Lost amid the news of Mayor Rick Proctor’s resignation last week was the fact that the City Council approved a 15-year Payment In Lieu Of Taxes (PILOT) and financial agreement for the Metro Rahway project.
Ordinance 35-13 was approved by a 7-0 vote at the Sept. 9 meeting, with council members Michael Cox and Nancy Saliga absent.
The ordinance calls for an annual service charge of $265,000 for Metro Rahway, based on 10 percent of annual gross revenue, which is estimated to be $2.6 million by the time it’s fully occupied in year two. A 2-percent escalator begins in year three. The service charge is about 30 percent less than what property taxes might be on the project once it’s built out.
Based on other similar, recent projects, Metro Rahway likely would pay about $430,000 annually in property taxes, at least according to my estimates. The properties acquired for the project currently pay about $77,750 in property taxes on an assessment of $1.285 million. Once completed, Metro Rahway probably would be assessed at closer to $7 million
Construction has been under way for several weeks on the 116-unit project at Campbell and West Cherry streets. Of the 116 units, 62 are planned as two-bedrooms and 52 as one-bedrooms.