Over the course of two hours at the City Council meeting, city Tax Assessor Joe Nichols, city Law Director John Coffey II and city Business Administrator Joe DeMarco responded to questions from seven residents.
BAYONNE -- After a spirited debate between city officials and residents at last Wednesday's City Council meeting, the council voted on tax abatements for two different projects, rejecting one and approving the other.
The council voted 3-2 to reject a 25-year tax abatement proposed for a six-story, 90-unit apartment building planned for 230-250 Ave. E near the 22nd Street Light Rail station. The council then voted 4-1 to approve a 30-year tax abatement proposed for a four-story, 150-unit apartment building planned for Broadway between 19th and 21st streets.
The developer, Ingerman Development Company LLC, said the proposed development would consist of luxury, market-rate apartments with a mix of studio, one-bedroom and two-bedroom units built on several properties the developer is in the process of acquiring. A public walkway would be built to connect Broadway with the building's parking garage, Bayonne Business Administrator Joe DeMarco said.
Tax abatements, which are meant to incentivize development that wouldn't occur otherwise, provide a financial win-win for a developer and a municipality while mostly or completely leaving out the county and school district from getting a cut of payments in lieu of taxes (PILOTs).
Over the course of two hours at the City Council meeting, city Tax Assessor Joe Nichols, city Law Director John Coffey II and DeMarco responded to questions from seven residents.
City resident Ed Szawiel criticized officials, saying they should work harder to find developers who are willing to do projects without tax abatements.
"My recommendation is no one should be sleeping until they pound the streets, get other developers in, show them the opportunity and say 'What can you do here?'" he said.
Coffey responded by saying that Bayonne is competing with other municipalities that are willing to give developers abatements, and that "no one is coming to beat down Bayonne's door to do developments."
He also said the city has repeatedly borrowed money to fill budget holes from 1994 to 2014, and that it is unreasonable to expect the current administration to be able to fix an inherited $20 million structural deficit right away.
Meanwhile, city resident Jill Pustorino raised concerns about schools being shortchanged by tax abatements, since tax-abated developments won't be paying any school tax but may nevertheless bring in additional children.
Nichols explained that, in that case, the difference would be covered by taxpayers.
"The question is, though: Does the amount of money that you're taking in from a PILOT on the municipal side make up for what you're losing on the school side?" he asked. "I'll tell you this: if you do not try this, your municipal taxes will absolutely go up more than it would that incremental amount for the schools."
Nichols went on to say that even if a tax-abated development added children to the schools, and school taxes went up and municipal taxes went down by an equal degree (canceling each other out for the taxpayer's bottom line), there's still the benefit of having a project get built instead of letting land sit vacant.
"We'll have the infrastructure, we'll have the people...you'll get the jobs...you'll get the cash flow on business," he said.
When it came time for voting, Third Ward Councilman Gary La Pelusa Sr. said he didn't like how tax abatements shifted the county and school tax burden onto taxpayers.
Asked later whether that shift could be worth it, given that taxpayers' municipal tax burden would decrease at the same time, La Pelusa said he doesn't think so, adding that "ultimately, people are going to wind up paying extra."
La Pelusa also said at the meeting that "nobody mentions" how much developers profit from their developments, and that he is "offended" by taxpayers needing to pay for developers to come into the city.
He told The Jersey Journal the city could be "more aggressive" in marketing itself to developers.
First Ward Councilman Tommy Cotter and Councilman-at-large Juan Perez joined La Pelusa in voting "no" for a 25-year abatement for 230-250 Ave. E, but for different reasons, saying the project doesn't provide sufficient parking.
With only Council President Sharon Nadrowski and Second Ward Councilman Sal Gullace supporting the proposal, the abatement failed to pass.
Meanwhile, La Pelusa was the only one who opposed the other tax abatement -- a 30-year abatement for a 150-unit apartment building planned for Broadway between 19th and 21st streets -- and it passed.
Jonathan Lin may be reached at jlin@jjournal.com. Follow him on Twitter @jlin_jj. Find The Jersey Journal on Facebook.