After joining the Economic Opportunity Act of 2013 seven-month ago, the city is set to issue its first five-year tax abatement to a Main Street business.
Future Main Realty, a Clifton based company, which owns 900-904 Main Street, applied for the tax abatement after the completion of a $679,000 construction project at the site where a pharmacy now stands.
The company finished its project in April 3rd, 2014, according to its application. The building’s first floor is being utilized as retail space, while the 2nd and 3rd floor contain eight apartments. After construction finished last month, the company applied for the tax abatement.
With the city’s current tax rate of 2.74-percent, the company will save $93,025 in taxes over the next five years.
“A developer for a period of five years will pay taxes on pre-improvement value of the development,” said Kenneth Morris, councilman at-large, last week. Morris explained, the company will be paying taxes, but not on the improvement it has made.
The councilman explained that in the past a tax abatement would be granted after certain requirements were met through the city’s tax office; however, a change now brings the abatement before the city council for a vote.
This is the first abatement to come before the council since the passage of the economic incentive ordinance last year.
In November, the city adopted the economic incentive ordinance promulgated by the state that will provide developers with lucrative tax deals to build within the city’s boundaries. The ordinance allows some developers to go without paying taxes for as much as ten-years on improved properties.
“At the end of five years they will be in full taxation,” Morris said.
The council is set to approve the tax abatement during tonight’s meeting.