The average property within an expanded, citywide Special Improvement District (SID) would pay about $1,437 in taxes to the SID, but the average among industrial properties and apartments would be nearly twice as high as commercial properties.
Estimates are based on my own calculations using publicly available property tax assessment information, including the list of sites in Ordinance 42-14, which expanded the SID when City Council passed it in December, and tax rates anticipated by city officials — all rolled into a spreadsheet over the last few weeks (in between some recent business trips and classes, so it took some time). Properties that were in the original SID are in italics.
The numbers seem a little off as my spreadsheet generates $169,955 in SID taxes for 2014 by the 138 properties in the original SID; they typically generate $130,000 annually. That could have to do with using the 2014 tax rate but 2015 assessments; the tax rate won’t be determined until the Rahway Arts District board sets the budget but city officials anticipate the expanded SID will raise $600,000 to $700,000; my calculations generate about $750,000.
Among properties assessed at less than $1 million (which tend to be those downtown), the average SID tax would be about $981 per year, according to City Administrator Cherron Rountree.
The 532 properties would have an estimated total assessment of approximately $251 million and pay roughly $750,000 in SID taxes, based on 2015 assessments and an anticipated SID tax rate of $0.030 (as opposed to the current $0.3501). The average assessment among those properties is $481,020, which would generate an average of about $1,437 toward the SID and an average overall property tax bill of about $29,843.
By property class, assessments and SID taxes would be approximately as follows:
Commercial (4A): The largest number of properties at 360, they would have a total assessment of about $131 million and would pay SID taxes of about $394,000. The average assessment would be $364,824 and the SID tax would average about $1,437 per property.
The highest commercial property would be the new Home2Suites by Hilton on East Milton Avenue, which was not previously included in the downtown SID. Its $5.24 million assessment would generate an estimated SID tax bill of $15,750 (and an overall bill of almost $326,000).
Industrial (4B): 85 properties assessed at more than $60 million would pay SID taxes of $180,695. This category has the highest average assessment ($708,608) and with it the largest average bill, at $2,126 for SID, which makes sense because these tend to be larger properties, both land and improvements/buildings.
The single highest-assessed parcel is Rahway Industrial Sites on New Brunswick Avenue, assessed at $4.063 million; a SID tax would run $12,191. In some instances, one owner owns multiple properties but I haven’t examined that closely yet. For example, Clark-based Alard Realty Associates owns at least five industrial properties that collectively are assessed at $5.434 million, which would mean $16,000 in new SID taxes.
Apartment/co-operative (4C): 76 properties make up $51 million of the overall SID assessment and $151,590 in would-be SID taxes. The average assessment runs $677,047, translating to an average SID tax of $1,995. But those estimates don’t include Meridia Water’s Edge, which would be the largest assessment at $8 million, and with it a $24,200 SID tax, but it’s classified as 15F (exempt) and it’s still unclear whether properties that were granted Payment In Lieu Of Taxes (PILOT) will be subject to the citywide SID. Excluding Water’s Edge, Park Terrace, the 55-and-older building on School Street, would be the highest assessed 4C property at $6.684 million, adding a SID tax bill of more than $20,000.
A group of business owners have mounted a lawsuit over the expanded SID.