[Adopted 10-1-1996 by Ord. No. O:96-23 (Ch. 61A, Art. I of the 1969 Code)]
The exemption or abatement of property taxes for a five-year term commencing with the completion of an improvement or construction of a commercial or industrial structure shall be available to property owners in the Phillipsburg Urban Enterprise Zone. Mixed-use structures with a residential component to a commercial or industrial structure are also eligible to apply to the Town Council for the exemption or abatement of real estate taxes on improvements or new construction within the Phillipsburg Urban Enterprise Zone.[1]
[1]
Editor's Note: Original § 61A-2, Improvements to existing structures, which previously followed this section, was repealed 6-7-2005 by Ord. No. O:2005-25.
[Added 3-4-2014 by Ord. No. O:2014-06]
Improvements to existing structures shall be exempt from assessment for a period five years following completion of the improvement. Property owners applying for exemption on improvements shall agree not to appeal the existing tax assessment as established at the time of application for said exemption. "Improvements" means a modernization, renovation, alteration or repair which produces a physical change in the existing building or structure and which does not expand the building or structure by more than 30%. Improvements under this section must be equal to or greater than 20% of the assessed value of the property in cost as certified by a licensed contractor or architect.
New construction of a commercial or industrial structure or additions to existing industrial or commercial structures which expand said building or structure by more than 30% shall be entitled to apply to the Town Council for abatement of property taxes for a five-year period commencing with completion of the project. The Town Council may enter into an agreement with the applicant for the abatement of real property taxes. Notwithstanding the payment in lieu of taxes due to the municipality under this section, in no event shall the payments be less than the taxes due on the property which is the subject of the abatement in the year immediately prior to the application for tax abatement. The agreement shall provide for the applicant to pay to the municipality, in lieu of full property taxes, an amount annually to be computed by one, but in no case a combination, of the following formulas:
A. 
Cost basis. The agreement may provide for the applicant to pay to the municipality, in lieu of full property taxes, an amount equal to 2% of the total project cost. The "total project cost" means the cost or fair market value of direct labor, and all materials used in construction or expansion of all buildings or structures at the project site, including the costs, if any, of land acquisition and land preparation, provision of access roads, utilities, drainage facilities and parking facilities together with architectural, engineering, legal, surveying, testing and contractors' fees associated with the project which shall be certified to by a licensed New Jersey architect 90 days following completion of a project.
B. 
Gross revenue basis. The agreement may provide for the applicant to pay to the municipality, in lieu of full property taxes, an amount equal to 15% of the annual gross revenues from the project. For the purpose of the agreement, "annual gross revenues" means the total annual gross rental and other income payable to the owner of the project from the project. In any leasing, any real estate taxes or, in lieu of tax payments on property included in the project, any premiums for fire or other insurance on or concerning property included in the project, or any operating or maintenance expenses ordinarily paid by the landlord, are to be paid by the tenant, then those payments shall be computed and deemed to be part of the rent and shall be included in annual gross revenues. The agreement shall provide that the applicant shall provide a certified audit of project revenues to the municipality within 90 days of the close of the project's fiscal year which will be deemed to commence with the completion of the project.
C. 
Tax phase-in basis. The agreement may provide for the applicant to pay to the municipality, in lieu of full property taxes, an amount equal to a percentage of taxes otherwise due, according to the following schedule:
(1) 
In the first full year after project completion: no payment in lieu of taxes otherwise due.
(2) 
In the second full year after project completion: an amount not less than 20% of the taxes otherwise due.
(3) 
In the third full year after project completion: an amount not less than 40% of the taxes otherwise due.
(4) 
In the fourth full year after project completion: an amount not less than 60% of the taxes otherwise due.
(5) 
In the fifth full year after project completion: an amount not less than 80% of the taxes otherwise due.
D. 
Total five-year exemption. The agreement may provide for the applicant to obtain a tax exemption for a full five-year annual period, provided that the applicant has submitted his application in accordance with the Township Code. The exemption period shall begin as of the date the certificate of occupancy is received.
[Added 10-6-2009 by Ord. No. O:2009-17]
Applicants for tax abatement for new construction of commercial or industrial structures shall provide the Town Council with an application setting forth:
A. 
A general description of the project for which the abatement is sought.
B. 
A legal description of the real estate necessary for the project.
C. 
Plans, drawings and other documents as the Town Council may require, demonstrating the structure and design of the project.
D. 
A description of the number, classes and type of jobs to be created at the project site following project completion.
E. 
A statement of the benefits to be realized by the applicant if tax abatement is granted and the reasons for seeking tax abatement.
F. 
Estimates of cost of completing the project.
G. 
A statement of the property taxes currently assessed at the project site and the estimated payments to be made by the applicant during the period of tax abatement.
H. 
A description of any lease agreements between the applicant and tenants.
I. 
A description of the tenants' business operation.
[Amended 6-7-2005 by Ord. No. O:2005-25]
All applications for tax abatement or tax exemption hereunder shall be forwarded to the Tax Assessor, in triplicate, not later than 30 days following completion of work (substantially ready for the intended use) and the issuance of a certificate of occupancy by the Town to the applicant.
The percentage which the payment in lieu of taxes bears to the property taxes which would have been paid had an abatement not been granted for the property under the agreement shall be applied to the valuation of the property to determine the reduced valuation of the property to be included in the valuation of the municipality for determining equalization for county apportionment and school aid during the term of the tax abatement agreement covering the property.
If during any tax year prior to the termination of the tax abatement or exemption agreement, the applicant ceases to operate or disposes of the property or otherwise fails to meet the conditions of eligibility, the tax otherwise due if there had been no abatement or exemption shall become due and payable by the property owner. The Tax Assessor shall notify the property owner and the Tax Collector forthwith, and the Tax Collector shall, within 15 days thereof, notify the owner of the property of the amount of taxes due. However, with respect to sale or other disposal of the property which it is determined that the new owner of the property will continue to use the property pursuant to the conditions which were set forth in the tax abatement or exemption agreement, the exemption or abatement shall continue.
In the event of default by the applicant, including but not limited to the failure to make timely tax or in lieu of tax payments to the municipality, the municipality shall notify the applicant, in writing, of said default. Said notice shall set forth with particularity the basis of said default. The applicant shall have 30 days to cure any default. Following the third day cure period, the municipality shall have the right to proceed against the property pursuant to the In Rem Tax Foreclosure Act,[1] N.J.S.A. 54:4-1 et seq., and/or may cancel the financial agreement upon 30 days' notice to the applicant.
[1]
Editor's Note: See N.J.S.A. 54:5-104.29 et seq.
No application for tax exemption or abatement shall be accepted by the municipality unless accompanied by full payment of the required application fee. Such fees shall be based on total project cost as set forth in a schedule on file with the office of the Municipal Clerk. These fees shall be received as compensation for the legal review and related work the municipality's departments and agencies.[1]
[1]
Editor's Note: Former Art. II, Long-Term Tax Exemption, adopted 10-1-1996 by Ord. No. O:96-24 (Ch. 61A, Art. II of the 1969 Code), as amended, was repealed 2-4-2014 by Ord. No. O:2014-04.