Jersey City has struck a long-term tax break deal with the owner of a senior housing building to enable renovations. This move stirred sharp debate among City Council members, officials, and residents over the terms and transparency of the agreement.
The Jersey City Municipal Council adopted an ordinance at its April 9 meeting authorizing a 30-year long-term tax exemption with JHRC Senior Housing LLC. The entity is an affiliate of The Alpert Group, located at 60 Bergen Avenue in Teaneck, and is purchasing the senior housing building on Van Nostrand Avenue.
JHRC Senior Housing LLC sought a 30-year long-term tax exemption in order to receive funding from the New Jersey Housing and Mortgage Finance Agency (NJHMFA) to rehabilitate an existing 4-story senior apartment building with 67 residential units at 259 Van Nostrand Avenue, known as the Harwood Pavilion.
As cited by the ordinance, the renovations will include “replacement of the roof, new windows, exterior updates, new and efficient heating and cooling systems, exterior and site upgrades, elevator modernization, and new landscaping and streetscape appointments.”
Upgrades specific to each unit will include: new kitchen cabinets, energy-efficient updates, new electrical outlets, painting, and LED lighting. In addition, three apartments will be reconfigured to be fully handicap accessible, and there will be common area upgrades including new mailboxes, LED lighting, painting, flooring, exterior doors, and improved signage.
After the rehabilitation, the unit count will consist of eight studio units and 59 one-bedroom units, the ordinance states. All of the units are available specifically to senior citizens with incomes at or below 60 percent of the area median income.
Under the tax exemption, JHRC Senior Housing LLC will annually pay the City, in lieu of property taxes, 11% of the estimated annual gross revenue for the term of the agreement.
That is estimated to be $141,243 in the first year following the completion of the project.
In addition, they will pay an annual sum equal to two percent of each prior year’s annual service charge as an administrative fee until the correct amount due is determined by the auditor’s report. According to the ordinance, this culminates in a total of $5,844,560 in revenue for the City throughout the term of the abatement.
The term of the tax exemption will run until 35 years after the adoption of the ordinance or 30 years from the date the project is completed.
The ordinance and tax exemption will sunset and terminate if the property sale isn’t closed within 90 days, or the project construction doesn’t begin within two years, or is not substantially completed within five years of the ordinance’s adoption.
As part of the stipulations of the tax exemption, JHRC Senior Housing LLC will pay real estate taxes until the annual service charge becomes effective. They are also required to secure financing prior to construction commencement.
According to the ordinance, JHRC Senior Housing LLC will provide employment and other economic opportunities for City residents and businesses, including 150 construction jobs and two permanent full-time and part-time jobs. As is the case with other similar tax exemptions, the ordinance stipulates that the City determined that the benefits of the project outweigh the cost of the tax exemption.
The ordinance states that the project will stabilize and contribute to the economic growth of businesses in the surrounding area.
In addition, the ordinance indicates that the City has determined the relative stability and predictability of the annual service charges will make the project more attractive to investors who need to finance it and satisfy NJHMFA financing requirements.
That same stability and predictability will also allow the owner to stabilize its operating budget and ensure a high level of maintenance to the building throughout its life, which will attract tenants and increase the likelihood of the project’s success, the ordinance continues.
The ordinance was adopted by the City Council by a vote of 8-0-1, with Ward C Councilman Richard Boggiano being the sole abstention. At the April 9 meeting, Hudson County Commissioner Bill O’Dea was among members of the public who raised questions over the tax exemption during the public hearing on the ordinance.
In response to O’Dea’s request for more information, Acting Corporation Counsel Brittany Murray deferred to the applicant attorneys. “It’s not our application,” she said, to which O’Dea countered that he would think the City government would be able to answer questions related to the project for which they are considering granting a 30-year long-term tax exemption.
“I was hoping that those within the government could answer my questions,” O’Dea said. “Otherwise you’d be simply deferring to the developer’s attorney to tell you what they’re doing as opposed to internally reviewing it.”
“It’s a new abatement for rehab work being done to the property,” said the City’s Assistant Corporation Counsel John McKinney.
When O’Dea sought to clarify the rate of a “new pilot program” for the tax exemption, the city mistakenly said two percent before Ward E Councilman James Solomon clarified that it was the administrative fee percentage of the annual service charge, which falls under 11 percent.
However, the city could not tell O’Dea what the rate of the previous tax exemption in place. “I don’t have the answer to that question,” said McKinney, evoking a simple “Wow” from O’Dea at the lack of knowledge by city officials about this ordinance.
O’Dea recalled that there used to be a Tax Abatement Committee within the City Council, however, Council President Joyce Watterman confirmed it does not operate under the current council. “Not at this time, Bill,” she said. “It used to be.” Both officials are candidates for the November 4 mayoral race, in addition to Solomon.
When asked what the total cost of the renovations would be, officials were stiff in their response.
The ordinance, however, clearly states that it is estimated at $24,977,774. Following that exchange, Watterman attempted to table the ordinance until further answers could be provided.
“We should table this, because they can’t answer and this is their time to answer,” she said. “Our corporate counsel is supposed to represent us as a City. So while we reviewing these contracts, they should have certain answers.”
The city’s Corporation Counsel reaffirmed that, while he didn’t know the details of the tax exemption off the top of his head, he could read the ordinance into the record, which has some of that information.
After the cost of the renovations still could not be named by officials, O’Dea’s time ran out as he called for answers or tabling the ordinance, to which Watterman said it would be after the public hearing.
Resident Danielle Dadamo was among those who spoke during the public hearing against the tax exemption. She questioned the cost of the affordable senior housing in the community.
“A three-decade tax break means Jersey City residents, many already burdened with rising property taxes, will carry the financial weight,” Dadamo said. “We’re being asked to subsidize a private developer yet again without transparency on affordability, public benefits, or long-term accountability. How many seniors will this truly serve and will they even be local residents? Let’s not give away 30 years of revenue without a clear commitment to community needs, local hiring, and true affordability. Jersey City deserves smarter, fairer development.”
Thomas Leane, attorney for Connell Foley representing the applicant, told the City Council that everything was spelled out in the ordinance, but also spelled out the facts for the City Council. He finally managed to clarify that, as the ordinance states, the renovations have an approximate $25 million price tag.
“This is a continued commitment to provide 100 percent affordable housing for 67 seniors units all making under less than 60 percent of AMI,” Leane said. “The cost that is going into this building is slightly under $25 million. It is to modernize the building and provide a continuing good product for the seniors who currently live there.”
Following the close of the public hearing, Ward A Councilwoman Denise Ridley then asked that the ordinance move forward. The project is in her ward, and she is more than familiar with it, providing further clarity on the issues at the senior building that preempted the tax exemption.
“These are my seniors and I’m very familiar with this building,” Ridley said. “I was just there a few weeks ago. As he said, all the answers are in the ordinance. But we have to make sure that we’re prepared to answer those questions. Because the questions that were brought up were good questions. So I understand wanting to table for not having those answers ready once they were asked. But I think they have been addressed at this point.”
According to Ridley, this tax exemption for the existing senior building is not a new project. She added that the measure aims to facilitate repairs and follows the expiration of a previous tax abatement for the building, similar to what the City Council recently did with an “affordability project” for houses on Montgomery Street.
“This is one of the senior buildings that is usually very well kept, and when I was there a few weeks ago I was surprised to see some of the repairs that needed to be done,” Ridley said. “So I think it is important that we move this forward, especially if it might affect any timing with the developer. But this is an existing building, there are repairs that are needed, and this is all affordable… and I think we should take care of our seniors.”
Ward F Councilman Frank Gilmore offered partial support for both the applicant and City officials, emphasizing the necessity of renovations at the Van Nostrand Avenue building. He noted that the City Council has engaged in thorough discussions on the matter and stressed that it is the duty of both officials and residents to review the ordinance, where the details are clearly outlined.
“He didn’t know exactly where in the legislation it was, but the information is clearly laid out,” Gilmore said. “This senior building has been having so many issues that they called their council person and subsequently, the council person in the next ward to try to get things done. I know they had an issue with the elevator. Some seniors weren’t able to go to dialysis. Some seniors weren’t able to go out for food.”
Before casting his affirmative vote on the matter, Ward D Councilman Yousef Saleh highlighted that the senior building was originally developed through a PILOT and other related financing, and now requires this tax exemption for necessary renovations. He echoed Gilmore’s concerns, pointing out that the elevator is the most pressing of several ongoing issues affecting the building.
“This project was completed in 1995 with low-income housing, income tax credits, and also a PILOT, and within the last five years, it’s basically losing its PILOT status,” Saleh said. “It’s going to pay full taxes. It’s a four-story building with 67 senior units. It’s a senior building with all the residents at or below 60 percent area median income. So we’re not talking about like rich people here. This building has actually had a significant amount of issues with the elevator. And if you look at what they’re trying to do, they’re doing a significant amount of work. They’re making it ADA accessible.”
The council concluded by moving forward with the tax abatement by a vote of 8-0-1.
“It’s 100 percent affordable housing project,” added Solomon. “Those are very, very important for us to maintain in Jersey City. And Councilwoman Ridley, this is her ward and she has taken the lead on moving this forward.”
