Mayor Andre Sayegh’s administration secured the City Council’s approval early Wednesday morning for a 30-year tax abatement agreement for the controversial Hinchliffe Stadium project.
Council members voted 6-1 to grant final approval to the payment in lieu of taxes (Pilot) agreement. Under the agreement, the developers for the project will pay the city an average of $129,153 per year in taxes for the next 30 years, substantially less than what the property would pay if it were put on regular taxation.
Economic development director Michael Powell and the developers — Baye Adofo-Wilson of BAW Development and Joseph Portelli of RPM Development Group – argued the project needed the tax abatement to secure financing.
Portelli late last month said the project could not be completed without an abatement.
The developers and Powell suggested the tax abatement is a requirement to obtain financing through the New Jersey Housing and Mortgage Finance Agency (HMFA).
“It is not a requirement,” said councilwoman Maritza Davila.
A project without a tax abatement is likely to be deemed risky by the finance agency and require additional security in the form of increased debt service coverage or the escrow of extra funds.
Davila pointed out the developers are putting very little of their own money in the project. Much of the $77 million project is funded by government money. Sayegh earmarked $50 million in state tax credits that were given to Paterson years ago to the project.
Developers are contributing $3.3 million to the project from the developer’s fee. Davila has said that’s not “real money.”
Adofo-Wilson and Portelli will restore the historic 7,800-seat Hinchliffe Stadium, add a restaurant and exhibition space, build a 75-unit low-income senior housing complex near the stadium and a childcare facility, and a 314-space parking garage, according to municipal records.
Council members Al Abdelaziz, Ruby Cotton, Gilman Chowdhury, Lilisa Mimms, Luis Velez, and Flavio Rivera voted in favor of the tax abatement.
Davila was the sole vote against.
“No one can answer a straight question,” said Davila, who grew frustrated as Powell and Baye were evasive in answering questions about the project. “They can’t even answer the straight question: How much money will you be pocketing at the end of the project?”
Davila said the developers will receive $8.5 million in fees from the project.
“This is what the mayor chose to do. This is his vision for Paterson,” said Rivera. Sayegh unilaterally picked the developers without going through a request for proposal process. He did not solicit the input of council members, said Rivera, which led to raucous discussions in City Council meetings.
“Affordable housing is really, really needed in our city. Especially for our seniors,” said Cotton. She did not focus on the dollars and cents of the tax abatement deal, but looked forward to clean and affordable housing for senior citizens.
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