[Adopted 6-25-2015 by Ord. No. 15-2015[1]]
A.
The intention of this article is to effectuate and accomplish the
purposes authorized by N.J.S.A. 40A:21-1 et seq., which permits municipalities
to adopt an ordinance setting forth the eligibility or noneligibility
to grant for periods of five years exemptions from taxation within
the City-wide area in need of rehabilitation.
B.
The intended purpose of this article is to:
(1)
Promote the improvement, rehabilitation and/or construction of single-family
residential dwelling, multiple-family dwellings, cooperatives and
condominiums, commercial structures, industrial structures and mixed-use
structures within the City of Somers Point.
(2)
Improve property values.
(3)
Foster civic beauty.
(4)
Protect and enhance the City's attractions to residents, tourists
and visitors and to serve as a support and stimulus to business and
industry.
(5)
Assist and encourage property owners and prospective purchasers in
to achieve the goals established by the City Council and City Planning
Board through adoption of the City's Vision Plan and Master Plan.
A.
The City Council of the City of Somers Point (the "City Council")
hereby determines to utilize the authority granted under Article VIII,
Section I, Paragraph 6, of the New Jersey Constitution to establish
the eligibility of residential dwellings, multiple dwellings, condominiums
and cooperatives, commercial and industrial structures for exemptions
permitted by P.L. 1991, c. 441 (See N.J.S.A. 40A:21-1 et seq.), throughout
areas designated, or to be designated, as in need of redevelopment.
B.
The City Council hereby authorizes and establishes a policy whereby
it shall accept, review and consider an application, submitted in
accordance herewith, for tax exemptions pursuant to applicable law
for improvements and new construction within the area designated as
an area in need of rehabilitation by the City Council.
C.
This article does not commit or require the City to approve any application
for a tax agreement submitted in accordance herewith. In considering
each such application for a tax exemption agreement, the City shall
consider, in part, the benefits of the development project for the
City and the impact of any tax exemption requested on the budget of
the City.
This article authorizes the City of Somers Point to grant exemptions
to commence and take effect in the 2015 tax year and thereafter.
A.
The definitions contained in N.J.S.A. 40A:21-3 are incorporated herein
by reference as if set forth at length. As used in this article, words
shall have the meanings as so defined unless a different meaning is
expressed.
B.
ABATEMENT
ANNUAL PERIOD
CONDOMINIUM
CONSTRUCTION
COOPERATIVE
DWELLING
EXEMPTION
HORIZONTAL PROPERTY REGIME
IMPROVEMENT
MIXED-USE STRUCTURE
MULTIPLE DWELLING
PROJECT
Defined terms.
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. No application for abatement will be accepted or granted under
the terms of this article.
A duration of time comprising 365 days, or 366 days when
the included month of February has 29 days, that commences on the
date that an exemption for a project becomes effective pursuant to
Section 16 of P.L. 1991, c. 441 (N.J.S.A. 40A:21-16).
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.).
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.
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.
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 (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 structure with two or more different uses such as, but
not limited to, residential, commercial, or industrial.
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.
The construction, improvement or conversion of a structure
in an area in need of rehabilitation that would qualify for an exemption,
pursuant to P.L. 1991, c. 441 (N.J.S.A. 40A:21-1 et seq.).
A.
Improvements to residential dwellings.
(1)
There shall be an exemption from taxation of improvements to residential
dwellings, single units of existing cooperatives and condominiums,
and single-family existing residential units situated in mixed-use
dwellings (if separately taxed for real estate tax purposes) more
than 20 years old. In determining the value of real property, the
City shall regard the first $25,000 in the Assessor's full and true
value of improvements for each dwelling unit primarily and directly
affected by 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 dwelling through
action of the elements sufficient to warrant a reduction.
(a)
In order to be eligible to make application for the exemption under Subsection A(1), the Assessor's full and true value of improvements must be in excess of the $25,000 threshold for each dwelling unit.
(b)
Excluded from the exemption is the repair of fire or other damage
to 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. In the event,
however, that the Assessor's full and true value of the improvement
results in at least a $25,000 increase over the assessed value of
the property prior to the fire or other damage to the property, an
application may be submitted for an abatement of $25,000 of such added
assessment.
(2)
Phase-in schedule.
(a)
There may be an exemption of a portion of the assessed valuation
of construction of new one- and two-family residential dwellings.
In determining the value of the real property construction, the City
shall consider 30% of the Assessor's full value of the dwelling constructed
as not increasing the value of the property for a total of five years
subject to the schedule set forth below, notwithstanding that the
value of the property upon which the construction or conversion occurs
is increased thereby.
(b)
The phase-in schedule is:
[1]
In the first full year (365 days) after certified completion,
30% of the tax assessor's full and true value of the new dwelling.
[2]
In the second year, 25% of the tax assessor's full and true
value of the new dwelling.
[3]
In the third year, 20% of the tax assessor's full and true value
of the new dwelling.
[4]
In the fourth year, 15% of the tax assessor's full and true
value of the new dwelling.
[5]
In the fifth year, 10% of the tax assessor's full and true and
full value of the new dwelling.
(4)
Any exemption pursuant to § 228-16A(3) shall be submitted by the Tax Assessor to the City Council for approval by resolution upon recommendation by the Tax Assessor and the City Administrator after giving due consideration to the impact upon the tax rolls and annual budget.
B.
Improvements to commercial structures, industrial structures, mixed-use
development structures, and multiple dwellings, including any multifamily
structures, condominiums and cooperatives.
(1)
There may be an exemption from taxation of improvements to commercial
structures, industrial structures, mixed-use structures and multiple
dwelling structures including condominiums and cooperatives.
(2)
Any applicant seeking a tax exemption shall make application to Tax Assessor, which shall be subject to approval by the governing body pursuant to § 228-17 of this article. An application for exemption pursuant to this subsection may be approved after review and evaluation by the governing body and shall be subject to a tax agreement in compliance with § 228-18 of this article.
(3)
Excluded from the exemption, if granted, shall be the repair of fire
or other damage to 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.
C.
New construction of commercial structures, industrial structures,
and mixed-use development structures, condominiums and cooperatives.
The City Council is hereby authorized, at its discretion, to enter
into tax agreements for an exemption from taxation of new construction
of commercial structures, industrial structures and mixed-use structures
located within the ANR area designated by the City in accordance with
N.J.S.A. 40A:12A-1, et seq., the Local Redevelopment and Housing Law,
and other New Jersey Statutes.
A.
Applicants for tax exemption pursuant to § 228-16A(1) shall submit an application on Form E/A-1 within 30 days, including Saturdays and Sundays, following the completion of the improvement as defined in N.J.S.A. 40A:21-3.
B.
Prior to the commencement of construction, applicants for tax exemption under § 228-16A(3) shall provide a preliminary application to the Somers Point Tax Assessor who shall then present the application to City Council using the state-approved application form.
C.
Prior to the commencement of construction, applicants for tax exemption for new construction of or improvements to commercial structures, industrial structures, mixed-use structures, condominiums and cooperatives pursuant to § 228-16B and C shall provide a preliminary application to the Somers Point Tax Assessor, who shall then present the application to City Council using the state-approved application form together with the following information:
(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 governing
body to demonstrate the structure and design of the project.
(4)
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.
(6)
Estimates of the cost of completing such project.
(7)
A statement showing the:
(a)
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)
A copy of any actual or proposed lease (or a detailed description
of any lease agreement intended to be entered into) between the applicant
and proposed users of the project, and a history and description of
the user's business(es);
(9)
A description of any lease agreement between the applicant and proposed
users of the project, and a history and description of the user's
business(es);
(10)
The construction schedule and date of completion;
(11)
A competed application on state-approved Form E/A-1. A separate
application shall be required for each building if more than one building
is to be constructed or if the project involves more than one building
to be built in phases of construction;
(12)
If the project is a cooperative or a condominium, 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;
(13)
Such other pertinent information as the Tax Assessor, City Administrator
or the governing body may require on a case-to-case basis.
D.
Following receipt of the application, the Tax Assessor shall review
each application for completeness and prepare a tax estimate worksheet
and shall provide a copy of the application and tax estimate worksheet
to the City Administrator. The City Tax Assessor shall notify the
City Administrator upon receiving an application as soon as practicable
after filing of an application with the City. All applications shall
be forwarded by the City Administrator to the appropriate staff for
review, including, but not limited to:
E.
Within 60 days of filing of the application, the City Administrator
shall forward a copy of the completed application and review memoranda
to the City Council.
F.
Following receipt of a completed application as set forth above,
the City shall review same to determine whether an exemption for new
construction may be granted following an individual review and evaluation
of each application submitted to the City.
G.
The Tax Assessor may also forward a copy of the completed preliminary
application with the Tax Assessor's worksheet to the Economic Development
Advisory Commission, whereby the applicant will be notified of the
date and time of the next regular meeting. In such event:
(1)
The applicant is required to appear before the Economic Development
Advisory Commission at the scheduled meeting to discuss the application.
(2)
After review and discussion of the application by the Advisory Board
of Economic Development, a letter of recommendation will be forwarded
in writing to the Tax Assessor. The Tax Assessor will forward a copy
of the letter of recommendation to the City Administrator.
The governing body of the City of Somers Point shall enter into a written tax agreement ("PILOT") with an approved § 228-16B and C applicant for the exemption of local property taxes. The agreement shall provide for the applicant to pay 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 authorized by N.J.S.A. 40A:21-10:
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 or improvement. 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 redevelopment 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 5% 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, the Council may authorize
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.
(6)
In the sixth tax year the property will be at 100% of the taxes due.
The authorization to enter into a financial agreement must be
granted by the City Council by ordinance for the particular project.
Any financial agreement shall contain those terms deemed necessary
or desirable by the City and those terms required by the Exemption
Law, including but not limited to:
A.
The applicant shall 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 "Cost Basis Formula," "Gross Revenue Basis
Formula," or "Tax Phase-In Basis Formula," all as defined in the Exemption
Law and incorporated by reference herein as if set forth fully.
B.
All tax exemptions applied for and granted pursuant to the Exemption
Law and this section shall be in effect for a period of no more than
five full years next following the date of completion of the project.
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.
A.
No application for tax exemption 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.
B.
The initial fee schedule is as follows and may be amended from time
to time by a resolution adopted by City Council:
(1)
For improvements to non-multiple-family residential property: $100.
(2)
For improvements to multiple-family dwellings: $100 per dwelling
unit.
(3)
For new residential construction: 1% of the estimated cost of construction.
(4)
For commercial, industrial, condominium, cooperative and mixed-use
new construction or improvements: 1.5% of the estimated cost of the
construction or improvement.
The following procedure shall be applied to applications for
exemption:
B.
When effective.
(1)
For properties subject to a PILOT agreement, the exemption commences
on January 1 of the tax year following project completion. Additional
value exceeding the exempt amount will become subject to the added
assessment at completion.
(2)
For properties which are not required to enter into a PILOT agreement,
the exemption becomes effective immediately upon completion of the
project and continues for five annual periods (365 days, or 366 days
when the included month of February has 29 days) from that date.
(3)
Any added assessment not exempted or prorated shall be added as an
assessment immediately upon completion, and shall be prorated for
any partial tax year.
C.
All tax agreements entered into pursuant to this article shall be
in effect for no more than the five full tax years next following
the date of completion of the project. This article shall not preclude
the governing body from entering into a financial agreement for a
tax exemption and/or abatement pursuant to the Long-Term Tax Exemption
Law[2] or any other statute authorizing a tax exemption and/or
abatement for a period longer than five years.
[2]
Editor's Note: See N.J.S.A. 40A:20-1 et seq.
D.
As a condition to granting an exemption, a property owner shall be
required to waive the filing of any tax appeal for the subject property
for the life of the exemption.
The City Clerk, pursuant to N.J.S.A. 40A:21-11, shall forward
a copy of all tax agreements entered into pursuant to this article
to the Director of the Division of Local Government Services in the
Department of Community Affairs within 30 days of the date of execution.
If during any tax year prior to the termination of the tax 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 exemption during any of the years
during which the agreement was in effect, and all such taxes 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 exemption agreement,
the exemption shall continue.
The City of Somers Point hereby determines that an additional
improvement, conversion or construction completed on a property already
granted a previous exemption pursuant to this article during the period
in which the previous exemption is in effect may qualify for an additional
exemption. The additional improvement or construction may be considered
as separate for purposes of calculating the exemption, except that
the assessed value of any previous improvement or construction may
be added to the assessed valuation as it was prior to that improvement
or construction for the purpose of determining the assessed value
of the property for which any additional exemption is to be subtracted.
Any additional exemption must be reviewed and approved by the Tax
Assessor and by City Council.
A.
No exemption shall be granted or tax agreement entered into pursuant
to this article for any property for which property taxes and/or other
municipal charges are delinquent or remain unpaid, or for which penalties
for nonpayment of taxes are due. As a condition to granting an exemption,
a property owner shall be required to waive the filing of any tax
appeal for the subject property for the life of the exemption.
B.
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 for the exemption,
the local property taxes due for all the prior years subject to the
exemption and for the current year shall be payable as if no exemption
had been granted. The Tax Collector of the City of Somers Point shall
notify the property owner within 15 days of the date of disqualification
of the amount of taxes due.
C.
In the event that the subject property shall be transferred to a
new owner prior to the termination of the exemption period, and it
is determined that the new owner will continue to use the property
pursuant to the qualifying conditions, no tax shall be due; the exemption
shall continue and the agreement shall remain in effect.
No exemption shall be granted pursuant to this article except
upon written application therefor filed with the Tax Assessor using
the required form. Every application shall be filed with the Assessor
within 30 days, including Saturdays and Sundays, following the completion
of the improvements, alteration or construction as defined in N.J.S.A.
40A:21-3.
At the termination of an agreement for tax exemption authorized
pursuant to this article, the project shall be subject to all applicable
real property taxes, as provided by state laws and regulations and
local ordinances, provided that nothing herein shall be deemed to
prohibit the project or improvement at the termination of the agreement
for tax exemption or abatement from qualifying for and receiving the
full benefits of any other tax preference provided by law.
Every application for exemption which is filed within the time specified shall be approved and allowed by the Assessor to the degree that the application is consistent with the requirements of this article and the tax agreement executed by the City Council in accordance with §§ 228-18 and 228-19 hereof. 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.
Every application for exemption and every exemption granted
shall be subject to all the provisions of N.J.S.A. 40A:21-1, et seq.,
and all rules and regulations issued thereunder.
All tax exemption agreements shall provide that the applicant
is subject to all federal, state and local laws and regulations.
The percentage which the payment in lieu of taxes bears to the
property taxes 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 apportionment and school aid during the term
of the tax abatement agreement covering the property.
[Amended 12-5-2019 by Ord. No. 16-2019]
This article and the opportunity to apply for tax exemption
shall expire on December 31, 2024, after which no further applications
shall be accepted unless this article shall have been readopted by
City Council in accordance with the Exemption Law.
The Municipal Clerk is hereby authorized and directed to forward
a certified copy of this article to the State of New Jersey Department
of Community Affairs.
Captions contained in this article have been inserted only for
the purpose of facilitating reference to the various sections, and
are not intended and shall not be utilized to construe the intent
and meaning of the text of any section.
Where consistent with the context in which used in this article,
words importing the singular shall include the plural; words importing
the plural shall include the singular; and, words importing one gender
shall include all other genders.
