Two massive apartment buildings that were set to come out of a 30-year tax abatement agreement have been given another 20-year agreement to hand the city 9-percent of rent revenues instead of assessed taxes.
The Great Falls Urban Renewal Preservation Limited Partnership which operates the Essex-Phoenix Mills, two affordable housing buildings, where the city’s artists live, located 23-25 Mill Street and 33-35 Van Houten Street, will pay 9-percent of gross annual revenue for the first seven years, and then for years 8-through-15 the company will increase the payment by half-of-a-percentage. From year 16 to 20 the company will pay 9.5-percent of yearly revenue.
In 2012, the company paid $170,000 to the city at 8-percent of revenue, according to Michael Leighton, the company’s lawyer. Leighton maintained that if the company were to pay regular taxes the city would receive less money after splitting between the school district and the county.
“Under the new tax abatement proposed, the project would pay no less in annual services charges, then it is currently paying, and indeed, the initial year of the abatement would require a payment of approximately $210,000 of which approximately $200,000 will be paid to the city,” according to the lawyer.
The company wants the new tax abatement agreement because it is going through an internal re-organization, where the previous owner is giving up the 145-apartment-unit building to a new owner. The new owners will spend $4.3 million in renovating the building: putting in new windows, landscaping, installing cabinets, installing exterior lighting, repairing the parking lots, and make other improvements to the building. The money will come from the New Jersey Housing and Mortgage Finance Agency and loan infusion from PNC Bank. Construction will be completed “within twelve months of closing,” according to the lawyer.
Some three decade ago the City Council gave the company a PILOT (Payment in Lieu of Taxes) agreement on the two buildings to ensure they were put to good use, rather than decaying like the rest of the antiquated buildings in the city from its days of splendor. That 30-year agreement expires in April 2014, a vote during Tuesday’s council meeting granted the company another 20-year agreement, where the company will provide payments rather than assessed tax to the city.
“The term tax-abatement is anathema to people in our community,” said Andre Sayegh, the 6th Ward councilman and council president, who wanted the lawyer to tell the public that under this agreement the city would receive more in taxes than it would in regular assessment. “Yes,” said Leighton, affirming that the company would indeed pay more in payment than it would in taxes.