on: 2007/4/26 19:15
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Re: Developer Scales Back Abatement (Jersey Journal)
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missa wrote:

ya know that real ugly building that you see when you get out of the grove street path station?

thats it.


I thought that was GP I.

Posted on: 2007/4/26 19:10
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Re: Developer Scales Back Abatement (Jersey Journal)
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Oh, and the school system can?

I know I am totally ig'nant when it comes to this stuff, but how is it that the city has the power to grant an abatement, when it is not the sole recipient of the tax funds?

And, also, isn't the point of offering abatements to get folks to build here when they wouldn't otherwise? If they're not pulling out of the project altogether, what is the problem?

I think I might agree with blaw on this one. Yikes.

Posted on: 2007/4/26 19:07
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Re: Developer Scales Back Abatement (Jersey Journal)
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Quote:

PhillyGirl wrote:
I am confused. What/where is GrovePointE II? It can't be a new one, since this article claims it's opening this summer. Is it a part of GrovePointE I?

I am further confused. I thought us do-gooder JC folks were supposed to hate abatements because in the end the taxpayers get screwed. But if the city actually gets MORE money from PILOTs than from regular taxes, why are we against them?

Help.


ya know that real ugly building that you see when you get out of the grove street path station?

thats it.

the city is also supposed to only employ union workers on abated builds and give us basic public utilities, so in theory they are good, in practice, no.

Posted on: 2007/4/26 19:04
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Re: Developer Scales Back Abatement (Jersey Journal)
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Because the city can't be trusted to do the right thing by the schools.

Hallelujah, Holla Back.

Posted on: 2007/4/26 19:03
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Re: Developer Scales Back Abatement (Jersey Journal)
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I am confused. What/where is GrovePointE II? It can't be a new one, since this article claims it's opening this summer. Is it a part of GrovePointE I?

I am further confused. I thought us do-gooder JC folks were supposed to hate abatements because in the end the taxpayers get screwed. But if the city actually gets MORE money from PILOTs than from regular taxes, why are we against them?

Help.

Posted on: 2007/4/26 19:00
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Re: Developer Scales Back Abatement (Jersey Journal)
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It is telling, to me, that what should be viewed as an improvement, is being eyed with suspicion by city government.

Posted on: 2007/4/26 18:49
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Developer Scales Back Abatement (Jersey Journal)
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Developer scales back abatement
Wednesday, April 25, 2007
By KEN THORBOURNE
JOURNAL STAFF WRITER

In a move that has city officials nervous, a Downtown developer is bowing out of 20-year tax abatement deal with the city in favor of a five-year deal.

Schenkman Kushner, builder of Grove Pointe II at the corner of Grove Street and Christopher Columbus Drive, has dropped its 20-year deal with the city, and instead has negotiated a five-year phase-in plan to pay full conventional taxes.

According to James McCann, the developer's attorney, Schenkman Kushner would have paid the city $200,000 to $300,000 more per year under the 20-year abatement deal than it would by simply paying conventional taxes.

It's the first time McCann - who works for several major developers in the city, including the LeFrak Organization - could remember a developer bowing out of a long-term tax abatement.

City officials cherish tax abatements since the "payment in lieu of taxes" paid by the developer all goes to the city. Conventional taxes are split with the county and school system.

"A five-year abatement sounds right to the public, but it doesn't really help Jersey City financially," said City Council President Mariano Vega, at Monday's caucus meeting.

The city raked in $80 million this year in PILOTs, perhaps the biggest source of revenue for its $420 million budget.

The council is scheduled to vote tonight on Grove Pointe II's five-year abatement. The 458-unit market rate rental project is scheduled to open this summer.

When the original abatement was negotiated in 2004, the city's ratio - the rate properties are assessed at compared to their true value - was roughly 51 percent; and the PILOT was based on 16 percent of the project's gross annual revenues, city officials.

But the current ratio in the city is 28 percent, which means a $100,000 home is taxed as if were worth $28,000, city officials said.

The steep drop in the ratio made the 20-year abatement - which the developer has the right to walk away from - untenable," McCann said.

To get the five-year phase-in deal with the city, the developer agreed to forgive a $1.6 million tax abatement "pre-payment" to the city. The city also received a $750,000 contribution for its affordable housing trust fund.

Posted on: 2007/4/26 18:31
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