This article shall be known as the "Five-Year Exemption and
Abatement Law for Commercial and Industrial Structures."
The purpose of this article is to establish procedures whereby
qualified individuals and corporations may avail themselves of the
property tax exemptions and abatements which the Borough of Red Bank
is permitted by law to grant pursuant to Chapter 441, Laws of New
Jersey, 1991.
The specific area covered by this article is all properties
within the Borough of Red Bank fronting on Shrewsbury Avenue beginning
at Newman Springs Road and going northerly to the railroad line now
or formerly Consolidated Rail Corporation. It is the desire and intent
of this article to promote the construction and rehabilitation of
structures in this area and to combat economic decline.
Terms as used in this article shall have the meaning provided
below:
ABATEMENT
That portion of the assessed value of a property as it existed
prior to construction, improvement or conversion of a building or
structure thereon, which is exempted from taxation pursuant to this
Act.
AREA IN NEED OF REHABILITATION
That area on Shrewsbury Avenue designated in §
628-8 of this article which has been determined to be an area in need of rehabilitation or redevelopment pursuant to law in which a significant portion of residential, commercial and industrial structures are in a deteriorated or substandard condition; there exists a continuing pattern of property tax arrearage and vacant or underutilized properties; and, where a program of rehabilitation, improvement, and new in-fill construction will prevent further deterioration and promote the overall development of the municipality.
ASSESSOR
The officer of the Borough of Red Bank charged with the duty
of assessing real property for the purpose of general taxation.
COMMERCIAL OR INDUSTRIAL STRUCTURE
A structure or part thereof used for the manufacturing, processing
or assembling of material or manufactured products, or used for research,
office, industrial, commercial retail, recreational, hotel or motel
facilities, or warehousing purposes, or for any combination thereof,
which the governing body determines will tend to maintain or provide
gainful employment within the Borough; assist in the economic development
of the Borough; maintain or increase the tax base of the Borough;
and maintain or diversify and expand commerce within the Borough.
It shall not include any structure or part thereof used or to be used
by any business relocated from another qualifying municipality.
COMPLETION
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
CONSTRUCTION
The provision of a new commercial or industrial structure,
or the enlargement of the volume of an existing multiple dwelling
or commercial or industrial structure by more than 30%, but shall
not mean the conversion of an existing building or structure to another
use.
CONVERSION or CONVERSION ALTERATION
The alteration or renovation of a building or structure in
such manner as to convert the building or structure from its previous
use to use as a commercial or industrial structure.
COST
Only the cost or fair market value of direct labor and materials
used in improving, converting or constructing a building or structure,
including any architectural, engineering, and contractor's fees associated
therewith, as the owner of the property shall cause to be certified
to the governing body by an independent and qualified architect, following
the completion of the project.
EXEMPTION
That portion of the assessor's full and true value of any
improvement, conversion alteration, or construction not regarded as
increasing the taxable value of a property pursuant to this Act.
IMPROVEMENT
A modernization, rehabilitation, renovation, alteration or
repair which produces a physical change in an existing building or
structure that improves the safety, sanitation, decency or attractiveness
of the building or structure as place for work. In the case of a commercial
or industrial structure, it shall not include ordinary painting, repairs
and replacement of maintenance items, or an enlargement of the volume
of an existing structure by more than 30%. In no case shall it include
the repair of fire or other damage to a property for which payment
of a claim was received by any person from an insurance company at
any time during the three-year period immediately preceding the filing
of an application pursuant to this Act.
With regard to tax exemption and abatement for new construction
of commercial or industrial structures, all applicants shall provide
the governing body with an application setting forth:
A. A general description of a project for which exemption and abatement
is sought;
B. A legal description of all real estate necessary for the project;
C. Plans, drawings and other documents as may be required by the governing
body to demonstrate the structure and design of the project;
D. A description of the number, classes and type of employees to be
employed at the project site within two years of completion of the
project;
E. A statement of the reasons for seeking tax exemption and abatement
on the project, and a description of the benefits to be realized by
the applicant if a tax agreement is granted;
F. Estimates of the cost of completing such project;
G. A statement showing:
(1) The
real property taxes currently being assessed at the project site;
(2) Estimated
tax payments that would be made annually by the applicant on the project
during the period of the agreement; and
(3) Estimated
tax payments that would be made by the applicant on the project during
the first full year following the termination of the tax agreement.
H. A description of any lease agreements between the applicant and proposed
users of the commercial or industrial project, and a history and description
of the users' businesses;
I. Such other pertinent information as the governing body may require.
On approval of the governing body of a tax agreement for a particular
project, the governing body may enter into a written agreement with
the applicant for the exemption and abatement of local real property
taxes. The agreement shall provide for the applicant to pay to the
municipality in lieu of full property tax payments an amount annually
to be computed by the tax phase-in basis formula, as follows:
A. Tax phase-in basis. The agreement may provide for the applicant to
pay to the municipality in lieu of full property tax payments an amount
equal to a percentage of taxes otherwise due, according to the following
schedule:
(1) In the first full tax year after completion, no payment in lieu of
taxes otherwise due;
(2) In the second tax year, an amount not less than 20% of taxes otherwise
due;
(3) In the third tax year, an amount not less than 40% of taxes otherwise
due;
(4) In the fourth tax year, an amount not less than 60% of taxes otherwise
due;
(5) In the fifth year, an amount not less than 80% of taxes otherwise
due.
The Borough Assessor shall determine, on October 1 of the year
following the date of the completion of an improvement, conversion
or construction, the true taxable value thereof. Except for projects
subject to tax agreement, pursuant to this article, the amount of
tax to be paid for the first full tax year following completion shall
be based on the assessed valuation of the property for the previous
year, minus the amount of the abatement, if any, allowed pursuant
to this article, plus any portion of the assessed valuation of the
improvement, conversion or construction not allowed an exemption pursuant
to this article. The property owner shall continue to be treated in
the appropriate manner under the terms of this article and the tax
agreement, if any, for each of the five full tax years subsequent
to the original determination by the Borough Assessor.
Any additional improvement, conversion or construction, completed
on a property granted a previous exemption or abatement pursuant to
this article during the period in which such previous exemption or
abatement is in effect, shall be qualified for an exemption, or exemption
and abatement, just as if such property had not received a previous
exemption or abatement. In such case, the additional improvement,
conversion or construction shall be considered as separate for the
purposes of calculating exemptions and abatements pursuant to this
article, except that the assessed value of any previous improvement,
conversion or construction shall be added to the assessed valuation
as it was prior to that improvement, conversion alteration or construction
for the purpose of determining the assessed valuation of the property
from which any additional abatement is to be subtracted.
No exemption or abatement shall be granted, or tax agreement
entered into, pursuant to this article with respect to any property
for which property taxes are delinquent or remain unpaid, or for which
penalties for nonpayment of taxes are due.
The exemption and abatement of real property taxes pursuant
to this article shall apply to property taxes levied for municipal
purposes, school purposes, county government purposes and for the
purposes of funding any other property tax exemptions or abatements.
The Borough Tax Collector shall include a notice describing
the exemption program or exemption and abatement program provided
for by this article and the application procedure therefor, in the
mailing of annual property bills to each owner of a building or structure
located in the area in which exemptions, or exemptions and abatements,
may be allowed pursuant to this article during the first year following
adoption of the article.
No exemption or abatement granted by any prior ordinance or
law shall be affected or terminated by this article, but shall remain
in effect for the time and under the terms granted as if the ordinance
had not been superseded or repealed.
This article shall take effect immediately, and exemptions and
abatements may be granted, and tax agreements entered into, for the
first full tax year commencing after enactment and for tax years thereafter.