The developer of the proposed Meridia Water’s Edge will pay $216,000 annually — roughly $2,000 per unit — to the city for 10 years in lieu of regular property taxes that normally would be split among the city, county and school district.
The City Council unanimously approved the Payment In Lieu Of Taxes (PILOT) at its meeting Dec. 12 [Ordinance 29-11], with no comment or discussion among members of the governing body. The lone public comment during the meeting came from Patrick Cassio, the local Republican chairman former mayor candidate, who bemoaned the fact that the PILOT avoids any payments to the school district. Union County will get some portion of the payment.
How much the property would have normally paid in property taxes, or how the $216,000 figure was arrived at, is unclear. Currently, the vacant land is assessed at $161,700 but generates no tax revenue since it’s owned by the Redevelopment Agency, which does not pay taxes. (Theoretically, the assessed value would generate a property tax bill of about $9,322, based on the current overall tax rate of 5.765 per $100 of assessed value).
Capodagli Property Company will acquire the three-quarter acre property (Block 305, Lot 5.04) from the Redevelopment Agency for $1 million, minus a credit for removing soil on the site left from the construction of the library a decade ago. The agency approved a redevelopment agreement at its meeting this month. Principal George Capodagli told the Redevelopment Agency this month that the cost of soil removal was about $160,000, which would make for a final sale price of about $840,000. City Administrator and Redevelopment Director Peter Pelissier initially anticipated the cost would be upward of $250,000.
The five-story, 108-unit Water’s Edge will have about 87 parking spaces on the ground floor and will use 21 parking spaces in the adjacent lot owned by the condominium association that operates the library building. The rental development will have 56 two-bedroom units and 52 one-bedroom units.
The Planning Board gave its approval of the plan last month, and the City Council amended the redevelopment plan to include the site. Only one council member objected at the time, based on concerns about not requiring some type of LEED-certified construction.
Water’s Edge will be the second project undertaken by Capodagli Property Company in Rahway. The Pompton Plains-based firm completed Meridia Grand, an 88-unit rental complex last year, which sold for $19 million several months ago. Capodagli also is in negotiations to acquire the former Savoy property, which has been stalled for many years. The firm is expected to present a concept plan for The Savoy site to the Redevelopment Agency early next year.