The City Council on Monday night will hold a public hearing and final approval for a financial agreement that includes a Payment In Lieu Of Taxes (PILOT) for the Rahway Residence for the Arts to pay the city at least $33,000 annually. Mayor Rick Proctor also is expected to deliver the State of the City address at the same meeting.
Ordinance 3-13 was introduced in January and would execute a financial agreement between the city and the Actors Fund Housing Development Corporation (AFHDC), which is to develop the affordable housing project at the former Elizabethtown Gas building.
The city would collect in the range of $33,000 to $38,000 based 6.2 percent of a projected $617,000 in gross rents, according to Redevelopment Director Peter Pelissier. The percentage, still being negotiated with the Redevelopment Agency, was requested by the developer, he said. The ordinance calls for a PILOT of up to 20 percent of annual gross revenues for the length of the Redevelopment Agency’s mortgage on the project. Here’s a quick little spreadsheet I threw together that estimates gross revenues based on the original 60-unit proposal and their median rents, with varying PILOT percentages, up to 20 percent.
Based on an assessment of $496,600, the Elizabethtown Gas property currently pays about $30,000 annually in overall property taxes, which includes county, municipal and school taxes, but a PILOT would go directly into to municipal coffers.
The affordable housing project as proposed would add several structures behind the existing two-story, 6,500-square-foot building, which conceivably would increase the assessed value, however, AFHDC is a nonprofit and would not be required to pay property taxes if it or the Redevelopment Agency took ownership of the property. The Redevelopment Agency is negotiating the purchase of the property from AGL Resources, the parent company of Elizabethtown Gas.
The AFHDC has proposed a concept plan of 69 units of one-, two- and three-bedroom units, incorporating the former Elizabethtown Gas Company property at 219 Central Ave. A separate ordinance (O-2-13) would overlay zoning requirements, including up to 75 units per acre (the site is about one acre).