An upcoming residential development project in a Newark neighborhood is expected to receive a major tax abatement as part of a financial agreement between the developer and the municipal government.
The project in question will be constructed at 94-106 Polk Street between Ferry and Clover Streets in the East Ward’s Ironbound neighborhood. A legal notice shows that the “market rate” development by Vauxhall-based 100 Polk Street Urban Renewal, LLC and Grove Property Holdings, LLC is expected to include 42 units, all of which will be rentals. Parking is expected to be provided on the premises. The property used to contain a warehouse that had been occupied by companies like Reich Electric Motor, but the building was torn down over the summer, likely in order to make way for this development.
As part of the proposed agreement with the City of Newark, records from the municipal Legislative Research Center show that 100 Polk Street Urban Renewal would receive a tax abatement on improvements for 25 years. The abatement, which was requested by the LLC, has been recommended by Mayor Ras Baraka to the Newark Municipal Council, according to the notice. The Newark Department of Economic and Housing Development has reportedly determined that “the relative benefits of this project outweigh any costs associated with this tax exemption and that without the tax abatement…the project would not be undertaken.”
As an alternative to improvement taxes for the next two and a half decades, the developer is expected to pay an annual service charge to City Hall. The service charge would range from between 10 and 14 percent of the project’s annual gross revenues, according to the Legislative Research Center. Plus, the LLC must also first pay all of the property’s outstanding taxes and water bills. Should the LLC end up selling or leasing the project without the Council’s advance permission, the abatement would be canceled.
The proposed agreement is not yet set in stone. Although the ordinance approving the tax abatement was passed on first reading by the Council earlier this month, the Council is scheduled to vote on whether to grant final passage during its meeting this Wednesday, December 19 at 6:30 p.m.
Note to readers: The dates that ordinances and resolutions are scheduled to be voted on by the Newark Municipal Council and other governing bodies are subject to change.