Condo Tax Break Sidelined
City Council members split 3-3 Monday on whether to move forward a controversial ordinance on a 40 percent tax abatement proposal for a 63-condo development at 400 East Front Street. The lack of consensus meant the measure will not be up for a final vote at the Aug. 17 regular meeting as the administration had hoped.
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.
--Bernice Paglia
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.
--Bernice Paglia
posted by Bernice at 8:32 AM
6 Comments:
I find the quoted statement by Williamson asking Mr. Mapp to open the meeting to “the other side” to “bring balance” to the forum really offensive, and can now see how the administration views the people of Plainfield as adversaries rather than partners, the mayor's, Green's, and Councilman Burney's constantly bloviating doubletalk notwithstanding. Doesn't he see how ridiculous he sounds? They do these deals without giving us the background, and then they want us to approve. Why is the administration taking a speculative developer's side on this over the strenuous objection of the residents? There should be one "side" on this issue--the PEOPLE'S SIDE. They have tipped their hand as to who they favor: Mr. Fishman and all his LLCs (he's got at least 10 or 12) that limit his liability. If you google Fishman or his various company names and look at his other developments in other cities, you will see that this guy is batting zero. I think he needs this ordinance to go through to get leverage for financing one of his other projects in one of the other municipalities. His whole scheme looks like a dangerous house of cards on the backs of Plainfield.
Also, about the 3rd ward meeting, after talking to Mr. Mapp about it last week, he explained that it is ONLY for the residents. He likened it to a "listening tour," so Mr. Williamson is out of gas. It is NOT about the administration or the council, Mr. Mapp said. Not even the council will speak. They will only listen. Only the people will speak. The administration all of a sudden wants to present a case to the people? They could have had their own hearing on this. They can still schedule their own hearings on all the other development projects before they do development deals and involve the people. This one, Mr. Mapp said, is about the people, the taxpayers and residents of Plainfield.
The administration needs to come to the table with more than the I think and I feel. There was no substantiation for why this should move forward.
I remind the council about Dudly House, which was supposed to be off the books by now, but is not.
The administration was asked to supply information for this issue to move forward. They did not, therefore, they do not deserve to have this issue moved forward.
Also, can someone explain two things-
1- why are we looking at returns 10 years out on a 5 year abatement plan?
2- how will this be a benefit to the taxpayers who have to supplement the taxes for this abatement? Will my taxes go down after 5 years becasue new taxes are being collected?
Bernice,
Yesterday, I asked the administration for specific information - before they had my vote. That I made specifically clear last night. That was an independent appraisal by an appraiser. Only with that can we have the information to make an accurate and informed decision.
I spoke out against moving to step two of this process until step one is complete.
When Councilwoman Carter (acting as Chairperson of the Committee) asked for a consensus (not a vote) the consensus taking stopped at Councilwoman McWilliams because it was moot at that point - without a majority agreement, attempting to continue to gain consensus is moot.
Thus she did not continue to take consensus on moving the agenda forward which included myself and herself.
My position was clear early on: Until we have the information I asked for I am not ready to move this forward.
That is not a "yes" vote.
Council President Rashid Burney is correct. As Councilwoman Linda carter went around the table, Councilman William Reid said "yes" to moving the ordinance to the Aug. 17 agenda and council members mapp, Storch and McWilliams said "no," at which point it was determined there was not a consensus in favor. Burney had earlier stated he wanted it to move forward but asked for more information from real estate professionals. I will be posting more from this meeting later.
Bernice,
How is an appraisal by a another pay-to-play factotum in order? Any finding, no matter how objective, begs the issue of the appropriateness of subsidizing this project when it is only one of many apartment complexes that are in financial difficulty becuse of current economic conditions and bad management practices. The alleged good does not outweigh the motivation behind this exercise: to bail out a developer whose project was ill timed and and poorly conceived.
Was there any information provided about why the phones and computers were down ??
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