Condo Tax Break Sidelined
The inducement of reduced taxes to attract buyers was offered to ward off possible conversion to rentals. But since the ordinance was passed July 20 on first reading, residents, bloggers and council members have raised many concerns about the proposal.
On Monday, council members Adrian Mapp, Cory Storch and Annie McWilliams declined to move the item to the Aug. 17 agenda. Council members William Reid, Rashid Burney and Linda Carter approved, but a consensus of four was needed. Councilman Elliott Simmons was absent. The outcome brought applause from residents attending the meeting.
The consensus tally took place only after a very lengthy discussion on points such as whether the tax abatement would apply only to condo owners for the full five-year term of the tax break, or whether it could be carried over to new owners on shorter terms.
The issue of ultimate tax revenue benefits to the city was another subject of debate. Tax Assessor Tracy Bennett offered figures for both rentals and owner-occupied condo units.
Bennett said condos would produce $5,432 in annual taxes per unit, but rentals would only produce $3,000 per unit.
It was unclear why rental returns were even mentioned, if as some officials stated, the only viable option is condo sales. The condo development also contains a senior center and veterans center on the ground floor for city use and is the only large development nearing completion. Its success is necessary, officials say, to attract other developers to Plainfield.
But council members questioned the pricing of the condos and called for an outside assessment. If the price was not right, members argued, offering tax abatements might not make any difference.
Other questions included when exactly tax abatements kicked in, whether at the time of sale or upon issuance of a certificate of occupancy.
Corporation Counsel Dan Williamson and Councilman William Reid both stressed the two-part process involved, meaning the ordinance under question only opened the way to negotiations whose details would come back to the governing body for another vote. But uneasiness over the unanswered questions Monday apparently killed the initial approval.
Meanwhile, Mapp is holding a town meeting Thursday on the issue. Click here for details.
Williamson asked Mapp to open the meeting to “the other side” to “bring balance” to the forum.
Mapp asked why other homeowners could not get a similar tax break, but Williamson said the five-year tax abatement law pertains only to developers. Dubbed “The Monarch,” the condo/senior center project was approved in 2007, but developer Glen Fishman missed three stated deadlines for completion. The condos finally went on sale just as the housing market collapsed. Allowing buyers to pay only 40 percent of taxes for five years was supposed to boost sales.