[Amended 1-28-2014 by Ord. No. 3-2014]
As used in this article, the following terms shall have the meanings indicated:
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 article.
ANNUAL PERIOD
A duration of time comprised of 365 days, or 366 days when the included month of February has 29 days, that commences on the date that an exemption or abatement for a project becomes effective pursuant to N.J.S.A. 40A:21-16.
AREA IN NEED OF REHABILITATION
A portion or all of a municipality 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.), a "blighted area" as determined pursuant to the Blighted Areas Act, P.L. 1949, c. 187 (N.J.S.A. 40:55-21.1 et seq.),[1] or which has been determined to be in need of rehabilitation pursuant to P.L. 1975, c. 104 (N.J.S.A. 54:4-3.72 et seq.), P.L. 1977, c. 12 (N.J.S.A. 54:4-3.95 et seq.), or P.L. 1979, c. 233 (N.J.S.A. 54:4-3.121 et seq.).[2]
ASSESSOR
The officer of a taxing district 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 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 unless the total square footage of the floor area of the structure or part thereof used or to be used by the business at the new site together with the total square footage of the land used or to be used by the business at the new site exceeds the total square footage of that utilized by the business at its current site of operations by at least 10% and the property that the business is relocating to has been the subject of a remedial action plan costing in excess of $250,000 performed pursuant to an administrative consent order entered into pursuant to authority vested in the Commissioner of Environmental Protection under P.L. 1970, c. 33 (N.J.S.A. 13:1D-1 et seq.); the Water Pollution Control Act, P.L. 1977, c. 74 (N.J.S.A. 58:10A-1 et seq.); the Solid Waste Management Act, P.L. 1970, c. 39 (N.J.S.A. 13:1E-1 et seq.); and the Spill Compensation and Control Act, P.L. 1976, c. 41 (N.J.S.A. 58:10-23.11 et seq.).
COMPLETION
Substantially ready for the intended use for which a building or structure is constructed, improved or converted.
CONDOMINIUM
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.).
CONSTRUCTION
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 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 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.
COOPERATIVE
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.
COST
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.
DWELLING
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, P.L. 1963, c. 168 (N.J.S.A. 46:8A-1 et seq.), or the Condominium Act, P.L. 1969, c. 257 (C:46:8B-1 et seq.), or of a cooperative, if the residential units are owned separately.
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 article.
HORIZONTAL PROPERTY REGIME
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.).
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 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.
INVESTOR-OWNED
Ownership of a dwelling or other property that is not defined as an owner-occupied dwelling.
MULTIPLE DWELLING
A building or 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.
OWNER-OCCUPIED
A dwelling owned by a person or persons having at least a fifty-percent interest in a one- to three-unit dwelling property that constitutes his, her or their principal residence.
[1]
Editor's Note: N.J.S.A. 40:55-21.1 et seq. was repealed by L. 1992, c. 70, § 59.
[2]
Editor's Note: N.J.S.A. 54:4-3.72 et seq., 54:4-3.95 et seq. and 54:4-3.121 et seq. were repealed by L. 1991, c. 441, § 22, effective 1-18-1992.
The following procedures shall govern agreements for tax exemption with property owners as may be authorized by the City Council:
A. 
Application. No exemption shall be granted except upon written application therefor filed with and approved by the Tax Assessor of the City of Hackensack.
B. 
Form. Every application shall be on a form prescribed by the Director of the Division of Taxation in the New Jersey Department of the Treasury and shall be filed with the Tax Assessor within 30 calendar days following the completion of the improvement, conversion, alteration or construction. Applications for exemption from taxation for construction of industrial and commercial structures or multiple dwellings, or both, shall also comply with the requirements of § 153-12 hereof.
C. 
Recordation. The granting of an exemption or approval of a tax agreement shall be recorded in the Tax Collector's office and made a permanent part of the official tax records of the City of Hackensack, which record shall contain a notice of the termination date thereof.
D. 
Rehabilitation areas only. Applications may be received and granted only with respect to property which is located in an area which has been designated and remains within an area in need of rehabilitation in accordance with applicable law and, for this article, which are the subject of the application and which conform to the provisions of the City's Zoning Ordinance[1] as to the district wherein the structure is located.
[1]
Editor's Note: See Ch. 175, Zoning.
E. 
Prior tax abatements. This article shall not affect any exemption, abatement, or tax agreement previously granted and in force prior to the adoption of this article.
F. 
Effective date. Exemptions granted pursuant to this article shall be effective for the first full tax year commencing after the tax year in which this article is adopted and for tax years thereafter as set forth in P.L. 1991, c. 441 (N.J.S.A. 40A:21-1 et seq.). No application for exemption shall be filed for an exemption to take effect for the tax year 2025 or any tax year occurring thereafter, unless the ordinance codified in this chapter is readopted by the City Council in accordance with applicable law.
G. 
Taxes affected. The exemption of real property taxes provided pursuant to this chapter 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.
H. 
Additional improvement. Any additional improvement, conversion or construction, completed on a property granted a previous exemption pursuant to this article during the period in which such previous exemption is in effect, shall be qualified for an exemption, just as if such property had not received a previous exemption. In such case, the additional improvement, conversion or construction shall be considered as separate for the purposes of calculating exemptions 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 on which any additional exemption is to be calculated. Unless provided by ordinance, no additional exemption shall be allowed.
I. 
Ineligibility. No exemption shall be granted, or tax agreement entered into, pursuant to this chapter, with respect to any property for which property taxes are delinquent or remain unpaid or for which penalties for nonpayment of taxes are due.
J. 
Tax on land: credit. Any exemption approved pursuant to this article shall affect only the tax on improvements. The tax on land shall not be affected by any such approval; provided, however, that there shall be credited against the annual service charge the full amount of taxes paid on the land within the project during the preceding calendar year. Notwithstanding such credit, in no year for which the tax agreement is in effect shall the total of the amount payable as taxes on land and as annual service charge be less than the total of taxes paid on the land within the project for the calendar year preceding the tax agreement.
Applicants approved by the Tax Assessor for projects pursuant to § 153-12 herein shall enter a tax agreement with the City. The tax agreement shall be approved by ordinance authorizing execution of a tax agreement for the abatement of the particular project from local real property taxes. All tax exemption agreements hereunder shall be in effect for a period of not more than five years starting with the date of completion of the project as evidenced by the issuance of a temporary or permanent certificate of occupancy.
A. 
Rehabilitation. There may be granted, pursuant to this chapter, the exemption from taxation of improvements to various types of existing dwellings which undergo rehabilitation.
(1) 
Rehabilitation of owner-occupied one- to three-unit residential dwellings. In determining the value of real property in which there are one to three residential units and at least one of said units is owner-occupied and for which exemption is granted, the City shall regard the first $50,000, 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.
(2) 
Rehabilitation of investor-owned one- to three-unit residential dwellings. In determining the value of real property in which there are one to three residential units and the property is investor-owned and for which exemption is granted, the City shall regard the first $50,000, 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.
(a) 
In order to be eligible for this exemption, the investor-owner must invest an amount equal to or greater than 50% of the assessed value of the dwelling unit primarily and directly affected.
(b) 
Rehabilitation of investor-owned dwellings that increase the legal occupancy of the dwelling shall not be eligible for an exemption.
B. 
New construction. There may be granted, pursuant to this chapter, an exemption from taxation of improvements to various types of newly constructed dwellings, including conversion of buildings previously used for nonresidential use and unutilized public buildings converted to residential use.
(1) 
New construction, owner-occupied. Thirty percent of the Assessor's full and true value of the dwelling constructed or converted may be regarded as not increasing the value of the property for up to five years.
(2) 
New construction, investor-owned. Zero percent of the Assessor's full and true value of the dwelling constructed or converted may be regarded as not increasing the value of the property for up to five years.
There may be granted, pursuant to this chapter, the exemption from taxation of improvements to multiple dwellings or of conversions of other buildings and structures, including unutilized public buildings, to multiple dwelling use, or both. In determining the value of such real property, the Assessor's full and true value of the improvements or conversion alterations shall be regarded 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 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.
A. 
The rehabilitation of a multiple dwelling shall not be eligible for the exemption from taxation of improvements unless the owner documents the minimum investment of $40,000 in the rehabilitation of each dwelling unit.
B. 
Rehabilitation and improvement costs may include rehabilitation or improvements made directly to the unit and a share of rehabilitation and improvement costs made to common areas. The share of rehabilitation and improvement costs for common areas shall be calculated as follows:
(1) 
Cost of common area improvements divided by the total square footage of the units in the building(s) equals common area costs per square foot (CAC/SF).
(2) 
CAC/SF multiplied by the square footage of the unit equals unit share of CAC.
(3) 
Unit share of CAC plus direct rehabilitation and improvement costs equals total rehabilitation and improvement cost.
A. 
There may be granted pursuant to this article exemption from taxation of improvements to commercial or industrial structures. In determining the value of real property for which such exemption is granted, the Assessor's full and true value of the improvements shall be regarded 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.
B. 
The rehabilitation of a commercial or industrial structure shall not be eligible for the exemption from taxation of improvements unless the owner documents the minimum investment of $10 per square foot of floor area of the structure in the rehabilitation of the structure.
The following procedures are applicable to all applications for exemption affecting construction of industrial and commercial structures or multiple dwellings, or both.
A. 
Applicants for tax exemption for new construction of commercial or industrial structures or multiple dwellings pursuant to this chapter shall provide the Tax Assessor with an application setting forth:
(1) 
A general description of a project for which exemption is sought;
(2) 
A legal description of all real estate necessary for the project;
(3) 
Plans, drawings and other documents as may be required by the Tax Assessor to demonstrate the structure and design of the project;
(4) 
If the project is a commercial or industrial structure or a mixed-use project containing commercial or industrial elements, a description of the estimated number, classes and type of employees to be employed at the project site within two years of completion of the project;
(5) 
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;
(6) 
Estimates of the cost of completing such project; and
(7) 
A statement showing:
(a) 
The real property taxes currently being assessed at the project site;
(b) 
Estimated tax payments that would be made annually by the applicant on the project during the period of the agreement; and
(c) 
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;
(8) 
If the project is a commercial or industrial structure, a description of any lease agreements between the applicant and proposed users of the project, and a history and description of the users' businesses;
(9) 
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; and
(10) 
Such other pertinent information as the governing body may require.
B. 
Upon adoption of an ordinance authorizing a tax agreement or agreements for a particular project or projects, the City Council shall enter into written tax agreement with the applicant for the exemption of local real property taxes. Such agreement shall provide for the applicant to pay to the City 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:
(1) 
Cost basis. The tax agreement may provide for the applicant to pay to the City 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 City Council by an independent and qualified architect, following the completion of the project.
(2) 
Gross revenue basis. The agreement may provide for the applicant to pay to the City 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.
(3) 
Tax phase-in basis. The agreement may provide for the applicant to pay to the City in lieu of full property tax payments an amount equal to a percentage of taxes otherwise due, according to the following schedule:
(a) 
In the first full tax year after completion, no payment in lieu of taxes otherwise due.
(b) 
In the second tax year, an amount not less than 20% of taxes otherwise due.
(c) 
In the third tax year, an amount not less than 40% of taxes otherwise due.
(d) 
In the fourth tax year, an amount not less than 60% of taxes otherwise due.
(e) 
In the fifth tax year, an amount not less than 80% of taxes otherwise due.
C. 
The following shall apply to all tax agreements entered into pursuant to this chapter:
(1) 
Any tax agreement entered into by the City pursuant to this section shall be in effect for no more than the five full tax years next following the date of completion of the project.
(2) 
Any project 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.
(3) 
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 under the tax 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 City for determining equalization for county tax apportionment and school aid during the term of the tax agreement covering the property, and at the termination of an agreement for a property, the reduced valuation procedure required under this section shall no longer apply.
(4) 
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 New Jersey Department of Community Affairs.
D. 
As to any tax payment due upon termination of an agreement or upon disqualification of a property owner prior to termination of an agreement, the following shall be applicable:
(1) 
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 City Council 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.
(2) 
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 tax agreement shall remain in effect. The property owner shall furnish such information as the City may require in order to determine whether such exemption shall continue.
(3) 
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.
Every application for exemption which is filed within the time specified shall be approved and allowed by the Tax Assessor to the degree that the application is consistent with the provisions of this chapter or the tax agreement, provided that the improvement, conversion alteration or construction for which the application is made qualifies as an improvement, a conversion alteration or construction pursuant to the provisions of this chapter and the tax agreement, if any. The granting of the exemption or tax agreement shall be recorded and made a permanent part of the official tax records of the City, which record shall contain a notice of the termination date thereof.
Determination of tax due upon completion of improvement, conversion or construction; Assessor's responsibilities; administrative provisions.
A. 
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 incorporating one of the formulas contained in § 153-12 of 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, 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 the adopting ordinance, the property shall continue to be treated in the appropriate manner for each of the five full tax years subsequent to the original determination by the Assessor.
B. 
The Tax Assessor and/or the Tax Collector shall, during the first year following adoption of the ordinance codified in this chapter, include an appropriate notice in the mailing of annual property tax bills to each owner of a dwelling located in an area in which exemptions may be allowed pursuant to this chapter.
C. 
Report.
(1) 
The City Council shall report, on or before October 1 of each year, to the Director of the Division of Local Government Services in the New Jersey Department of Community Affairs and to the Director of the Division of Taxation in the New Jersey Department of the Treasury, the total amount of real property taxes exempted and the total amount abated within the City in the current tax year for each of the following:
(a) 
Improvements of dwelling;
(b) 
Construction of dwellings;
(c) 
Improvements and conversions of multiple dwellings;
(d) 
Improvements of commercial or industrial structures;
(e) 
Construction of multiple dwellings under tax agreements; and
(f) 
Construction of commercial or industrial structures under tax agreements.
(2) 
In the case of this § 153-14C(1)(e) and (f) above, the report shall state instead the total amount of payments made in lieu of taxes according to each formula utilized by the City, and the difference between the total amount and the total amount of real property taxes which would have been paid on the project had tax agreements not been in effect, for the current tax year. The annual report required by this section shall be prepared by the Tax Assessor.
The City shall include a notice in the mailing of annual property tax bills to each owner of a dwelling located in an area in which exemptions, or exemptions and abatements, may be allowed pursuant to the ordinance during the first year following the adoption of the ordinance.
Pursuant to N.J.S.A. 40A:21-4, this article shall be effective for a period of 10 years from the date of adoption, and no application for an exemption shall be filed for an exemption to take initial effect for any year thereafter, until and unless this article is readopted by the City in accordance with applicable law.
A. 
On or before October 1 of each year, the City shall report 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 City 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 of commercial or industrial structures;
(5) 
Construction of multiple dwellings under tax agreements; and
(6) 
Construction of commercial or industrial structures under tax agreements.
B. 
In the case of Subsection A(5) and (6), the report shall state instead the total amount of payments made in lieu of taxes according to each formula utilized by the City, and the difference between that 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.