Hackensack’s new city council has unanimously voted to rescind three tax incentive agreements, known as PILOTs (payment in-lieu of taxes), that were approved by the previous city council. The agreements were rescinded just months after former mayor John Labrosse and his council were defeated at the polls.
Developers Russo Development, Alfred Sanzari and Enburg Development previously said that they intended to use the incentives to deliver luxury apartment units and commercial space to the former Sears tower on Main Street as well as two undeveloped parcels downtown.
But during the August 11 city council meeting, attorneys working on behalf of the developers and city residents offered conflicting views on the agreements. The developers’ attorneys warned city council that rescinding the tax incentives would be illegal and would likely lead to legal action. However, residents who submitted public comments were overwhelmingly against the tax breaks.
“Here is the bottom line: you can keep an empty lot or you can create meaningful revenue for the city,” Leo Hurley Jr., a partner and co-chair of commercial litigation at Connell Foley, and the attorney representing Enburg Development’s Sapphire Urban Renewal LLC said during the meeting. “Anyway you cut it, there has been nothing that has changed since the time the ordinance [for the PILOT] was signed. The action being taken here tonight is by definition, arbitrary and capricious.”
Residents who submitted public comments were split on how they felt about the proposed developments, but they found consensus in that PILOTs should work for the residents of the city rather than developers.
Pedra Del Vechio, a resident of Hackensack who submitted a public comment in favor of rescinding the tax abatement for the redevelopment of the former Sears store, said that developers don’t really need any more incentives due to the number of new residents and units in the city.
“This is a valuable real estate market – a highly valuable community,’ she said. “We don’t need to incentivize [developers] anymore. They can pay taxes just like I do.”
Jersey Digs reported earlier this year that the limited-liability companies affiliated with the redevelopment of the Sears building at 436 Main Street, and the proposed developments at 132-148 Main Street and 1 Essex Street, secured site plan approvals from the city’s planning board. These approvals came shortly before the May 13 mayoral and city council election, in which all incumbents lost.
The tax incentive agreements, however, were approved after the election.
According to TheRidgewoodblog.net, RHR Hackensack Urban Renewal secured its 30-year PILOT for the Sears property on May 20, while Alfred Sanzari’s Essex One Urban Renewal LLC and Enburg Group’s Sapphire Urban Renewal LLC secured their 30 and 15-year agreements, respectively, on June 24.
Despite the potential for legal fees and damages, and the possibility of keeping three prominent sites idle for years, the new city council and Mayor Caseen Gaines are seemingly delivering on their campaign promises. Residents who spoke at the meeting appeared to be okay with these associated risks, finding consensus that new developments should work for the residents of the city rather than developers.
