For the second time in twelve months, the city council rejected a 30-year tax abatement with a developer.
Council members in a 5-1 vote rejected the payment in lieu of taxes (PILOT) agreement which would have allowed for a $29 million investment in housing in the Silk City on Tuesday night.
Councilman Michael Jackson led the opposition against the tax deal arguing the developer, Cooke Hamilton Associates, is not contributing enough to the community.
Jackson wanted the developer to contribute a small percentage of cost of the project to support improvements to a local park in return for the tax deal. In a presentation, he argued developers in places like Jersey City are contributing as much as 7-percent of their project cost to support things that benefit the community.
Jackson cited a developer’s willingness to pay a share of the cost for building a school in Jersey City.
“What they did in Jersey City is why they thrive and we don’t,” said Jackson.
George McLoof, owner of Cooke Hamilton Associates, has long agreed he needed to make a contribution. He has offered free community meeting space. He offered historic doors for the Paterson Museum. And he offered to support the city’s recreation program.
“These doors don’t open opportunities for our children,” remarked Jackson as images of decorative doors danced on the projector screen. In his latest offer to make a community contribution, McLoof worked with mayor Jose “Joey” Torres’ administration and agreed to offer $60,000 to support recreation over the next three years.
Jackson called the $20,000 per year for the next three years paltry compared to the cost of the project. He called the millions the developer is getting to pay for the project “free money” a portion of which should be dedicated to a community project.
“There’s no such thing as free money,” said McLoof. He said Jackson does not know what he is talking about.
McLoof has twice revised the agreement to contribute more money in taxes to city coffers. Under conventional taxes, the developer pays $8.26 million over a 30-year period; under the PILOT, the properties pay $9.53 million over the same time frame, according to public documents.
The tax abatement agreement is for a group of mill buildings located at 5-7 Mill Street, 20 Mill Street, 21 Mill Street, and 21 Market Street. The project would have created 100 construction and 7 permanent jobs, according to the city.
Torres has said the biggest benefit of the project to the city is the affordable housing it will create. Maritza Davila, councilwoman at-large, the sole vote in favor of the tax abatement, echoed Torres’ sentiment.
“There are benefits, maybe they are not the benefits you want,” she told Jackson citing the low-income housing component of the project.
“We’re not going to move this city to the next level using low-income housing,” said Alex Mendez, councilman at-large, on Tuesday night. He said low-income housing will not attract a middle class to a city.
Council members Jackson, Mendez, Andre Sayegh, Shahin Khalique, and Luis Velez voted down the agreement. Kenneth Morris, councilman at-large, recused himself. And council president William McKoy abstained. Ruby Cotton, 4th Ward councilwoman, was absent.
Morris said he wanted no part in forcing a community contribution from the developer as a condition for approving the measure. Jackson was warned by the city’s lawyers in the past that such a thing may be considered as “quid pro quo.” Any community contribution should have been worked out with the developer at the planning board level, he said.
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