Category Archives: City Council

City Council, tax appeals

Almost $1 million in PILOTs in 2012 budget

5 Comments

The $49-million municipal budget anticipates almost $1 million of revenue from various PILOT (Payment In Lieu of Taxes) agreements, including the first from one of the Park Square properties.

The total $961,000 in PILOT revenue is up from the $783,000 in the 2011 budget and breaks down as follows:

* Lower Essex St – Denholz Management (Rahway Plaza Apartments) – $366,000
* Landmark – $150,000
* Parking Authority (River Place) — $170,000
* Rosegate — $25,000
* Senior citizen housing — $250,000

Landmark, which broke ground on the Irving Street side of Park Square (2 Park Square) in 2006, appealed its assessment in Tax Court, getting it reduced from $6.05 million to $4.077 million.
The Main Street side (1 Park Square) is assessed at $8.965 million.

The PILOT agreement had the developer paying taxes on the assessed value of the parcels as they previously existed. Landmark will begin paying 20 percent of its assessment this year, which will rise 20 percent each year until it reaches 100 percent (which would be 2016).

River Place was constructed on property owned by the Parking Authority, which receives an annual payment from the development’s owner and splits it roughly in half with the city.

The city budget also anticipates $660,000 in revenue from red light camera fines. About $1 million was realized in the Transitional Year budget, which covered the six months of July-December 2011.

The amount to be raised by taxes in the budget is $33.455 million. The proposed municipal tax rate for 2012 is 2.287 (per $100 of assessed value), so the average assessed home ($133,000) would see municipal taxes of $3,042, compared with $3,046 estimated last year. (Remember, municipal taxes make up only a portion of your overall property tax bill; the others being schools and county). Presented to City Council by the administration in February, the municipal budget will be up for a public hearing and vote at the March 12 meeting.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council, Commercial, Downtown, Polls

Poll results: Which grocery store do you want?

12 Comments

The phenomenon that is Trader Joe’s jumped out to a strong, early lead in our latest poll and held steady for weeks at the 60 percent mark until voting closed last night. It was really a race for second place from the start:

Continue reading Poll results: Which grocery store do you want? →

City Council, tax appeals, taxes

Another look at Merck’s tax appeal settlement

5 Comments
The city’s tax appeal settlement with Merck & Co. added approximately $400 to the average home over three years, according to my estimate. Merck & Co’s tax appeal settlement that was approved a year ago cut the property tax bill for the pharmaceutical giant by at least $4.5 million over three years, reducing its overall tax assessment in Rahway by $82 million, or more than 26 percent.

The appeal affected the tax years 2010-2012 and my estimate includes some assumptions based on 2011 tax rates for 2012. The biggest hit looks like 2011 (see the end of this post). My estimate doesn’t include some other costs the city might have incurred, such as appraisals, litigation and borrowing, only an attempt to quantify how much the new assessments affected the average home.

Overall, the city’s valuation dipped from $1.549 billion to $1.486 billion in 2011 and $1.467 billion in 2012 as a result of the settlement, according to the letter sent to residents last year, explaining the settlement.

As part of the settlement, Merck withdrew its appeal in 2009 and received a cash refund of overpayment of taxes that year of $1.6 million. All told, that’s at least $4.5 million, based on 2011 tax rates, that had to be made up somewhere on the tax rolls.
Some explanation of how I arrived at this estimate: The average home in Rahway is assessed at $133,000. Every $13.30 in municipal taxes on the average home generates about $149,000 in tax revenue. Feel free to check my work in this Excel file; the key figures also are listed below (tax rates can be found on the city’s website). For 2012, I used the 2011 tax rate since the county and schools have not set their tax rate, while the municipal tax rate has only just been proposed.

Merck’s overall assessment was reduced from $312,368,300 to:
– $280,878,500 for 2010 (-$31,489,800)
– $249,699,700 for 2011 (-$31,178,800)

– $230,000,000 for 2012 (-$19,699,700)

Merck’s property tax bill shrank approximately:
– $1,614,797 in 2010 [$144 for average home]
– $1,797,458 in 2011 [$161 for average home]
– $1,135,688 in 2012 [$101 for average home]

_uacct = “UA-2976232-1”;
urchinTracker();

City Council, taxes

Council introduces municipal budget

2 Comments

Municipal taxes are expected to eclipse $3,000 for the average assessed home ($133,000) this year, according to the $49-million budget introduced by City Council on Monday night. The municipal budget makes up about 38 percent of the overall tax bill, which also is made up of the school and county taxes.

The municipal tax levy — the amount to be raised by taxes — is proposed at $33.455 million, down slightly from the $34.118 million estimated for all of 2011, which was split between the second half of the 2011 fiscal year budget and a 2011 transitional year budget. The proposed municipal tax rate for 2012 is 2.287 (per $100 of assessed value), so the average assessed home ($133,000) would see municipal taxes of $3,042, compared with $3,046 estimated last year.

The city’s net valuation dropped from $1.489 billion to $1.462 billion, a decline of $27 million or almost 2 percent, due primarily to Merck’s tax appeal. City Financial Officer Frank Ruggiero told council members that $1.5 million of a $3-million settlement with the Union County Utilities Authority will be used as revenue this year, offsetting the loss of about $1 million in tax revenue this year due to the multi-year tax appeal settlement with Merck. He said the city also plans to become more aggressive in its debt reduction in the 2012 budget.

The City Council introduced the 2012 municipal budget by a 7-0 vote, with two members absent. Final adoption and a public hearing is scheduled for the March 12 regular meeting.

The City Council in November approved a transitional year budget covering July-December 2011, as it moved from a fiscal year budget (July to June) to a calendar year budget this year. Municipal taxes were about $1,522 for the average home for the six-month transitional year budget, and about $2,416 in the last fiscal year budget.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council

Bond ordinance increased for building removal

5 Comments

The City Council this month unanimously approved an amendment increasing a bond ordinance by $85,000 for work related to the demolition of an East Cherry Street building last year.

At its Jan. 9 meeting, the governing body amended an ordinance from $200,000 to $285,000 (an increase of 42 percent) for work that included demolition of 65 E. Cherry St., which occurred in May (after the facade collapsed last February) and was paid for via a $75,000 emergency resolution in June). The ordinance also included funds for improvements to Lot B on Main Street.

City Administrator and Redevelopment Director Peter Pelissier said the increase was needed for additional engineering costs to shore up the sides of the neighboring buildings, and ensure that when the building was removed, the adjoining basements were not affected. The city has placed liens on the work for the property, he added.

Developer Dornoch Holdings purchased the property for $65,000 from the Parking Authority and more than four years ago had proposed renovations to the Planning Board but those never went anywhere.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council

Council rejects pair of mayoral re-appointments

2 Comments

The City Council tonight unanimously rejected two re-appointments proposed by Mayor Rick Proctor amid several others that were approved, while also dismissing a local “pay-to-play” ordinance.

Rejected were the re-appointments of George Wagenhoffer, a Republican, to a three-year term on the Alcohol Beverage Control Board and Josh Donovan to a four-year term on the Zoning Board of Adjustment. However, two other re-appointments to the Zoning Board — William Hering (term through 2015) and Paula Braxton (alternate, 2013) — were approved. In a separate resolution, Ray Lopez was approved to fill a vacancy on the Zoning Board through 2012.

City Council members had no comment, not even any comments unrelated to business on the agenda, which they sometimes offer in their end-of-meeting reports. Council President Samson Steinman, who pulled the affected resolutions from the consent agenda, declined to comment on the failed re-appointments following Monday night’s meeting. (The consent agenda allows the governing body to combine routine resolutions into one vote but a council member can pull them out to be voted on separately, as was the case with several tonight).

Among the appointments that gained approval were two to the Parking Authority (James Walker, 2015, and Eric Kabel, 2016), one to the Planning Board (City Councilman Sal Mione, through 2012), and another to the Redevelopment Agency (Matt Dobrowolski, unexpired term through 2014).

When Ordinance O-3-12 (“Pay-to-Play”) came up on the agenda, 3rd Ward Councilman Jerry Scaturo and 4th Ward Councilman David Brown both pulled their sponsorship of the measure, which was set at last week’s pre-meeting conference. Neither addressed the move publicly. A copy of the four-page ordinance can be found in this Google Document file. The mayor had mentioned pay-to-play in his State of the City message last week (another Google Doc).

The mayor and City Council, all Democrats, have been at odds over the last half year or so, over a number of items, including reducing his salary and other staff appointments in the mayor’s office.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council, taxes

State of the City 2012

3 Comments

In what could be called dueling State of the City addresses, Mayor Rick Proctor and City Council President Samson Steinman both delivered remarks at tonight’s annual reorganization meeting, assessing the city’s position as it enters a new year.

Continue reading State of the City 2012 →

City Council, City Hall Plaza, library, taxes

Meridia PILOT, redevelopment agreement OK’d

6 Comments

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.

_uacct = “UA-2976232-1”;
urchinTracker();