Lakewood's Township Committee last year granted $4 million in short and long-term tax cuts for commercial buildings.
As a result, as previously reported here on FAA News, back in July 2023, the Township Committee recouped this loss by increasing our taxes $4 million.
Never ones to sit back and keep things stable, the Township Committee today adopted Ordinances granting additional short and long-term tax cuts for commercial buildings.
Prior to granting these tax cuts, members of the public asked the Committee not to grant the tax cuts, pointing out that the tax cuts lead to increased taxes for the rest of us. The Committee ignored the comments from the public.
Ordinance 2023-043 grants a long-term, 30 year tax cut to Tower Five, a planned eight story, 228,000 square foot office building in the Cedarbridge Corporate Campus.
The Township's Financial Agreement with the developer includes the following terms:
30 year term; 11% rate for the first 4 years increasing twenty-five basis points (0.25%) each year, with a cap at 17%; provided that in no event would the Annual Service Charge be less than 50% of what conventional taxes otherwise would be if the building had been assessed conventional taxes.
The projected Annual Service Charge and land tax portion will generate revenue to the Township of approximately $630,000 once the project reaches stabilization (anticipated in Year 3).
The Township's Ordinance states:
It is estimated that the Project will create jobs during construction and new permanent jobs. The Township has determined that the benefits of the Project significantly outweigh the costs to the Township. The clearance and remediation of the property will greatly improve the neighborhood. The Project will further the redevelopment objectives of the Redevelopment Plan for the Redevelopment Area. The Project should stabilize and contribute to the economic growth of existing local business and to the creation of new business, which will serve the new residents and attract additional people to Lakewood.
The relative stability and predictability of the Annual Service Charge will make the Project more attractive to investors and lenders needed to finance the Project, allow stabilization of the Project operating budget, allowing a high level of urban design, aesthetics and amenities as well as the use of high quality materials which will maintain the appearance of the buildings over the life of the Project, which will insure the likelihood of the success of the Project and insure that it will have a positive impact on the surrounding area.
Ordinance 2023-042 grants a 5 year tax abatement to 485 Oberlin Avenue.
Mayor Coles read a statement provided by the developer which states that the project is for new buildings as well as for renovations to the existing building. The project will provide 200-250 jobs during construction and 100 permanent jobs once the buildings are up and running.
Ordinance 2023-041 grants a 5 year tax abatement to 1366 River Avenue.
Mayor Coles read a statement provided by the developer which states that the project is for an 8,700 sq foot commercial building, the construction is to cost $500,000 and to provide jobs for 10-15 employees. No leases have yet been signed so it is not yet known how many jobs for permanent employees the building will provide.
(5 year tax abatements are structured so in the first year they pay 0%, then an additional 20% each year for the next 4 years.)
The Township's Ordinances state:
The Township Committee finds that this project qualifies as “construction” and as a “project;" that the project will significantly contribute to the expansion of commerce within the Township and with the eventual increase to the tax base of a substantial ratable; that the construction of these facilities will provide increased job opportunities within the Township; and that the project shall contribute toward the inducement of other projects to locate within the Township, thereby enhancing and improving the economic climate of the Township.
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