Here is a letter from Mayoral Candidate Tom Vincent on PILOTS and Redevelopment Zones:
On PILOTs and Redevelopment Zones
Redevelopment Zones and PILOTs in Hoboken have been used poorly. I think anyone would have to admit at least this.
But first, a little explanation. When a municipality declares an area a Redevelopment Zone, it releases that area from current zoning ordinances. The idea is to take blighted areas and make them more attractive to developers in the hopes of reviving parts of the city that have fallen into decay. In cases like this, it can be a useful tool.
In essence, the city allows developers to break the zoning rules and in return often gets help with public projects.
Redevelopment Zones are often used in conjunction with PILOT (Payment in Lieu of Taxes) agreements to keep taxes low for the new development which enhances the market value for the developer and also brings more money directly into the city's budget. This is because PILOTs tend to pay all the money in lieu of taxes directly to the city instead of paying a combination of city, county, and school taxes. It also allows the city to claim PILOT income as separate from the general tax levy. This artificially lowers the tax levy on which property taxes are based.
Of course all of this is simply an expensive shell game played with revenues and tax levies.
In the case of condominium PILOT developments, those condo owners pay lower taxes than the rest of the community and the taxes they pay don't go up and down like the rest of the city. They are covered that way for the length of the PILOT agreement. This is why some of your neighbors may be less upset about the recent tax increases. They didn't have to pay them.
Before painting too bleak a picture here, I should mention what a terrific idea PILOTs, along with HUD or any other form of funding, can be for affordable rent buildings. They allow a developer to offer consistent lower rents by guaranteeing stable and lower taxes.
In Hoboken however, special conditions exist.
At a mile square, anything done in one part of Hoboken has an impact on every other part of town. There are no outlying areas in a square mile.
Developers here have been allowed to build taller, closer to the sidewalk, and completely out of character with the rest of town in exchange for what are called give-backs, pools, parks and river walks. And while open space and ball fields are great things to have, we're selling the soul of our town to get them when we should be able to afford it ourselves.
One of the most precious things we have here is the character, the feel, the sidewalk experience of our city. It's defined by the stoops and wrought-iron gates, the brick and brownstone frontings, the general humanity of the place. There's a hand-made feeling that lets you know that people, individuals, live here and that lives are unfolding in those buildings.
All of the large-scale developments that have gone up in the last twenty years are lacking anything like that.
If this trend is allowed to continue, what we now call Hoboken will be a quaint little historic area referred to as "Old Town." This is how these things happen. And it's happening here and it's happening now.
Tom Vincent
http://www.tomvincentformayor.org/
On PILOTs and Redevelopment Zones
Redevelopment Zones and PILOTs in Hoboken have been used poorly. I think anyone would have to admit at least this.
But first, a little explanation. When a municipality declares an area a Redevelopment Zone, it releases that area from current zoning ordinances. The idea is to take blighted areas and make them more attractive to developers in the hopes of reviving parts of the city that have fallen into decay. In cases like this, it can be a useful tool.
In essence, the city allows developers to break the zoning rules and in return often gets help with public projects.
Redevelopment Zones are often used in conjunction with PILOT (Payment in Lieu of Taxes) agreements to keep taxes low for the new development which enhances the market value for the developer and also brings more money directly into the city's budget. This is because PILOTs tend to pay all the money in lieu of taxes directly to the city instead of paying a combination of city, county, and school taxes. It also allows the city to claim PILOT income as separate from the general tax levy. This artificially lowers the tax levy on which property taxes are based.
Of course all of this is simply an expensive shell game played with revenues and tax levies.
In the case of condominium PILOT developments, those condo owners pay lower taxes than the rest of the community and the taxes they pay don't go up and down like the rest of the city. They are covered that way for the length of the PILOT agreement. This is why some of your neighbors may be less upset about the recent tax increases. They didn't have to pay them.
Before painting too bleak a picture here, I should mention what a terrific idea PILOTs, along with HUD or any other form of funding, can be for affordable rent buildings. They allow a developer to offer consistent lower rents by guaranteeing stable and lower taxes.
In Hoboken however, special conditions exist.
At a mile square, anything done in one part of Hoboken has an impact on every other part of town. There are no outlying areas in a square mile.
Developers here have been allowed to build taller, closer to the sidewalk, and completely out of character with the rest of town in exchange for what are called give-backs, pools, parks and river walks. And while open space and ball fields are great things to have, we're selling the soul of our town to get them when we should be able to afford it ourselves.
One of the most precious things we have here is the character, the feel, the sidewalk experience of our city. It's defined by the stoops and wrought-iron gates, the brick and brownstone frontings, the general humanity of the place. There's a hand-made feeling that lets you know that people, individuals, live here and that lives are unfolding in those buildings.
All of the large-scale developments that have gone up in the last twenty years are lacking anything like that.
If this trend is allowed to continue, what we now call Hoboken will be a quaint little historic area referred to as "Old Town." This is how these things happen. And it's happening here and it's happening now.
Tom Vincent
http://www.tomvincentformayor.org/
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