Why abate Trump deal?

Saturday, July 15, 2006

Letters to the Editor

The Jersey Journal

Your article on the latest Jersey City boondoggle, cites the failure of the city to hold parties to an agreement with it, to it. The city now plans to allow Mr. Trump and his partner a waiver and/or deferment of their past due $1.9 million "pre-payment." The "pre-payment" was not a payment. It was intended (I hope) to be a performance bond.

Mr. Geibel, Mr. Trump's partner, now states that "Since we know we are not going to be putting the building up right now it seems a shame to lock it up in that way." What, the property or the money? Tough luck, guys. Pay the money you agreed to pay.

If, you don't, the city should revoke the abatements on both towers, now. I doubt the loss of abatements will cause the evaporation of interest in more than 2,505 units. Their waiting list number is 3,000 and they are offering 455 units. Why the abatements?

Your article also states that the city's business administrator, Brian Reilly, said that that the "taxpayers won't be left holding the bag since other projects have generated more money than expected." There is no polite term that comes to mind for such mindless thinking. Should the property taxpayers not pay them, because they hear that the city has generated more revenue than it expected?

RICHARD E. MEYER JERSEY CITY

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Tax breaks don't help John Q. Public

Morgan's Corner - Earl Morgan

Friday, June 09, 2006

First of two parts.

F or decades now, millionaire real estate developers and Jersey City politicians have benefited from the legal graft of tax abatements.

With the connivance of administration after administration, the Jersey City City Council parceled out generous 20, 30, and even 40-year tax breaks, to fat-cat real estate operators - who reciprocate with generous campaign checks to swell the campaign war chests of these elected officials.

For decades Jersey City politicians have insisted this arrangement serves the best interest of the city, since the municipality gets to keep almost all the money or payments in lieu of taxes (PILOTs) the developers pay.

Unlike conventional taxes, abatement agreements allow developers to pay, for a stipulated number of years full taxes even if the rate increases. Very little of what they do pay is turned over to the county and nothing at all is apportioned to the school board.

But now we learn the county government is projecting a 9 percent hike in the taxes it wants to collect from Jersey City - the highest increase of any municipality in Hudson County. Why?

Well, the county tax rate is predicated on a formula that's based on the current property values of a given municipality. Jersey City is experiencing the biggest building boom on the east coast, thus the value of property here, has substantially increased. Ergo county taxes, computed under the aforementioned formula, are heading for the stratosphere.

However, many of the well-heeled souls living on some of the most expensive real estate are sheltered by their abatements and don't have to pony up the same increased property tax dollars everyone else does.

Indeed, as an attorney for the developers once explained to the Jersey City City Council, what his clients look for from abatements is stability. They know what they'll be paying in lieu of taxes, for the next 20 to 40 years.

When asked about Jersey City's increased tax bite on the county side, Hudson County Executive Tom DeGise blamed the formula. But let's remember in his previous political life as the president of Jersey City City Council, DeGise never met an abatement he couldn't vote for.

During a conversation I once had with Tom, he insisted the tax abatements are a good thing because the city gets to keep almost all the PILOT money for itself, instead of sharing it with the county and the schools.

But eventually, someone was going to pay, and now we know who that someone is - it's the majority of city property owners who have to find a way to exist without an abatement.

TOMORROW: It's time to pay the piper.

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It's time to stop tax abatements, but city loves 'em

Earl Morgan

Saturday, June 10, 2006

Second of two parts.

D ecade after decade, administration after administration, real estate developers in Jersey City have benefited from generous tax abatements - and in return, politicians have benefited from generous campaign checks.

The developers love these deals, not only because the amount paid in lieu of taxes (PILOTs) is generally lower than what they'd be assessed under conventional taxation, but also because - with a 20-, 30- or 40-year agreement in place - they're shielded from the uncertainty of the ever-rising tax bill.

And the city loves abatements because, unlike conventional taxes, the city gets to keep almost all the money: Very little is shared with the county, and nothing at all with the school board.

It seems that when handing out these tax breaks, mayors for three decades who pushed for abatements and City Council members who approved them never contemplated a rainy-day scenario when the city would run into financial difficulty. Well, that rainy day is here, at least for those of us who don't own tax-abated property.

At the same time the city is raising property taxes 18 percent, the county wants to increase taxes on Jersey City residents by 9 percent. But perhaps the biggest payout is yet to come: Gov. Jon Corzine is making serious noises about requiring school districts under state control - that includes Jersey City - to contribute more to their school board budgets. Jersey City's school taxes have remained flat for over a decade, with the state contributing any increase it deemed necessary.

Nowhere in the state Constitution does it require a municipality to give developers abatements. That's a political a decision made by the municipal governing body. And in fact, it's become something of a cliché for politicians to proclaim they're against abatements and vow to end or limit them.

In fact, Jersey City Mayor Jerramiah Healy promised "no more abatements for the Jersey City waterfront" - yet he wasn't in office three months before throwing his support behind yet another abatement for waterfront developer The LeFrak Organization.

Just weeks after that abatement, for the Shore Club development in Newport, the developer's attorney, the Rev. Francis Schiller, sponsored a campaign bash for the mayor at the Liberty House Restaurant in Liberty State Park.

But Healy is far from the only politician to have reversed himself on this issue.

In fact, some even say they have no choice but to give abatements. Since they've given them in the past, it wouldn't be fair to not give them in the future.

The concern for millionaires and billionaires is touching. But wouldn't it be nice if they evinced similar compassion for the senior citizens and working stiffs just trying to hold onto their homes in the face of increased water, utility, gas and property tax rates?

If this is progress, how much more of it can we stand?

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Donations make 30-year abatement deal a 'go'

Friday, April 28, 2006

By KEN THORBOURNE

JERSEY JOURNAL STAFF WRITER

What's the price tag for a tax abatement in Jersey City? Apparently, a little over $6,000 a year.

New York City-based Coalco, developers of the American Can Co. building on Dey Street, won a hard-fought 30-year tax abatement on the property Wednesday night after agreeing to pay a total of $185,000 to five entities in the city.

Until the developers came up with their pledge, the development had been at an impasse, with council members reluctant to go beyond the normal 20-year tax break barrier for the $100 million condo project that will offer no affordable housing and little open space.

But with the big bucks donations arranged, the 30-year tax abatement package passed 7-0-1, with Ward A Councilman Michael Sottolano abstaining and Ward F Councilwoman Viola Richardson absent for medical reasons.

According to City Council President Mariano Vega, the groups/entities to receive the money are: the Jersey City Museum ($65,000); the Pershing Field youth baseball leagues ($60,000); Grace Seniors at Grace Van Vorst Church ($25,000); Pavonia Park ($25,000); and Riverside Church ($10,000).

The project is located in Ward C, represented by Councilman Steve Lipski. Pavonia Park is also in Ward C, but is used primarily by residents in Ward B, represented by Mary Spinello, council members said.

Ward E Councilman Steve Fulop, who has previously voted against several abatements - and on Monday night against urged his fellow council members not to give away the store to this developer in particular - voted in favor of this one.

"The developers stepped up and gave some money and a good number of those projects are in Ward E," Fulop said.

Sottolano said he abstained because he took exception to the fact that the money was going to a handful of beneficiaries. Any money that can be squeezed out of a developer, no matter what ward the project is in, should be deposited in the city's general fund and used for broad tax relief, he said.

Council members acknowledged the need for a policy to govern future negotiations with developers.

The project's first two phases will consist of 511 market-rate units, 440 parking spaces, 7,000 square feet of open space, and 1,200 square feet of retail space, Coalco principal Ed Yorukoff said.

Coalco hopes to break ground this year and will take 18 months to complete Phase I, he said.

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Abatement deals for 3 projects get council OK

Why abate Trump deal?

Tax breaks don't help John Q. Public

It's time to stop tax abatements, but city loves 'em

Donations make 30-year abatement deal a 'go'

American Can deal up for vote

LeFrak gets abatement