Assessing the Monarch Situation
Between now and the Aug. 10 agenda session where Tax Assessor Tracy Bennett may address the City Council on tax abatements, we average citizens can do some homework.
Over the years, I learned that tax assessments have two parts, the land and the improvements, meaning the buildings. Block 324, Lot 10.01 is the site of the senior center/condo complex for which P&F Management LLC is now seeking a five-year tax abatement where condo buyers will pay only 40 percent of property taxes. The City Council approved the agreement on first reading Monday. Second reading and final passage may occur on Aug. 17.
First of all, the condos have already been established as separate tax entities. The same thing happened several years ago when the Meadowbrook Village garden apartments were turned into condos. Each one got its own block and lot number for taxing purposes.
So now when one looks up Dornoch Plainfield LLC (the former name for the senior center/condo complex owner at 400 East Front Street), one can see that taxes are currently being paid only on the land. Each portion has been assessed at $1,900 and the developer paid $114 in taxes on each of 63 lots for a total of $7,182.
Bennett said Tuesday she has set an assessment of $69,000 per condo, so the total assessment for land and improvements per condo will be $70,900. The last stated tax rate per $100 was $3.59 (or $3.50, depending whether you look at the resolution or the certification), so let's say the municipal tax rate will be either $2,481.50 or $2,545.31.
If the 40 percent tax abatement goes through, owners would then pay either $1,018.12 or $992.60 in municipal taxes.
I would like to invoke the phenomenon known as crowdsourcing for help on this one. Anybody with expertise, please confirm or dispute my numbers by e-mailing bernice.paglia"at" gmail.com. Journalists may have high verbal skills, but are notorious for lack of math expertise. Your help is welcomed.
--Bernice Paglia
Over the years, I learned that tax assessments have two parts, the land and the improvements, meaning the buildings. Block 324, Lot 10.01 is the site of the senior center/condo complex for which P&F Management LLC is now seeking a five-year tax abatement where condo buyers will pay only 40 percent of property taxes. The City Council approved the agreement on first reading Monday. Second reading and final passage may occur on Aug. 17.
First of all, the condos have already been established as separate tax entities. The same thing happened several years ago when the Meadowbrook Village garden apartments were turned into condos. Each one got its own block and lot number for taxing purposes.
So now when one looks up Dornoch Plainfield LLC (the former name for the senior center/condo complex owner at 400 East Front Street), one can see that taxes are currently being paid only on the land. Each portion has been assessed at $1,900 and the developer paid $114 in taxes on each of 63 lots for a total of $7,182.
Bennett said Tuesday she has set an assessment of $69,000 per condo, so the total assessment for land and improvements per condo will be $70,900. The last stated tax rate per $100 was $3.59 (or $3.50, depending whether you look at the resolution or the certification), so let's say the municipal tax rate will be either $2,481.50 or $2,545.31.
If the 40 percent tax abatement goes through, owners would then pay either $1,018.12 or $992.60 in municipal taxes.
I would like to invoke the phenomenon known as crowdsourcing for help on this one. Anybody with expertise, please confirm or dispute my numbers by e-mailing bernice.paglia"at" gmail.com. Journalists may have high verbal skills, but are notorious for lack of math expertise. Your help is welcomed.
--Bernice Paglia
posted by Bernice at 7:08 PM
17 Comments:
It looks like either way the tax revenue from the 63 units will be well under the $400,000 Jerry Green was quoted as promising a few years ago.
Without the abatement at a rate of approx. $2,500 per condo, the city stands to bring in under $160,000 per year. With the abatement, at approx $1,000 per condo, revenue falls to $63,000 per year.
What happened to the anticipated revenue?
Do you know how each counciler individually voted? Did any of them vote against the abatement proposal?
If it's a 40% abatement, then I would think that means that the homeowner would pay 60%, so of the $2,500 they would pay $1,500.
So if there are about 60 available condos, that's a potential abatement of about 60K per year, or a potential total of 300K worth of abatements. The potential revenue is about $90K, or $450K for the 5 years.
So the city is proposing to subsidize the developer 300K to make it easier to sell, and profit from the condo sales.
In return, the city hopes that the apartments will not turn into rentals, or worse, that the developer will not apply for Section 8 status.
Is that a fair summary?
Frankly, these luxury condos are a "steal" at the price offered, so it seems unrealistic that purchasers would need an abatement at all. Who said they would need an abatement? Why not have the developer lower the price more? You know what happens when people get used to paying one price for taxes, they all of a sudden get hit with higher taxes like a "balloon" payment and are then in trouble. If they can't afford the place, they should go somewhere else to buy. That's the way it goes. I know people who bought in Stillman Gardens and Meadowbrook Village and they aren't getting an abatement. There's at least a couple of units at Meadowbrook right now, and those folks deserve the same break for buying in Plainfield as people who might want to purchase one of the Monarch condos. What about my break? I have lived in Plainfield for a long time and I don't get a tax break. This is inherently unfair, and I can see the city opening itself to several lawsuits based on this harebrained scheme. The only way that this type of proposal would be fair would be to give EVERY homeowner and purchaser in Plainfield the SAME break. But what would happen to our city then? This kind of unfair incentive will lead to a lot of people not paying their taxes. This developer talked a lot of pie in the sky. Let him work. That's the cost of doing business. A lot of us are struggling to pay our taxes, and to give newcomers this kind of break is a slap in the face to the rest of us. I think the developer has to eat this. There's no reason that the real estate company can't just work that much harder. When their exclusive listing agreement expires, why not give the option of the condo listings to all the realtors in Plainfield, creating competition? Then, they would all work hard to get the condos sold. As it is now, there is no reason for all the other realty companies in town to steer their clients to these condos. I am offended that Burney would say something so scary so soon. He seems to have no faith in Plainfield. What does this do to all the other residential redevelopment projects the mayor has been trying to float over the past few years?
I question the new assessment of the condo/land -- only $70,000?? If I were a Plainfield Councilperson I would want a thorough explanation of why so low -- what is the basis for this figure?? They are selling for more than double that.
In a city where I used to live the sales price became your assesment value although I hear this is not legal in NJ.
I double-checked with Dan Williamson after the council meeting and he confirmed that the term "40 percent tax abatement" did in fact mean the condo owner will pay only 40 percent of taxes.
Do you know how each council member voted?
If that is the case the city should only provide 40% of the services.
Bernice,
Who said these were luxury condos? Was it the assemblyman and the mayor? Fact: They are average construction condos at best. Further, the density is more reflective of average to low-end condo developments. In short, this project is more like an apartment complex than a luxury condo project. If this proposal is approved by our see-no-evil council, the citizens of Plainfield should march in the streets. Better yet, a good old "boston tea party" would be appropriate.
FYI, the vote on first reading of the ordinance was unanimous, with Mapp hesitating before voting "a reluctant yes." The council will have to vote again on second reading in August before final passage.
THE VOTE WAS 7-0. EVERYONE VOTED FOR IT.
NO ONE HAS ASKED WHAT ARE THE ALTERNATIVE TO THIS? WHAT WILL HAPPEN IF THIS IS NOT VOTED FOR? WHAT WILL THE FIRST CONDO PROJECT IN PLAINFIELD FAILING MISERABLY MEAN FOR PLAINFIELD? WHAT WILL IT MEAN FOR FUTURE DEVELOPMENT IN PLAINFIELD?
UNLESS YOU CAN ANSWER THESE QUESTIONS PROPERLY, YOU DO NOT KNOW WHAT YOU ARE TALKING ABOUT. BUT THEN AGAIN IN PLAINFIELD, WHEN DOES THAT STOP ANYONE FROM OPENING THIER MOUTH? IT IS NO WONDER PLAINFIELD IS THE DUMP IT IS.
The previous all caps commenter isn't making any sense. So because this is allegedly the "first" condo project in Plainfield (there are several other condos in Plfd, by the way), we should let the potential newcomers get tax breaks that the rest of us cannot have? There is NO REASON to give these breaks. A better way to do this would be to have the developer offer to help pay closing costs. Also, in terms of negotiation, when I bought my house, I negotiated the price and paid $9,000 less for it in the end. There's no reason a savvy condo buyer can't negotiate. Why would the city give a tax break--Plainfield is hurting for tax base already! I will submit that this will be the end of the current city council, starting with Burney, who has made one bad decision after another and Reid. Both will probably be running for reelection next year. This is part of their record, giving away our tax base by fear-mongering. Thanks guys.
Investment implies risk. The condos will sell, maybe more slowly, but they will sell. It takes time. What is the average amount of time for a home/condo to sell in Plainfield? There are scores of homes on the market. Does the city council suggest that every homeseller in town tell the prospective buyers that they will only have to pay 40% of their taxes? This poorly thought out proposal is just another instance of Plainfield letting developers run the city.
Why is the administration and city council already bending over backwards for this developer? Because of the threat of rentals? The city council has the power to prevent that from happening. Funny that this comes a couple of days after Council mcWilliams talks about "branding" the city. Whats the brand if this insult to Plainfield's hardworking, overtaxed residents goes through?
Lets face it, Muhlenberg's closing, Connolly,PMUA,poor schools,Plainfield's decaying infrastructure and the list could go on. And come November the Green team will be out with the payola for voters and low and behold the same bunch of incompetent politicians will remain in control. Machine politics at its finest. It bothers me why the residents of Plainfield don't care, its obivious by the way they vote and why certain residents up in the hills just don't care. I moved to Plainfield about tweleve years ago and saw good things coming with Al McWilliams, now I see all the things he tried to do quickly dismantled by the Robinson-Briggs administration. Yet come June people voted her again.
Now the residents take it on the chin again with these tax abatements. Gee lets vote again in November for another four years of the Robinson-Briggs administration God knows how much it will cost us.
bottom line is hindsight is 20/20. These must be sold. They cannot become rentals and they cannot become section 8 eligible.
to John Vignoe,
The condos will sell eventually. They might not sell as quickly as the owner (who will make the profit) and the realtors (who will earn the commissions) want them to sell, but that's the reality of working in real estate. If they are marketed well, they will sell. The real estate company is well established and the owners live in town, so they can certainly market and sell well-priced, affordable condos in their own hometown. There is no reason to have to do anything more than possibly negotiate a slightly lower selling price and make sure that the potential buyers are knowledgeable about all the tax credits available to them from the federal government. Maybe the developer can offer to help with closing costs. A lot of sellers do that as an extra incentive for purchasers.
Start the next round of FBI real estate / public official corruption in Plainfield. At least 40 will be arrested in that town alone
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