[Ord. 6 S+FI, 2-21-1990 § 10:11A-1]
The chapter herein enacted shall apply to the extension of those
tax abatement agreements affected by the New Jersey Statute entitled,
"An Act to permit the extension of certain exemptions from taxation
in certain cases, amending P.L. 1967 C.114, and amending and supplementing
P.L. C.40 and 1965 C.96," (N.J.S. 40:55C-77, et seq., and N.J.S. 40:55C-40
et seq.). (Hereinafter "Tax Abatement Extension Statute.")
[Ord. 6 S+FI, 2-21-1990 § 10:11A-2]
The City may only grant an extension of the period of tax exemption
based upon an application in the form provided herein for any project
which has an existing tax abatement agreement and whose "Applicant"
and "Entity" is a nonprofit entity pursuant to N.J.S. 40:55C-77 et
seq. which was in force and effect on the date of the enactment of
the Tax Abatement Extension Statute (August 14, 1986). The term "tax
abatement" also means tax exemption. The term "applicant" and "entity"
shall refer to the Urban Renewal entity which has an existing financial
agreement and who is seeking an extension of such financial agreement
pursuant to the provisions of this chapter.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-2[A]]
The City may only grant an extension to an entity pursuant to the requirements of Section 10:25-2 and which will build or cause to be built for its occupancy a new project whose gross square footage will be at least 150% in size of the project for which the extension is requested.
If the proposed project is to utilize the provisions of N.J.S.
40:55C-40 or 40:55C-77 then the project shall abide by all applicable
State Statutes and City Ordinances in effect at the time of the application.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-3]
All such applications shall include at the minimum:
a.
The description of the project to be subject to the new financial
agreement, including:
1.
Area and improvement thereon;
2.
The proper identification of the property by metes and bounds, tax
map block and lot and corresponding street addresses;
3.
An accompanying survey or plotting from the tax map;
4.
The estimated commencement and completion date of the capital improvement;
5.
A copy of the proposed tax abatement agreement for the new project;
6.
A detailed comparison of the proposed project payments in lieu of
taxes, the extension projects estimated real property taxes if returned
to the tax rolls and the payments in lieu of pursuant to the extension.
c.
A statement if applicant is subject to ordinance 6 S+Fr, 2-20-1985[1] entitled, "AN ORDINANCE TO IMPOSE IN THE CITY OF NEWARK,
NEW JERSEY A 6% TAX ON CHARGES FOR THE USE OR OCCUPATION OF ROOMS
IN HOTELS AS AUTHORIZED BY THE 'HOTEL OCCUPANCY TAX ACT'
N.J.S. 40:48E-1 et seq.," setting forth the amount to which the City
is entitled for the current year and the preceding two years, and
stating when, by whom and in what amount, this amount, this obligation
has been paid to the City.
[1]
Editor's Note: Codified as Section 10:20.
d.
True copies of Applicant's annual consolidated report for the
past three years with an accompanying detailed separate explanation
for any loss(es) shown on each consolidated report(s).
e.
If the payment in lieu of taxes is to be based upon 15% of Annual
Gross Rental Income, then a fiscal plan outlining the expected financial
performance of the project for the period of the extension, including:
1.
An itemization of projections of annual gross revenue inuring to
the project from all sources if applicable;
2.
An estimated itemization of expenses for operations and maintenance
if applicable;
3.
The estimated amounts of capital investment to be made during the
period of extension;
4.
The payments for interest and principal on outstanding debt and the
rate charged for all indebtedness with the remaining balance and holder
thereof listed;
5.
The estimated payments of annual service charges, land taxes, payroll
taxes, sewer taxes, parking fees, and hotel occupancy taxes to the
City by the entity and by all tenants of this project; as well as
the extent to which any payment is offset by another payment so that
total payments are less than the sum of payments; and
6.
The itemization of expenses for operation and maintenance to be paid
by tenant(s) as embraced in N.J.S. 40:55C-51 if applicable.
f.
A detailed statement by Applicant of:
1.
The charges imposed upon the entity and upon all tenants of the project
for annual service charges, land taxes, payroll taxes, parking taxes,
sewer taxes, hotel occupancy taxes, and any other taxes levied by
the City, and any penalties or interest imposed thereon for the entire
term of the initial financial agreement. This statement shall show
for each such charge: the nature thereof, the amount thereof, the
date upon which payment was due, the date upon which payment was made,
and the amount paid;
2.
The exact amount of arrears owed to the City, by the entity, any
tenant of the project, or any entity which previously was granted
a tax exemption on the same project;
3.
The same information as required under paragraph 1 above for any
other entity which previously was granted a tax abatement for the
same project.
g.
A description of the use of the project.
h.
Copies of financial statements for the past three years submitted
to the City pursuant to Revised Ordinances, Title 10, Finance and
Taxation, Chapter 24, Procedures for Application, Approval and Administration
of Tax Abatement Agreements.
i.
A general description of the capital improvements to be made to the
project during each of the five year segments of the extended period;
the estimated costs to be expended for such improvements; and the
projected dates when the required investments will be made. Applications
must reveal the date that the required investment for the third five
years segment of the extended periods is to be made, which in no event
shall be made later than the 12th year of the extended period.
j.
The Applicant shall provide any such additional information requested
by the Manager, Division of Tax Abatement and Special Taxes and the
Corporation Counsel that are deemed necessary to fully analyze and
review the application for extension.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-4]
The City shall have the right to obtain an independent certified
public accountant to review the submission made by the Applicant in
connection with its application. The cost of such additional expert
services shall be borne by the Applicant and an estimated cost thereof
shall be paid to the Manager of the Division of Tax Abatement and
Special Taxes upon demand. The failure to pay these costs shall result
in rejection of the application. If the actual cost is different than
the amount demanded, then the underpayment is to be made by the Applicant
or any excess payment is to be returned to the Applicant.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-5]
In addition to the application, the Applicant must submit the
following information:
a.
A disclosure statement in the form obtainable from the City Clerk
revealing all parties, including parent and subsidiary companies,
having an interest in the property and/or the project, as well as
any other tax abatement agreements with the City then in force and
effect, and any other contracts or agreements with the City in which
any of those parties have any interest.
b.
An estimate by the Applicant of the number and type of jobs to be
created by the capital improvements to the project during the extended
term and the number and type of permanent jobs, if any, to be created
by the project within one year after the completion of the capital
improvements.
c.
A certification by the Applicant that the affirmative action plan
submitted with the original tax abatement application complies, currently
with the affirmative action requirements of the City and this shall
be incorporated into the extended agreement by reference thereof.
The Applicant shall further certify that it will in all respects comply
with the affirmative action plan in the future.
d.
The certification of the tax abated entity that the project meets
the requirements of the law of the State for consideration for an
extension of the tax abatements.
e.
The proposed financial agreement shall accompany the application,
as prepared by the Applicant, shall be presented in such form as required
by the Corporation Counsel and consistent with the ordinance of the
City of Newark.
f.
A certification of the developer that construction of the capital
improvements has not commenced nor will it commence prior to the final
approval and execution of an abatement extension agreement between
the City and the entity and the statement that the extension agreement
is specifically contingent upon the start of construction, as evidenced
by building permits and the closing of a construction loan, of the
new project.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-6]
The application shall be submitted to the Mayor not more than
one year and not less than six months before the termination date
of the existing tax abatement as modified, sought to be extended.
Applications shall be submitted in octuplicate with all eight copies
executed in the original by the Applicant. Where the Applicant is
other than an individual person, the signature of the Applicant shall
be certified as to its authenticity and authority by the submission
of a certified corporate resolution, bearing the seal of the corporation
and the signature of the secretary of the corporation, or similar
bona fide evidence.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-7; Ord. 6PSF-A(S), 1-7-2016]
a.
Application Fee. No application for an extension of the period tax
abatement submitted pursuant to this chapter shall be accepted unless
it is accompanied by full payment of the required application fee.
Such fee shall be in the form of a certified check payable to the
City of Newark in the amount of $2,000 for all projects whose appraised
value is less than $1,000,000 and $5,000 for all other projects. These
fees shall be received by the City as compensation for the legal review
and related work of the City's development and agencies and is
not returnable should the application be denied by either the Administration
or Municipal Council.
b.
Submission. All applications pursuant to this chapter shall be submitted
to the Mayor, either in person or by certified mail, at his office.
The Mayor shall thereupon transmit the application, together with
the application fee, to the Tax Collector for processing.
c.
Consideration and Approval or Disapproval. The procedures for the
consideration and approval or disapproval of applications pursuant
to this chapter shall be the same as those procedures required for
the consideration of applications for tax abatements pursuant to Title
X, Finance and Taxation, Chapter 24, Procedures for Application, Approval
and Administration of Tax Abatement Agreements, of the Revised General
Ordinances of the City of Newark, hereinafter referred to as the tax
abatement ordinance with the following exceptions:
1.
The Tax Assessor shall not be required to provide the certification required under Section 10:24-4c,3 of the tax abatement ordinance, but shall be required to submit a certification as to tax assessments for land and improvements in effect at the time of original application for tax abatement for each tax lot included within the project.
2.
The Tax Collector shall not be required to provide the certification required under Section 10:24-4c,5 of the tax abatement ordinance but shall be required to submit a certification as to the taxes levied on the real property included within the project in which the original application for tax abatement was filed and the immediately preceding year.
3.
The Secretary to the Board of Adjustment shall not be required to provide the certification required under Section 10:24-4d,11 of the tax abatement ordinance but shall be required to submit a certification that the proposed capital improvements conform to Title XLI, Zoning and Land Use Regulations of the Revised General Ordinances of the City, and that the construction of the proposed capital improvements will not require any prior action by the Zoning Board of Adjustment.
4.
The following certifications shall be submitted to the Corporation Counsel in addition to those required under Section 10:24-4c of the tax abatement ordinance:
(a)
Certification of the Director of the Department of Public Safety
as to the status of any licenses and payments due for licenses or
permits for any activity conducted on the real property within the
project for which he has the responsibility to issue licenses or permits
and on any activity for which the Alcoholic Beverage Commission has
the responsibility to issue licenses.
(b)
Certification of the Director of Health and Human Services as
to the status of any licenses or permits for any activity conducted
on the premises.
(c)
Certification of the Tax Assessor as to the value at which he/she
will assess the property if the extension is not approved.
(d)
Certification of the Manager, Division of Tax Abatement and
Special Taxes that the financial projections provided in the application
are internally consistent and consistent with the financial reports
submitted pursuant to the tax abatement ordinance.
(e)
Certification of the Budget Officer of the impact of the proposed
extension on the revenues the City can anticipate during the period
of the proposed extension and a recommendation to the Mayor on proposed
tax increases or expenditure reductions to be made during the term
of the extension sufficient to offset the reduction in revenue.
(f)
Certification by the Division of Tax Abatement and Special Taxes that the information contained in the application as required by Section 10:25-4f is correct.
(g)
Certification by the Affirmative Action Officer that he/she has examined the documentation purporting to support the table required under Section 10:25-6, and that he/she is satisfied with the accuracy of the estimates.
(h)
Certification by the Affirmative Action Officer, where available,
that all affirmative action requirements imposed by the City during
the construction of the project were complied with, that all projects
constructed by related entities also complied with all affirmative
action requirements imposed by the City, and that if the project is
currently under construction by a related entity, the project is in
full compliance with all affirmative action requirement of the City.
(i)
Certification by the Finance Director that all information submitted by the entity pursuant to Section 10:25-4 is complete and accurate.
(j)
Certification of the Affirmative Action Officer that the proposed
affirmative action plan submitted pursuant to Section 10:25-6(c) complies
with the affirmative action requirement of the City.
(k)
Certification of the Director of the Division of Billing and
Customer Service as to the status of payments due for water or sewer
services provided to any real property within the City in which any
related entity, or any party appearing on the disclosure statement
obtainable from the City Clerk has an interest.
(l)
Certification by the Manager, Division of Tax Abatement and
Special Taxes as to the number employed at the real property encompassed
by the project for whom payroll taxes were paid to the City, for each
quarter during the five years immediately preceding the date of application.
5.
The Corporation Counsel shall deem no application proper for which
all certifications have not been received, which contains an inaccuracy,
which requires an action by the Zoning Board of Adjustment or the
Central Planning Board in order to be carried out, or which does not
indicate that all conditions of the original application for abatement
have been met.
6.
Within 30 days after the receipt of an application and proposed new
financial agreement deemed to be complete and proper as to form and
legality by the Corporation Counsel, the Mayor shall submit it with
his recommendations to the Municipal Council.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-8]
a.
Quinary Capital Investment Requirement. No application for an extension
shall be approved unless the application shall provide that the entity
shall, during the extended period, invest in capital improvements
to the project in an amount equal to not less than 5% of total project
cost during each five year segment of the extended period, except
that the investment for the third five year segment of the extended
period shall be made no later than the twelfth year of the extended
period.
b.
Certified Financial Audit. Every capital improvement undertaken pursuant
to the provisions of this section shall be required to submit to the
City a certified financial statement as to its cost, no later than
90 days after its completion. This statement shall be submitted to
the Manager of the Division of Tax Abatement and Special Taxes who
shall issue a certification to the Mayor and the Corporation Counsel
that the project has met or failed to meet its requirement. If the
Entity has failed to meet this requirement, a recommendation of termination
shall be made to the Mayor and the Municipal Council. As used in this
section the term "completion of a capital improvement" means the date
on which the Enforcing Agency pursuant to N.J.S. 52:27D-119 et seq.
determines the capital improvement to have been completed.
c.
Calculation of the Capital Improvement. The term "Cost of capital
improvement," as used in this section, means the aggregate total of
the following items: (1) all fees paid or due to architects, engineers
and attorneys by the entity for any work in connection with the capital
improvements; (2) all surveying and testing charges associated with
the capital improvement; (3) all actual costs of the construction
of the capital improvement, as certified to by the architect responsible
for supervising the construction, including but not limited to all
aspects of site preparation as well as all aspects of the construction
of the actual capital improvement; (4) all costs of insurance, financing
and interest incurred in relation to the capital improvement; and
(5) the developer's overhead, calculated at the rate of 5% of
the aggregate total of the amounts reported and certified pursuant
to subsections (1) through (4) of this section.
d.
Prohibition Against Commencement Prior to the Granting of the Tax
Extension. No capital improvement shall be deemed to have been made
during the extended period if the permit for the improvement was issued
by the Enforcing Agency pursuant to N.J.S. 52:27D-119 et seq. prior
to the date on which the extension, granted by the City shall commence.
e.
Payment of All Outstanding Financial Obligations to the City. Notwithstanding
any provisions to the contrary, no application may be considered or
approved for any project if the Tax Collector or the Manager of the
Division of Tax Abatement and Special Taxes provides certification(s)
that there exist any financial arrears or other outstanding financial
obligation to the City for the project seeking tax extension.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-9]
Agreements under this chapter shall be governed by N.J.S. 40:55C-67.1,
and 40:55C-99.1 et seq. and the tax abatement ordinances of the City
of Newark. Such extension shall be granted at the sole discretion
of the City of Newark and shall be for a maximum period of 15 years,
commencing on the day following the termination of the financial agreement
in force and effect on the date of the enactment of N.J.S. 40:55C-67.1,
40:55C-99.1 et seq. (August 14, 1986). At the conclusion of that period
of extension, no further extension shall be granted. The City Council
shall by resolution approve or disapprove the application and authorize
the City's entry and execution of the financial agreement.
In the event of disapproval, the Municipal Council may suggest
changes it may deem necessary in order to secure its approval. An
application may be revised and resubmitted in accordance with the
provisions of this chapter, at no additional cost to the Applicant.
a.
Form of Agreement. All agreements for tax abatements shall be consistent
with the requirements of N.J.S. 40:55C-67.3 and 40:55C-99.1. The agreements
shall be in the form appropriate to the nature of the abatement and
the nature of the developer as filed with the City Clerk at the time
of the adoption of this chapter. Such agreements shall at a minimum
set forth the identification of the affected property, the nature
and magnitude of the improvements to be constructed thereon, the consideration
to be paid to the City and the conditions thereon, the duration of
the agreement and the grounds for its termination. The agreements
shall in all cases further provide that any change made in the ownership
of the project or which would materially change the terms of the agreement
shall void the agreement unless such change has been approved by resolution
of the Municipal Council. The agreements shall require the timely
submission of certified audits of the cost of construction and of
the annual financial operations of the project, and shall require
timely payment of all municipal taxes, fees and charges arising out
of the agreement or in any way arising out of the affected property.
The agreement shall provide that the failure to comply with the requirements
of audit and payment, or with any substantive condition of the Agreement,
shall permit the City to unilaterally terminate the agreement, and/or
to exercise such other remedies as may be provided by statute, this
chapter or the agreement. The agreement shall contain such other information
as required by the Corporation Counsel.
b.
Execution of Agreements. Upon authorization by the Municipal Council,
it shall be the responsibility of the City Clerk to insure that the
agreement is fully executed. No agreement shall be considered to be
in force and effect unless and until it has been signed by the developer,
the Corporation Counsel and the Mayor, after which it shall be certified
by the City Clerk by his signature and the affixing of the Municipal
Seal.
c.
Distribution of Executed Agreements. Once an Agreement has been fully
executed, the City Clerk shall be responsible to distribute executed
copies thereof to the developer, the Tax Assessor, the Tax Collector,
the Construction Code Official and the Corporation Counsel. The City
Clerk shall retain one executed copy which shall be placed on permanent
file within his office, where it shall be available for examination
by the public during regular business hours.
d.
Minimum Annual Service Charge. Whenever the minimum amount of the annual service charge for the project, as determined pursuant to Section 10:25-11a shall exceed the amount which otherwise would be due as the annual service charge, the amount determined pursuant to Section 10:25-11 shall be deemed to be the amount of the annual service charge.
For any project, the minimum annual service charge shall be
the amount of the total taxes assessed against all real property in
the area covered by the project in the calendar year immediately preceding
the year in which that area was acquired by the municipality or its
agency, or by the private or public owner from whom the urban renewal
entity acquired the land.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-10]
The Entity shall be required to pay all applicable payroll taxes,
sewer taxes, parking fees, hotel taxes or other obligation to maintain
the tax exemption for the project. For and in consideration of the
City's granting an extension for the project, the Entity shall
be required to pay an annual service charge, an annual tax levy adjustment,
an annual capital improvement adjustment and an annual excess profit
payment. The failure to pay any of the financial obligations of whatsoever
type or nature shall result in the termination of the tax abatement.
a.
Calculation of the Annual Service Charge. The agreement shall further provide for the payment of an annual service charge by the applicant to be the greater of the following: either the amount of the minimum annual service charge determined pursuant to Section 10:25-10d or the amount of such annual service charge to be paid to the City as has been determined by the Council at the time of the adoption of this chapter and has been reflected and filed with the City Clerk at that time. Such bases for annual adjustment may be modified hereafter by adoption of a resolution for that purpose, at which time the form of those changes will be filed with the City Clerk. Changes made hereafter shall not affect agreements then in existence, but shall only affect agreements approved after the adoption of such change.
b.
Calculation of Annual Tax Levy Adjustment. The annual service charge
for these projects shall be further increased in each year of the
extended period by an amount as hereinafter determined: For each year
following the first year of the extended period, there shall be added
to the annual service charge the amount produced by multiplying the
annual service charge for the project in the previous year by the
percentage that the total tax levy of the municipality for the current
tax year has increased over the total tax levy of the municipality
for the immediately preceding tax year. For the purposes of this section,
"total tax levy" means the total amount the municipality is required
to raise by property taxation for municipal, school and County purposes,
as shown in the Table of Aggregates prepared pursuant to N.J.S. 54:4-52
and set forth in Column 12D of the Abstract of Ratables for the County.
In any year in which there is no increase or a reduction in the total
tax levy of the municipality, the amount to be added pursuant to this
paragraph shall be zero.
c.
Annual Capital Improvement Adjustment. In addition, the annual service charge for these projects shall be further increased by the capital improvements required to be made to those projects pursuant to the provisions of Section 10:25-9 or by any other capital improvement made thereto. The amount of the increase to be added in each year of the extended period pursuant to this paragraph shall be determined by multiplying the cost of the capital improvement to the project by the applicable percentage rate as provided in this subsection. The amount to be annually added to the annual service charge under the provisions of this paragraph shall first be added in the year in which the affected capital improvement is deemed completed by the municipality, pursuant to Section 10:25-9.
d.
Annual Excess Profit Payment. The Entity shall also make an excess
profit payment within 90 days after the close of the fiscal year,
based upon the actual performance of the project pursuant to the provisions
of N.J.S. 40:55C-66 and 98. The additional payment by the developer
shall be submitted, along with a statement by a certified public accountant,
attesting that the excess profit payment was based upon the gross
revenue derived in accordance with N.J.S. 40:55C-40 et seq.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-11]
Except where the provisions of this chapter control, the Manager,
Division of Tax Abatement and Special Taxes shall be responsible for
administering the terms of the agreement, following the procedures
set forth in Title 10, Finance and Taxation, Chapter 24, Procedures
for Application, Approval and Administration of Tax Abatement Agreement
of the Revised General Ordinances of the City of Newark.
[Ord. 6 S+FI, 2-21-1990 § 10:11A-12]
Upon the termination of any exemption extended pursuant to this
chapter, the project, all affected parcels and all improvements made
thereto shall be assessed and subject to full taxation consistent
with other taxable properties within the City. All restrictions and
limitations upon the entity shall terminate and be at an end upon
the entity's rendering its final accounting and payment of all
financial obligations to the City including and not limited to annual
service charge, annual tax levy adjustment, annual capital improvement
adjustment and excess profit payment. The payment and certified audit
shall be submitted to the Manager, Division of Tax Abatement and Special
Taxes within 90 days of such termination. The payment shall be made
pursuant to N.J.S. 40:55C-66 or 98, as applicable.
