The Times had the following story on their webiste tonight (Thursday) and promised a print version in Friday's paper.
City condo development awaits council nod
Posted by The Times of Trenton August 23, 2007 9:57PM
Categories: Development, News
TRENTON -- Builder K. Hovnanian is just a vote away from receiving a tax exemption that would enable it to pay the city a fixed amount of taxes on the former Champale brewery site and other properties, where a condo development is planned, rather than full taxes for 10 years.
The city council recently introduced an ordinance that would grant Hovnanian a 10-year PILOT (payment in lieu of taxes) for the Villages at Delaware Run, an 84-unit project bordered by Lamberton, Cliff, Lalor and Centre streets.
Under the PILOT, Hovnanian would pay the city 2 percent of the total project cost annually for 10 years instead of full property taxes. That translates into 2 percent of the sale price of an individual unit and 2 percent of the value of the development's common area. The payments would start when a certificate of occupancy is issued.
The project is expected to cost a little more than $20 million.
Dennis Gonzalez, city assistant business administrator, said he expects the city to received an estimated $400,000 a year in payment in lieu of taxes. That is 20 times the amount the city now receives in taxes for the properties acquired by the city through eminent domain, and the properties acquired privately by Hovnanian, Gonzalez said.
See Friday's Times for more on this story.
Contributed by Eva Loayza
Now a couple of things come to mind:
First, is Dennis Gonzalez being the spokesman for the city on this? As reported in the article, Dennis' current title is Assistant Business Administrator. My question is, why is an "assistant" speaking on behalf of the administration regarding this tax abatement? Why not the Business Administrator or the Director of Housing and Economic Development?
Second, why is the tax abatement or Payment In Lieu Of Taxes (PILOT) being proposed.
It is understood that these PILOT's are offered to developers to sweeten the deal and make it attractive to do their work in the city. Similarly, homeowners who make substantial improvements to their properties are entitled (and encouraged) to apply for a five year tax abatement.
What is interesting about the K. Hovnanian proposal is the sentence in the article that reads:
"The payments would start when a certificate of occupancy is issued."
So if a Certificate of Occupancy (CO) is not issued, does that mean that no taxes or PILOTS are due? And if that is the case, what about the Nexus Development in Mill Hill where we live? My understanding is that, after two years, the City has not issued CO's to at least some of the owners of the property. So is Nexus or the Sussman family that controls the company making the appropriate tax or PILOT payments?
I'd like a direct and swift response to that question.