Will Tax Abatement Plan Resurface?
Although there was not a consensus on Aug. 10 to move a tax abatement proposal forward for the condo buyers at 400 East Front Street, it is expected that the measure will reappear Monday for a vote. The regular City Council meeting will be held at 8 p.m. in Municipal Court, 325 Watchung Ave.
"The Monarch," as the senior center/condo complex is known, is the only major project under construction in the city and the administration says its success is important to attract or encourage other development. But in the current housing market, the project needs inducements to buyers, and officials want a five-year, 40 percent tax abatement that has become controversial since its announcement last month. An ordinance paving the way for negotiations with P&F Management LLC received City Council approval on first reading on July 20.
Since then, a public outcry and second thoughts by some members of the governing body have resulted in a standoff between the administration and the council. Some argue that the developer has already sweetened the deal for buyers by lowering the price of the condos, and first-time buyers also can apply for an $8,000 tax credit if they act before Nov. 30. Others call it unfair to single out new condo buyers for an unprecedented tax break while many longtime homeowners are suffering financial distress.
Unless the developer gets a tax break, administration officials say, the project could turn into rentals, an undesirable prospect that would lessen the tax return. The senior center and veterans' center on the ground floor would be tax-exempt and the only revenues would come from the 63 two-bedroom condos on three upper floors. Tax Assessor Tracy Bennett gave figures on Aug. 10 that placed taxes at $5,432 per unit if sold, but only $3,000 if rented. The abatement would lower taxes paid by owners.
Council President Rashid Burney has said he wants the project to succeed, but asked for an independent appraisal of the condos to determine whether they were priced properly.
"If not, what is a tax abatement going to do for us?" he asked.
Councilman Adrian Mapp, who opposes the proposed tax abatement, held a town meeting Thursday to gather opinions of residents on the matter. A large turnout is expected Monday, when residents will be able to speak before any council action on the proposal.