[HISTORY: Adopted by the Borough Council
of the Borough of Chesilhurst as indicated in article histories. Amendments
noted where applicable.]
[Adopted 7-14-1977 by Ord. No. 77-5; amended in its entirety at time of adoption
of Code (see Ch. 1, General Provisions, Art. I)]
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 Chesilhurst
is permitted by law to grant pursuant to N.J.S.A. 40A:21-1 et seq.
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.
As used in this article, the following terms shall have the
meanings indicated:
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
article.
The officer of the Borough of Chesilhurst charged with the
duty of assessing real property for the purpose of general taxation.
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 a
business relocated from another qualifying municipality.
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
The provision of a new commercial or industrial structure
or the enlargement of the volume of an existing commercial or industrial
structure by more than 30%, but shall not mean the conversion of an
existing building or structure to another property class use.
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.
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.
A building or part of a building used, to be used or held
for use as a home or residence, including accessory buildings located
on the same premises, together with the land upon which such building
or buildings are erected and which may be necessary for the fair enjoyment
thereof, but shall not mean any building or part of a building, defined
as a "multiple dwelling" pursuant to the Hotel and Multiple Dwelling
Law P.L. 1967, c. 76 (N.J.S.A. 55:13A-1 et seq.). A dwelling shall
include, as they are separately conveyed to individual owners, individual
residences within a cooperative, if purchased separately by the occupants
thereof, and individual residences within a horizontal property regime
or a condominium, but shall not include "general common elements"
or "common elements" of such horizontal property regime or condominium
as defined pursuant to the Horizontal Property Act[1] or the Condominium Act,[2] or of a cooperative if the residential units are owned
separately.
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 property.
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 a 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 article.
A building or structure meeting the definition of "multiple
dwelling" as set forth in Hotel and Multiple Dwelling Law, and means
for the purpose of improvement or construction the "general common
elements" and "common elements" of a condominium, a cooperative or
a horizontal property regime.
A.
This article authorizes an exemption from taxation of improvements
to residential, multifamily, commercial or industrial structures as
defined herein. This exemption shall be granted only by the governing
body on an individual basis after review, evaluation and approval
of each application.
B.
With regard to exemption from taxation of improvements to residential,
multifamily, commercial or industrial structures, the municipality
shall regard, in determining the value of real property, the Assessor's
full and true value of the improvements as not increasing the value
of the property for a period of five years, notwithstanding that the
value of the property to which the improvements are made is increased
thereby. During the exemption period, the assessment on the property
shall not be less than the assessment thereon existing immediately
prior to the improvements unless there is damage to the structure
through action of the elements sufficient to warrant a reduction.
C.
Upon the timely receipt of a completed application, the governing
body may approve a tax agreement providing for the tax phase-in for
the value of the improvements as cited by the Assessor or an alternate
taxing method if it is in the public interest.
A.
This article authorizes the granting of tax abatement and exemption
for new construction of residential, multifamily, commercial or industrial
structures as defined herein.
With regard to tax exemption and abatement for improvements
to or for new construction of residential, multifamily dwelling, 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, drawing sand other documents as may be required by the governing
body to demonstrate the structure and design of the work.
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 reason 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 the real property taxes currently being assessed
at the project site; estimated tax payments that would be made annually
by the applicant on the project during the period of the agreement;
and estimated tax payments that would be made by the applicant on
the project during the first full year following the termination of
the agreement.
H.
A description of any lease agreements between the applicant and proposed
users of the commercial or industrial project and history and description
of the users' businesses.
I.
Such other potential information as the governing body may require.
On approval by 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 one, but in no case a combination, of the following
formulas:
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 of the increased
taxes otherwise due as a result of the improvement or construction.
(2)
In the second tax year, an amount not less than 20% of the tax increase
otherwise due as a result of the improvement or construction.
(3)
In the third tax year, an amount not less than 40% of the tax increase
otherwise due as a result of the improvement or construction.
(4)
In the fourth tax year, an amount not less than 60% of the tax increase
otherwise due as a result of the improvement or construction.
(5)
In the fifth tax year, an amount not less than 80% of the tax increase
otherwise due as a result of the improvement or construction.
B.
Cost basis. The agreement may provide for the applicant to pay to
the municipality in lieu of full property tax payments an amount equal
to 2% of the cost of the project. For the purposes of the agreement,
the "cost of the project" means only the fair market value of the
direct labor and the cost of all materials used in the construction,
expansion or rehabilitation of all buildings, structure and facilities
at the project site, including the cost, 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 the applicant shall cause to be certified and verified
to the governing body by an independent and qualified architect following
the completion of the project.
C.
Gross revenue basis. The agreement may provide for the applicant
to make an annual payment to the municipality in lieu of full property
tax payments in an amount equal to 15% of the annual gross revenues
from the project. For the purposes 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. If in any leasing, any
real estate taxes or assessments 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 the annual gross revenue. The tax agreement shall establish the
method of computing the revenues and may establish a method of arbitration
by which either the landlord or tenant may dispute the amount of payments
so included in the annual gross revenue.
A.
All tax agreements entered into under this article shall be in effect
for no more than five full tax years following the date of completion
of the project.
B.
All projects subject to tax agreement as provided herein shall be
subject to all applicable federal, state and local laws and regulations
on pollution control, worker safety, discrimination in employment,
housing provision, zoning, planning and building code requirements.
C.
That percentage which the payment in lieu of taxes for a property
bears to the property tax which would have been paid had an exemption
and abatement not been granted for the property shall be applied to
the valuation of the property for determining equalization for county
tax apportionment and school aid during the term of the tax agreement.
D.
Within 30 days after the execution of a tax agreement, the Borough
Clerk shall forward a copy of the agreement to the Director of the
Division of Local Government Services and the Department of Community
Affairs and to such other officials or agencies that the governing
body may direct.
A.
If during any tax year prior to the termination of the tax agreement
the property owner ceases to operate or disposes of the property or
fails to meet the conditions for qualifying, then the tax which would
have otherwise been payable for each tax year shall become due and
payable from the property owner as if no exemption and abatement had
been granted. The governing body shall notify the property owner and
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 the disposal of the property where it is
determined that the new owner of the property will continue to use
the property pursuant to the conditions which qualified the property,
no tax shall be due, the exemption and the abatement shall continue
and the agreement shall remain effect.
B.
At the termination of a tax agreement, a project shall be subject
to all applicable real property taxes as provided by state law and
regulation and local ordinance; but nothing herein shall prohibit
a project, at the termination of an agreement, from qualifying for
and receiving the full benefits of any other tax preferences provided
by law.
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 alteration or construction for the purpose of determining
the assessed valuation of the property from which any additional abatement
is to be subtracted.
A.
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.
B.
No exemption or abatement shall be granted pursuant to this article
except under written application filed with and approved by the Borough
Tax Assessor. Every application shall be on a form prescribed by the
Director of the Division of Taxation in the Department of the Treasury
and provided for the use of claimants by the Borough of Chesilhurst
and shall be filed with the Borough Assessor within 30 days, including
Saturdays and Sundays, following the completion of the improvement,
conversion alteration or construction and/or issuance of a certification
of occupancy, whichever occurs first. Every application for exemption
or exemption and abatement which is filed within the time specified
shall be approved and allowed by the Assessor and governing body to
the degree that the application is consistent with the provisions
of the adopting ordinance or the tax agreement, provided that the
improvement, conversion alteration or construction for which the application
is made qualified as an improvement, a conversion alteration or construction
pursuant to the provision of this article and the tax agreement, if
any. The granting of an exemption or exemption and abatement or tax
agreement shall be recorded and made a permanent part of the official
tax records of the Borough, which record shall contain a notice of
the termination date thereof.
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 tax bills to each owner of property located
in an area in which exemptions or exemptions and abatements may be
allowed pursuant to this article during the first year following adoption
of the chapter.
A.
The Tax Assessor shall report, on or before September 1 of each year,
to the Mayor and Council as to the total amount of real property taxes
exempted and the total amount abated within the Borough in the current
tax year under this article.
B.
The report shall state, for the current tax year, the total amount
of payments made in lieu of taxes according to the formula utilized
by the Borough and the difference between that total amount and the
total amount of the real property taxes which would have been paid
on the project had the tax agreement not been in effect.
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 pursuant to N.J.S.A.
40A:21-4. No application for exemptions or abatements shall be filed
for exemptions or abatements to take initial effect after December
31, 2014, unless an ordinance allowing such exemption or abatement
is readopted by the governing body before that date. 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.
