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
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
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!
