[Adopted 11-23-1994 by Ord. No. 96-1994]
This article shall be known and may be cited as the "Five-Year
Exemption and Abatement Ordinance."
A.
The City of Atlantic City finds that the various statutes authorized
by Article 8, § 1, Paragraph 6, of the New Jersey Constitution
permitting municipalities to grant for periods of five years exemptions
or abatements, or both, from taxation in areas in need of rehabilitation
have proven to be effective in promoting the construction and rehabilitation
of residential and commercial and industrial structures in areas threatened
with economic and social decline. It is the purpose of this article
to permit the City of Atlantic City the greatest flexibility possible
within the constitutional and statutory limitations to address problems
of deterioration and decay.
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 for taxation pursuant to this
article.
The entirety of the City of Atlantic City which has been
determined to be an area in need of rehabilitation or redevelopment
pursuant to the Local Redevelopment and Housing Law (P.L. 1992, c.
79) (N.J.S.A. 40A:12A-1 et seq.).
The Assessor of the City of Atlantic City who is 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 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 municipality, assist in the economic
development of the municipality, maintain or increase the tax base
of the municipality and maintain or diversify and expand commerce
within the municipality. It shall not include any structure or part
thereof used or to be used by any business relocated from another
qualifying municipality. Any facility containing a licensed gambling
casino is specifically excluded from this definition pursuant to N.J.S.A.
40A:21-18.
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
A property created or recorded as a condominium pursuant
to the Condominium Act, P.L. 1969, c. 257 (N.J.S.A. 46:8B-1 et seq.).
Any facility containing a licensed gambling casino is specifically
excluded from this definition pursuant to N.J.S.A. 40A:21-18.
The provision of a new dwelling, multiple dwelling or commercial
or industrial structure or the enlargement of the volume of an existing
multiple dwelling or commercial industrial structure by more than
30%, but shall not mean the conversion of an existing building or
structure to another use.
The alteration or renovation of a nonresidential building
or structure or hotel, motel, motor hotel or guesthouse in such manner
as to convert the building or structure from its previous use to use
as a dwelling or multiple dwelling.
A housing corporation or association, wherein the holder
of a share or membership interest thereof is entitled to possess and
occupy for dwelling purposes a house, apartment or other unit of housing
owned by the corporation or association or to purchase a unit of housing
owned by the corporation or association.
When used with respect to abatements for dwellings or multiple
dwellings, only the cost or fair market value of direct labor and
materials used in improving a multiple dwelling, or of converting
another building or structure to a multiple dwelling, or of constructing
a dwelling or of converting another building or structure to a dwelling,
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 of
such horizontal property regime or condominium as defined pursuant
to the Horizontal Property Act, P.L. 1963, c. 168 (N.J.S.A. 46:8A-1
et seq.) or the Condominium Act, P.L. 1969, c. 257 (N.J.S.A. 46:8B-1
et seq.) 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 article.
A property submitted to a horizontal property regime pursuant
to the Horizontal Property Act, P.L. 1963, c. 168 (N.J.S.A. 46:8A-1
et seq.).
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 human habitation or work
and which does not change its permitted use. In the case of a multiple
dwelling, it includes only improvements which affect common areas
or elements or three or more dwelling units within the multiple dwelling.
In the case of a multiple dwelling or 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 a structure meeting the definition of "multiple
dwelling" set forth in the Hotel and Multiple Dwelling Law, P.L. 1967,
c. 76 (N.J.S.A. 55:13A-1 et seq.), 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 may be amended from time to time. An amendment shall
not affect any exemption, abatement or tax agreement previously granted
and in force prior to the amendment.
B.
Application for exemptions and abatements from taxation may be filed
pursuant to this article as so adopted.
[Amended 9-22-2004 by Ord. No. 99-2004; 8-9-2006 by Ord. No.
64-2006; 1-24-2007 by Ord. No. 93-2006; 6-9-2010 by Ord. No.
40-2010; 11-19-2014 by Ord. No. 71-2014]
C.
Any application filed for which construction has not begun on the
improvement granted an exemption or abatement therein by or before
December 31, 2012, shall be deemed withdrawn and any exemption or
abatement granted thereunder void. All abatement/exemption agreements
shall include specific language disclosing this limitation.
[Added 8-9-2006 by Ord. No. 64-2006; amended 1-24-2007 by Ord. No.
93-2006; 6-9-2010 by Ord. No. 40-2010]
[Amended 9-22-2004 by Ord. No. 99-2004; 8-9-2006 by Ord. No.
64-2006; 1-24-2007 by Ord. No. 93-2006]
A.
This article provides for the exemption from taxation of improvements
to dwellings. It requires, in determining the value of real property,
that the municipality shall regard the first $25,000 in Assessor's
full and true value of improvements for each dwelling unit primarily
and directly affected by the improvement in any dwelling more than
20 years old as not increasing the value of the property for a period
of up to 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 dwelling through an action of the elements
sufficient to warrant a reduction.
B.
This article does not provide for the abatement of a portion of the
assessed value of property receiving the exemption as it existed immediately
prior to the improvement, construction or conversion, and no such
abatements are therefore authorized.
C.
This article provides for the exemption of some portion of the assessed
valuation of construction of new dwellings and of conversions of other
buildings and structures, including unutilized public buildings, to
dwelling use. In determining the value of real property, the municipality
shall regard 30% of the Assessor's full and true value of the dwelling
constructed or conversion alterations made as not increasing the value
of the property for a total up to five years, notwithstanding that
the value of the property upon which the construction or conversion
occurs is increased thereby. The exemption period shall be five years,
and the annual percentage of the exemption to be granted shall be
30% for each year of the exemption period.
D.
Exemptions pursuant to this section may be approved on a project-by-project
basis in the sole discretion of the Tax Assessor.
E.
This article shall provide for the exemption of taxation of improvements
to dwellings anywhere in the municipality. In determining the value
of real property, the municipality shall regard the first $25,000
in Assessor's full and true value of improvements for each dwelling
unit primarily and directly affected by the improvement in any dwelling
more than 20 years old 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 dwelling through
action of the elements sufficient to warrant a reduction. (NOTE: This
article shall provide for the abatement of some portion of the assessed
value of property receiving exemption as it existed immediately prior
to the improvement. The abatement for the dwelling may be grated with
respect to that property for a total of up to five years, but the
amount of the abatement granted to any single property shall not exceed
50% of the annual amount of the exemption granted under ordinance.)
[Added 9-25-2013 by Ord.
No. 52-2013]
[Amended 9-22-2004 by Ord. No. 99-2004]
A.
This article provides for the exemption from taxation of improvements
to multiple dwellings and of conversions of other buildings and structures,
including unutilized public buildings to multiple-dwelling use. In
determining the value of the real property, the municipality shall
regard up to the Assessor's full and true value of the improvements
or conversion alterations as not increasing the value of the property
for a period of up to five years, notwithstanding that the value of
the property to which the improvements or conversion alterations 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 or conversion alterations unless
there is damage to the multiple dwelling through action of the elements
sufficient to warrant a reduction.
B.
Exemptions pursuant to this section may be approved on a project-by-project
basis in the sole discretion of the Mayor or his designee with the
advice of the Assessor and with the consent of Council acting by resolution
or ordinance.
[Amended 9-22-2004 by Ord. No. 99-2004]
A.
This article provides for the exemption from taxation of improvements
to commercial or industrial structures. In determining the value of
real property, the municipality shall regard up to the Assessor's
full and true value of the improvements as not increasing the value
of the property for a period of up to 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.
B.
Exemptions pursuant to this section may be approved on a project-by-project
basis in the sole discretion of the Mayor or his designee with the
advice of the Assessor and with the consent of Council acting by resolution
or ordinance.
[Added 6-9-2010 by Ord. No. 40-2010]
A.
This article provides for the exemption from taxation for construction
of commercial or industrial structures or multiple dwellings, or both,
according to procedures provided by N.J.S.A. 40A:21-8 and the other
procedures provided by N.J.S.A. 40A:21-8 and the other provisions
of this chapter and article. In determining the value of the real
property, the municipality shall regard up to the Assessor's full
and true value of the improvements or conversion alterations as not
increasing the value of the property for a period of up to five years,
notwithstanding that the value of the property to which the improvements
or conversion alterations 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
or conversion alterations unless there is damage to the multiple dwelling
through action of the elements sufficient to warrant a reduction.
B.
Exemptions pursuant to this section may be approved on a project-by-project
basis in the sole discretion of the Mayor, or his designee, with the
advice of the Assessor and with the consent of Council acting by resolution
or ordinance.
C.
When a developer or owner files a master deed pursuant to N.J.S.A.
46:8b-1 et seq., creating a condominium, whether residential, commercial
or industrial, as to all or a portion of a project which has been
approved by the City Council for tax exemption or abatement and for
which a tax agreement has been executed, each unit of the condominium,
whether owned by the developer or owner or a successor unit purchaser,
shall continue to be subject to the provisions of the tax agreement,
and the tax exemption or abatement previously approved with respect
to property converted to condominium ownership shall be unaffected
by the recording of the master deed or any subsequent deed conveying
the condominium unit and its appurtenant interest in common elements.
The conveyance of a condominium unit which is authorized under any
tax agreement approved by ordinance by the City Council to a bona
fide unit purchaser grantee shall not require the consent or approval
of the municipality, and the grantee shall acquire title to the unit
subject to the requirement for payment of the payment in lieu of full
property tax payments and other provisions of the tax agreement expressly
applicable to condominium unit purchasers, and the exemption from
taxation as to the condominium unit shall continue unaffected by the
transfer, as contemplated by and in accordance with N.J.S.A. 40A:21-12.
[Amended 9-22-2004 by Ord. No. 99-2004]
Applicants for tax exemption for new construction of commercial
or industrial structures or exemption of new construction of multiple
dwellings shall provide the Municipal Assessor with an application
setting forth:
A.
A general description of a project for which exemption 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 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 tax agreement.
H.
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 tax agreement.
I.
If the project is a multiple dwelling, a description of the number
and types of dwelling units to be provided, a description of the common
elements or general common elements and a statement of the proposed
initial rentals or sales prices of the dwelling units according to
type and of any rental lease or resale restrictions to apply to the
dwellings' units respecting low- or moderate-income housing.
J.
Such other pertinent information as the governing body may require.
[Amended 9-22-2004 by Ord. No. 99-2004; 8-9-2006 by Ord. No.
64-2006; 1-24-2007 by Ord. No. 93-2006]
Upon adoption of a resolution or ordinance authorizing a tax agreement for a particular project under § 231-19 or 231-20 of this article, the Mayor shall enter into a written agreement with the applicant for the exemption 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.
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 cost or fair market value
of direct labor and all materials used in the construction, expansion
or rehabilitation of all buildings, structures and facilities 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 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.
B.
Gross revenue basis: the agreement may provide for the applicant
to pay to the municipality in lieu of full property tax payments an
amount annually 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.
C.
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 tax year, an amount not less than 80% of taxes otherwise
due.
A.
All tax agreements entered into by municipalities pursuant to N.J.S.A.
40A:21-9 through 40A:21-12 shall be in effect for no more than the
five full tax years next 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
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 tax apportionment and school
aid during the term of the tax agreements covering the properties,
and at the termination of an agreement for a property, the reduced
valuation procedure required under this section shall no longer apply.
[Amended 9-22-2004 by Ord. No. 99-2004]
D.
Within 30 days after the execution of a tax agreement, the City Clerk
shall forward a copy of the agreement to the Director of the Division
of Local Government Services in the Department of Community Affairs.
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 had been granted.
The governing body of the municipality 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 shall continue, and the
agreement shall remain in effect.
[Amended 9-22-2004 by Ord. No. 99-2004]
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.
[Amended 9-22-2004 by Ord. No. 99-2004]
The 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 N.J.S.A. 40A:21-9 through 40A:21-12, 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 plus any portion of the assessed valuation of the improvement,
conversion or construction not allowed an exemption pursuant to this
article. Subject to the provisions of this article, the property shall
continue to be treated in the appropriate manner for each of up to
the five full tax years subsequent to the original determination by
the Assessor.
[Amended 9-22-2004 by Ord. No. 99-2004]
This article provides that an 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, 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.
[Amended 9-22-2004 by Ord. No. 99-2004]
No exemption 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. For purposes of this section, the existence of a
tax installment agreement shall not be considered; all taxes, penalties
and interest due and owing must be paid in full upon application.
[Amended 9-22-2004 by Ord. No. 99-2004; 8-9-2006 by Ord. No.
64-2006; 1-24-2007 by Ord. No. 93-2006]
In accordance with N.J.S.A. 40A:21-16, no exemption shall be
granted pursuant to this article except upon written application therefor
filed with the Assessor and approved as provided herein by the Mayor
and/or Council. Every application shall be on a form prescribed by
the Director of the Division of Taxation in the State Department of
the Treasury and provided for the use of claimants by the municipal
Assessor, and shall be filed with the Assessor within 30 days, including
Saturdays and Sundays, following the completion of the improvement,
conversion, alteration or construction. For purposes of determining
the time for filing for a single condominium unit within a newly constructed
condominium project, the unit shall be deemed complete upon the earlier
of the date of completion of all common elements of the project or
the date of issuance of a certification of occupancy or temporary
certificate of occupancy to the last unit constructed within the condominium
project as originally approved by the Division of Planning. The granting
of an exemption or tax agreement shall be recorded and made a permanent
part of the official tax records of the taxing district, which record
shall contain a notice of the termination date thereof.
[Amended 9-22-2004 by Ord. No. 99-2004; 8-9-2006 by Ord. No.
64-2006; 1-24-2007 by Ord. No. 93-2006]
The exemption of real property taxes provided pursuant to this
article shall apply to property taxes levied for municipal purposes,
school purposes, county government purposes, special improvement district
purposes and for the purposes of funding any other property tax exemptions.
Notwithstanding any other provisions of this article, no exemption
or abatement or tax agreement shall be allowed with respect to any
facility containing a licensed gambling casino. The issuance of a
casino license shall operate to invalidate any existing exemption,
abatement or tax agreement, and all unpaid taxes otherwise due, were
the exemption, abatement or tax agreement not granted, on the full
and true value of the property shall become immediately due and payable.
N.J.S.A. 40A:21-19 provides that the Commissioner of the Department
of Community Affairs is authorized to determine standards and guidelines
and to promulgate rules and regulations to effectuate the purposes
of the Five-Year Tax Exemption and Abatement Law,[1] and this article is subject to those rules and regulations
and shall be interpreted and applied consistent therewith.
[1]
Editor's Note: See N.J.S.A. 40A:21-1 et seq.
The appropriate notice of the adoption of this article shall
be included in the mailing of annual property tax bills to each taxpayer
during the first year following adoption of this article.
A.
The Mayor shall report, on or before October 1 of each year, to the
Director of the Division of Local Government Services in the Department
of Community Affairs and to the Director of the Division of Taxation
in the Department of the Treasury the total amount of real property
taxes exempted and the total amount abated within the municipality
in the current tax year for each of the following:
(1)
Improvements of dwellings.
(2)
Construction of dwellings.
(3)
Improvements and conversions of multiple dwellings.
(4)
Improvements and commercial or industrial structures.
(5)
Construction of multiple dwellings under tax agreements.
(6)
Construction of commercial or industrial structures under tax agreements.
B.
In the case of Subsection A(5) and (6) above, the report shall state instead the total amount of payments made in lieu of taxes according to each formula utilized by the municipality and the difference between the total amount and the total amount of real property taxes which would have been paid on the project had the tax agreement not been in effect, for the current tax year.
This article shall take effect upon adoption and publication
as provided by law, but in no event prior to January 1, 1995.
