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AN ORDINANCE AMENDING AND SUPPLEMENTING TITLE X, FINANCE AND TAXATION, CHAPTER 23, FIVE-YEAR TAX EXEMPTION AND ABATEMENT, BY ADDING DWELLINGS, MULTIPLE DWELLINGS, AND COMMERCIAL AND INDUSTRIAL PROJECTS, ESTABLISHING NON-APPLICABLE AREAS AND TO INCENTIVIZE DEVELOPMENT THROUGHOUT THE NEIGHBORHOODS OF THE CITY OF NEWARK.
Sponsors: Gonzalez/James
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WHEREAS, the Municipal Council of the City of Newark adopted “Title X, Finance And Taxation, Chapter 23, Five -Year Tax Exemption And Abatement, which has been amended from time to time (the “City Ordinance”); pursuant to N.J.S.A. 40A:23-1 et seq;” and
WHEREAS, the City of Newark (“City”) is seeking to incentivize and promote real estate development throughout the neighborhoods of the City; and
WHEREAS, this policy of neighborhood incentives for promoting economic development, real estate development, and job creation does not apply to the following areas: (1) the Newark Downtown District, (2) the Newark Liberty International Airport, and (3) the Port Newark (“Non-Applicable Areas”); and
WHEREAS, there is a need for new construction and significant rehabilitation of residential, commercial, and industrial real estate within the neighborhoods of the City, except the Non-Applicable Areas; and
WHEREAS, the City desires to amend the City Ordinance to include commercial and industrial projects in addition to promoting real estate development within the neighborhoods; and
WHEREAS, N.J.S.A. 40A:21-9 permits the City to provide for tax agreements for the exemption and abatement from taxation for the construction of commercial or industrial structures, or multiple dwellings.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
Section 1. Title X, Finance and Taxation, Chapter 23, Five-Year Tax Exemption and Abatement is hereby amended as follows (note: additions are shown in bold underlined and deletions are shown as strikethrough):
Section 2. 10:23-2. DEFINITIONS shall be amended and supplemented to add the following new definitions:
New Construction shall mean any construction or development of residential, commercial, or industrial building on vacant land, or the demolition of existing structures on real property and the construction or development of a new structure on the previously developed real property.
Non-Applicable Areas shall mean the Newark Downtown District, the area of and around the Newark Liberty International Airport, and the area in and around the Port of Newark.
(Ord. 6 S+FH, 2-2-94 § 10:10-2)
Section 3. 10:23-3. ELIGIBLE PROPERTY shall be amended and supplemented as follows:
Owner(s) of new residential structures, owner(s) of improved residential structures, or owner(s) of newly constructed or rehabilitated commercial structures that are located in the City of Newark are entitled to avail themselves of the opportunity to receive a five (5) year tax exemption and/or tax abatement as provided in this chapter when the qualifications are met as follows:
a. All real estate taxes must be current;
b. Written application to the Tax Assessor filed within thirty (30) days, including Saturdays and Sundays following completion of the improvements;
c. Approval by Ordinance of the Municipal Council; and
d. Submission by applicant of a certificate of occupancy.
Properties outside of Non-Applicable Areas where the Owner(s) seek to newly construct Dwellings, Multiple Dwellings, Commercial, or Industrial structures, and Properties outside of Non-Applicable Areas where the Owner(s) seek to construct Improvements to Dwellings, Multiple Dwellings, Commercial, or Industrial structures that are located outside of the Non-Applicable Areas of City of Newark are entitled to avail themselves of the opportunity to receive a five (5) year tax exemption and/or tax abatement as provided in this chapter when the qualifications are met as follows:
a. All real estate taxes must be current;
b. Written application to the Tax Assessor shall be filed within thirty (30) days, including Saturdays and Sundays, following completion of the improvements, and the form of the application shall contain requirements set forth in N.J.S.A. 40A:21-9;
c. Approval by Ordinance of the Municipal Council;
d. Submission by applicant of a Certificate of Occupancy; and
e. A 5-Year Financial Agreement between the City and the Applicant is executed.
(Ord. 6 S+FH, 2-2-94 § 10:10-3; Ord. 6 PSF-J, 1-21-09 §1)
Section 4. New Sections 5B, 5C, and 5D shall be added to read as follows:
10:23-5B. EXEMPTIONS AND ABATEMENTS FOR MULTIPLE DWELLINGS.
Exemptions and abatements from taxation shall be permitted within the City other than the Non-Applicable Areas for improvements to Multiple Dwellings.
Categories of improvements eligible for the abatement or exemption shall be approved by the Municipal Council or on an individual basis after review, evaluation, and approval of each application by the Tax Assessor.
Applicants shall provide a completed application containing information set forth in N.J.S.A. 40A:21-9 for the applicant to pay to the City in lieu of full property tax payments an amount annually to be computed as set forth in N.J.S.A. 40A:21A-6.
Notwithstanding that the value of the property to which the improvements or conversion alterations are made is increased, in determining the value of the real property, the City shall regard the Tax Assessor’s full and true value of the improvements or conversion alterations, as not increasing the value of the property for a period of five (5) years (Zero percent (0%) increase to the value of the property for the improvements or alterations for a period of five (5) years). The assessment on any property granted an exemption pursuant to this Section shall not be less than the assessment on the property existing immediately prior to the improvements or conversion alterations.
10:23-5C. EXEMPTIONS AND ABATEMENTS FOR COMMERCIAL AND INDUSTRIAL STRUCTURES.
Exemptions and abatements from taxation shall be permitted within the City other than the Non-Applicable Areas for improvements to Commercial and Industrial structures.
Categories of improvements eligible for the abatement or exemption shall be approved by the Municipal Council or on an individual basis after review, evaluation, and approval of each application by the Tax Assessor.
Applicants shall provide a completed application containing information set forth in N.J.S.A. 40A:21-9 for the applicant to pay to the City in lieu of full property tax payments an amount annually to be computed as set forth in N.J.S.A. 40A:21A-7.
Notwithstanding that the value of the property to which the improvements or conversion alterations are made is increased, in determining the value of the real property, the City shall regard the Tax Assessor’s full and true value of the improvements as not increasing the value of the property for a period of five years (Zero percent (0%) increase to the value of the property for the improvements or alterations for a period of five (5) years). The assessment on any property granted an exemption pursuant to this section shall not be less than the assessment on the property existing immediately prior to the improvements or conversion.
10:23-5D. EXEMPTIONS AND ABATEMENTS FOR NEW CONSTRUCTION OF DWELLINGS, MULTIPLE DWELLINGS, COMMERCIAL, AND INDUSTRIAL STRUCTURES.
Exemptions and abatements from taxation shall be permitted within the City other than the Non-Applicable Areas for New Construction of Dwellings, Multiple Dwellings, Commercial and Industrial structures.
Categories of improvements eligible for the abatement or exemption shall be approved by the Municipal Council or on an individual basis after review, evaluation, and approval of each application by the Tax Assessor.
Applicants shall provide a completed application containing information set forth in N.J.S.A. 40A:21-9 for the applicant to pay to the City in lieu of full property tax payments an amount annually to be computed by one of the following formulas:
(a) Costs Basis (Two percent (2%) of cost of construction),
(b) Gross Revenue Basis (fifteen percent (15%) of the annual gross revenues from the Project) or
(c) Tax Phase-in Basis (Zero percent (0%) payment in lieu of taxes in year 1, twenty percent (20%) payment in lieu of taxes in year 2, forty percent (40%) payment in lieu of taxes in year 3, sixty percent (60%) payment in lieu of taxes in year 4, eighty percent (80%) payment in lieu of taxes in year 5) as set forth in N.J.S.A. 40A:21A-10.
Section 4. 10:23-7. AUTHORIZATION FOR TAX EXEMPTION AND TAX ABATEMENT”) shall be amended as follows:
All tax exemptions and/or tax abatements shall be approved by Ordinance of the Municipal Council authorizing an agreement for tax exemption and/or tax abatement for a particular property for a period of five (5) years following completion. In the event that the City of Newark conducts a City-wide revaluation, any exemption or abatement granted pursuant to this chapter shall expire as of December 31 of that same year.
If during the term of the tax exemption and/or abatement, the property owner disposes of the property, the tax which would otherwise have been payable for each tax year shall become due and payable unless the Municipal Council determines by Resolution that the subsequent owner will continue to use the property pursuant to the conditions which qualified the property. (Ord. 6 S+FH, 2-2-94 § 10:10-7)
Section 5. A new Section 18 shall be added which reads as follows:
10:23-18. AUTHORIZATION FOR TAX EXEMPTION AND TAX ABATEMENT.
All tax agreements shall be applied for and granted on a project basis pursuant to N.J.S.A 40A:12A-8.
Section 6. A new Section 19 shall be added which reads as follows:
10:23-19. Applicability and Sunset Provision. The Five-Year Tax Exemption And Abatement shall apply to all areas outside of the Non-Applicable Areas for the next five (5) years following the date of final adoption of this amendment to this ordinance.
Section 7. Any ordinance or provision of any ordinance that is inconsistent with this amendment is hereby repealed.
Section 8. If any part of this ordinance is declared unconstitutional or illegal, the remaining provisions shall continue in full force and effect.
Section 9. This ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
STATEMENT
Ordinance amending and supplementing Title X, Finance and Taxation, Chapter 23, Five-Year Tax Exemption and Abatement, by adding dwellings, multiple dwellings, and commercial and industrial projects, establishing non-applicable areas and to incentivize development throughout the neighborhoods of the City of Newark, New Jersey.