Jersey City Mayor Stephen Fulop recently unveiled several important revisions to the city’s popular tax abatement policy.
The latest changes reflect a new, comprehensive housing policy objective that seeks to distribute more evenly the benefits of the unprecedented wave of development now taking place in parts of the city.
Shortly after taking office in 2013, Mayor Fulop first revised Jersey City’s Payment in Lieu of Taxes (PILOT) program. The centerpiece of the revamped PILOT program was a tiered-system under which the terms of available tax abatements (most notably the length of the abatement) are largely determined by the location of the project.
The latest iteration of Jersey City’s tax abatement policy retains the tiered structure, while making minor tweaks to the policy. As set forth in Executive Order 2015-007, the revised program is intended to build on the success of the current PILOT program and instill greater transparency, objectivity, uniformity and predictability and to better employ the program’s incentives to meet the city’s strategic goals. Notably, the revised tax abatement revolves around a new tier map. The first three tiers incorporate the latest income data gathered by the city, while the expanded fourth tier includes areas in the city most in need of development.
In an effort to leverage the economic activity that is taking place in Jersey City, the amended tax abatement policy includes new affordable housing requirements and incentives. In the most sought after Tier 1, developers seeking abatements are required to set aside 10 percent of the total number of units for moderate-income housing, which is defined as housing available to households earning at or below 80 percent of the area median income. Alternatively, developers can make a contribution to the city’s affordable housing trust fund. Developers in the other tiers can further extend their tax-abatement terms by up to ten years by committing to construct affordable units or by making a voluntary contribution to the affordable trust fund.
Under the new tax abatement policy, the annual service charges increased slightly. Below is a brief summary of the new service charge levels provided by Jersey City:
Tax Tier
Term
Annual City Service Charge
Annual County Service Charge
Administrative Cost Charge
Tier 1
10 years
13% annual gross revenues
5% of annual City service charge
2% of annual City service charge
Tier 2
10 years
12% annual gross revenues
5% of annual City service charge
2% of annual City service charge
Tier 3
20 years
11% annual gross revenues
5% of annual City service charge
2% of annual City service charge
Tier 4
30 years
10% annual gross revenues
5% of annual City service charge
2% of annual City service charge
The revised policies and procedures apply to future long term PILOTs and related financial agreements. To determine how the new tax abatement policy may impact your project, it is advisable to consult with an experienced New Jersey attorney.
Donald M. Pepe devotes his practice to all aspects of complex real estate development and real estate transactional work with an emphasis on retail and residential development.
Related Article: The Tax Abatement Process in Jersey City, NJ: The Basics
Long-Term Tax Abatements In New Jersey
Tax Abatement Attorney In Jersey City, NJ
How To File A Five-Year tax Abatement In New Jersey
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
How to Conduct a Fair and Legal Employee Termination in 2025
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Admin Dissolution for Annual Report: What You Need to Know
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
