[Ord. 6 S+FA, 1-15-1986 § 10:11-1; Ord. 6 S+FA, 2-27-1990; Ord. 6 S+FD, 10-21-1992; Ord. 6 S+FO, 8-6-1997; Ord. 6 S+FF, 6-21-2006 § 1; Ord.
6 PSF-A, 10-4-2017; Ord. 6PSF-I, 8-8-2018; amended 3-15-2023 by Ord. No. 6PSF-G,
03-15-2023]
When used in this Chapter, the following terms shall be defined
as indicated:
Shall mean the exemption of property from real estate taxes,
subject to the payment of an annual service charge in lieu of taxes,
authorized pursuant to the provisions of the Long Term Tax Exemption
Law, (N.J.S.A. 40A:20-1 et seq.), New Jersey Housing and Mortgage
Finance Agency Law, (N.J.S.A. 55:14K-1 et seq., and the Redevelopment
Bond Financing Law (N.J.S.A. 40A:12A-64 et seq.). Where an abatement
or exemption is authorized pursuant to the provisions of the Long
Term Tax Exemption Law or the New Jersey Housing and Mortgage Finance
Agency Law, real estate taxes levied on the value of land shall continue
to be assessed for the purpose of general taxation, except as otherwise
provided by State statute.
Shall mean the Long Term Tax Exemption Law (C.40A:20-1 et
seq.); the Redevelopment Bond Financing Law (C. 40A-12A-65 et seq.);
or the Housing and Mortgage Finance Agency Law (C.55:14K-1 et seq.),
as applicable.
Shall mean housing affordable to persons of low or moderate
income as defined pursuant to the "Fair Housing Act," N.J.S.A. (52:27d-301
et seq.)
Shall mean the contract entered into between the City of
Newark and an entity, pursuant to the Act.
Shall mean annual gross revenue, or gross shelter rent plus
other income, or annual gross rents plus other income, as appropriate,
for each Applicant.
Shall mean an entity duly qualified under the Act which is
requesting long-term tax abatement pursuant to an Application required
by the City.
Shall mean the information and data required, by the City,
to be submitted by an entity requesting a long-term tax abatement
or exemption.
Shall be indicated by compliance with the following requirements:
The applicant or its designee shall meet with the Deputy Mayor
of the Division of Full Employment, prior to approval of the Tax Abatement
Committee; and
The applicant or its designee shall identify and provide the
Deputy Mayor of the Division of Full Employment with the name, address,
tax identification number, qualifications, WMBE certification, if
any, and the co-developer's invested dollar amount or percentage of
ownership of the project. If the applicant fails to identify a co-developer,
the applicant will provide a report to the Deputy Mayor of the Division
of Full Employment with the reasons why; and
The applicant or its designee shall provide the Deputy Mayor
of the Division of Full Employment with a monthly construction report
detailing the status of its minority and women workforce compliance
with regard to the hiring process. Said report shall include name,
address, social security number and ethnic background of the individual
worker; and
The applicant or its designee shall make an effort throughout
the duration of the project to contact and meet with minority and
women business enterprises for the purpose of satisfying affirmative
action, contracting, long-term employment and workforce goals ("Workforce
Goals") set forth in the Revised General Ordinances (2:2-28.1 et seq.
and 2:4-21 et seq.) The applicant shall provide the Deputy Mayor of
the Division of Full Employment with a monthly report on its efforts
to contact and meet with minority and women business enterprises;
and
The applicant shall provide Deputy Mayor of the Division of
Full Employment with a monthly report on minority and women contractors
and minority and women subcontractors hired. Said report shall identify
if the minority contractor and minority subcontractor have WMBE certification,
the ethnic background, name, address, the scope (type) of business,
the dollar amount of contract, and the percentage of the development
contract awarded to the contractor and subcontractor; and
The applicant or its designee shall make an effort to contact
and meet with Newark residents throughout the duration of the project
for the purpose of satisfying the Workforce Goals of this Agreement.
The applicant shall provide the Deputy Mayor of the Division of Full
Employment with a monthly report on its efforts to contact and meet
with Newark residents; and
The applicant shall require that its contractors shall maintain
a file of the names, addresses, and telephone numbers of each Newark
resident who has sought employment with respect to a project or who
was referred to the contractor by the Newark Resident Jobs Policy
Office but was not hired. The contractor shall maintain a record of
the reason any such person was not hired; and
The applicant shall designate an individual to serve as a compliance
officer for the purpose of satisfying the Workforce Goals of this
section (Ordinance 6 PSF-A, 10-4-2017); and
If requested by Deputy Mayor of the Division of Full Employment,
the applicant shall meet with the Deputy Mayor/Director of Economic
and Housing Development to review and discuss compliance with the
Workforce Goals of this section.
Job Fair.
[Added 3-15-2023 by Ord. No. 6PSF-G, 03-15-2023]
Any developer/contractor/builder who is developing property
in the City of Newark and is applying for a tax abatement from the
City of Newark is required to conduct a "Job Fair" at the development
site. If vacant property is being developed the developer/contractor/builder
is required to hold the "Job Fair" at a designated and convenient
location in close proximity to the proposed development site. Said
Job Fair shall be a public meeting at which time the developer/contractor/builder
shall be obligated to make a presentation designed to fully inform
those persons attending the Job Fair with a detailed description of
the proposed project, the number and size of the proposed commercial
and residential units, a description of the number and type of workers
reasonably required to build the project, information pertaining to
new job openings within the project, and the number and type of workers
to be employed after the completion of construction.
The developer/contractor/builder shall be required to provide
public notice of the date, time and location of the Job Fair by publication
in two (2) newspapers of general circulation in the City of Newark
of the Notice of the Job Fair at least ten (10) days prior to the
date the Job Fair is to take place.
Proof of Publication of the Public Notice shall be filed by
the developer/contractor/builder with the City of Newark, Department
of Economic and Housing Development and the Mayor's Office of Affirmative
Action at least seven (7) business days prior to the date the Job
Fair is to take place.
The developer/contractor/builder shall also be required to notify
the City of Newark, Department of Economic and Housing Development
and the Mayor's Office of Affirmative Action of the date, time and
location of the Job Fair by certified mail RRR at least seven (7)
days prior to the date of the Job Fair, with Job Fair information
contained thereon.
The developer/contractor/builder shall be required to post and
maintain clearly visible signage at locations in close proximity to
the proposed development site giving Notice to the Public of the date
time and location of the happening of the Job Fair.
The developer/contractor/builder shall conduct a Job Fair in
compliance with all of the requirements set forth within this paragraph
j.
The Job Fair shall be subject to a review by the Director of
the Department of Economic and Housing Development and the Mayor's
Office of Affirmative Action. The tax abatement application shall
not be considered by the Tax Abatement Committee of the Municipal
Council, unless the applicant's Job Fair is approved by the Director
of the Department of Economic and Housing Department and the Mayor's
Office of Affirmative Action.
In a Transformative Corporate Headquarters means expenses
by a business or any affiliate of the business incurred after application
for:
Site preparation and construction, repair, renovation, improvement,
equipping, or furnishing on real property or of a building, structure,
facility, or improvement to real property; and
Obtaining and installing furnishings and machinery, apparatus,
or equipment, including but not limited to material goods subject
to bonus depreciation under Sections 168 and 179 of the Federal Internal
Revenue Code (26 U.S.C. s.168 and s.179), for the operation of a business
on real property or in a building, structure, facility, or improvement
to real property.
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In addition to the foregoing, if a business acquires or leases
a Transformative Corporate Headquarters, the capital investment made
or acquired by the seller or owner, as the case may be, if pertaining
primarily to the premises of the Transformative Corporate Headquarters,
shall be considered a capital investment by the business and, if pertaining
generally to the Transformative Corporate Headquarters being acquired
or leased, shall be allocated to the premises of the Transformative
Corporate Headquarters on the basis of the gross leasable area of
the premises in relation to the total gross leasable area in the Transformative
Corporate Headquarters. The capital investment described herein may
include any capital investment made or acquired within 24 months prior
to the date of application so long as the amount of capital investment
made or acquired by the business, any affiliate of the business, or
any owner after the date of application equals at least 50% of the
amount of capital investment, allocated to the premises of the Transformative
Corporate Headquarters being acquired or leased on the basis of the
gross leasable area of the premises in relation to the total gross
leasable area in the Transformative Corporate Headquarters made or
acquired prior to the date of application.
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Shall mean a financial statement or report of the fiscal
operations of a project, including but not limited to revenues and
expenses, which shall be submitted annually pursuant to N.J.S.A. 40A:20-9(d).
The contents of an audit shall be prepared in a manner consistent
with the current standards of the Financial Accounting Standards Board,
shall fully detail all items required by applicable statutes, and
shall be certified as to its conformance with such standards by an
Independent Certified Public Accountant who is licensed to practice
that profession in the State of New Jersey.
Shall mean the City of Newark, New Jersey.
Shall mean an applicant's partnering entity for any development
project eligible under the Act for a long-term tax abatement that
is a woman and/or minority as defined pursuant to the Revised General
Ordinances, (2:2-28.1 et seq.) with a residential address, business
residency or principal place of business in the City of Newark.
Shall mean any project which "consists of a place or activity
involving the sale of goods or services or the operation of an office"
as defined by the Newark Zoning and Land Use Regulations, Ordinance
6PSF-C February 4, 2015, and shall include, but not be limited to,
any retail, office, or hotel project.
Shall mean the Deputy Mayor/Director of the Department of
Economic and Housing Development and/or other person designated by
the Director of Economic and Housing Development to conduct, manage
and oversee development programs and projects in the City.
Shall mean the Finance Director of the City of Newark.
Shall mean the agency or office within the Department of
Finance of the City of Newark, which is headed and managed by the
Tax Collector.
Shall mean the Division of Tax Abatement and Special Taxes
within the Department of Finance. This office shall be responsible
for oversight and administration of tax abatements and tax exemptions,
except as otherwise assigned by the Director of the Department of
Finance.
Means a new full-time position at a transformative corporate
headquarters, which the business has filled with a full-time employee
of that business.
Shall mean an urban renewal entity meeting the qualifications
set forth in N.J.S.A. 40A:20-5 and/or a "housing sponsors" as defined
in N.J.S.A. 55:14K-1 et seq. accordance with HMFA law.
Shall mean the gross rent or carrying charge, less the cost
of utilities furnished by the project, and excluding cost of sewage
and water.
Shall mean:
A combination of land, improvement and equipment which have
been integrated into a functioning unit intended for the assembling,
processing and manufacturing of finished or partially finished products
from raw materials or fabricated parts, including, but not limited
to, warehouses; and
Where the Municipal Council determines that the project will
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.
Shall mean the prevailing wage rate defined pursuant to Ordinance.
6 S+FE, April 18, 2007.
Shall mean housing not affordable to persons of low or moderate
income as defined pursuant to the "Fair Housing Act," N.J.S.A. 52:27d-301
et seq.
Shall mean the Mayor of the City of Newark, New Jersey.
Shall mean the amount of the total taxes assessed against
all real property in the area covered by the project in the last full
tax year in which the area was subject to taxation, and the minimum
annual service charge shall be paid in each year in which the annual
service charge calculated would be less than the minimum annual service
charge.
Shall mean housing with both market-rate units and units
affordable to persons of low and moderate income as defined pursuant
to the "Fair Housing Act," N.J.S.A. 52:27d-301 et seq.
Shall mean the Municipal Council of the City of Newark, New
Jersey.
Shall mean revenue from parking, commercial and office space,
coin-operated machines, and any other revenue not derived from residential
rents.
Shall mean any work or undertaking, as defined in the Long
Term Tax Exemption Law at N.J.S.A. 40A:20-3e, by an Urban Renewal
Entity; a housing project financed by the New Jersey Housing and Mortgage
Finance Agency, pursuant to N.J.S.A. 55:14K-37; and any work or undertaking
pursuant to the Redevelopment Area Bond Financing Law at N.J.S.A.
40A:12A-64 that requires a financial agreement for the payment in
lieu of taxes or special assessment.
He or it shall mean the masculine, feminine or neuter gender,
the singular as well as the plural, as proper meaning requires.
Shall mean the real property and improvements thereon which
existed prior to the execution of a Financial Agreement.
Means within any building, complex of buildings or structural
components of buildings, and all machinery and equipment, at one or
more sites zoned for that purpose located anywhere within this State,
used in connection with the operation of a business.
Shall mean the date on which a project receives, or is eligible
to receive a certificate of occupancy.
Shall mean the Assessor for the City of Newark.
Shall mean the Tax Collector for the City of Newark.
Shall mean that as defined in the Long Term Tax Exemption
Law at N.J.S.A. 40A:20-3(h).
Shall mean the Financial Statement or report submitted by
the applicant within 90 days after the substantial completion supported
by a certification of the licensed architect for the project.
Means the corporate headquarters of a business that is a
qualified business facility at which the business intends to create
at least 30,000 new full-time jobs and make at least $3,000,000,000
in capital investment in the City of Newark.
[Ord. 6 S+FD, 10-21-1992; Ord. 6 S+FN, 2-17-1993; Ord. 6 S+FF, 6-21-2006 § 1; Ord. 6 PSF-F, 5-19-2010 § 1; Ord.
6 PSF-A, 10-4-2017]
This chapter sets forth the procedures and standards to be followed
by the City in the formation, review and consideration of applications
for abatement or exemption of real estate taxes, and the administration
of Financial Agreements as authorized by the Municipal Council. This
chapter is intended to apply to residential, industrial and commercial
projects. Should there be any conflicting provisions in this chapter
with the provisions of the Act the provisions of the Act will be controlling.
N.J.S.A. 40A:20-12, N.J.S.A. 40A:12A-66, and N.J.S.A. 55:14K-37 shall
govern permissible annual service charge amounts and permissible durations
of any long term tax exemption or abatement.
[Ord. 6 S+FD, 10-21-1992; Ord. 6 S+FN, 2-17-1993 § 10:11-3; Ord. 6 S+FF, 6-21-2006; Ord. 6 PSF-A, 10-4-2017]
a.
Form of Application. All applications shall be submitted by an entity
utilizing the application form on file with the Office of the City
Clerk and adopted by the Municipal Council by resolution. The application
form may be revised from time to time subject to the approval of the
Municipal Council by Resolution. An application shall include but
not be limited to: the name, address, tax identification number, WMBE
certifications, if any, and qualifications of the applicant and co-developer,
or, a showing that the applicant complied with Best Efforts to identify
a co-developer; the name of the owners and/or Board of Directors of
applicant and co-developer (if applicable); the percentage of ownership
of the owners of applicant and co-developer (if applicable); a description
of the property by metes and bounds, tax map block and lots and corresponding
street address for which the exemption is sought, including a survey
or plotting from the tax map; the requested duration of the exemption;
the purpose for which the project shall be used; a detailed description
of the improvements to be made to the property; an estimate of the
total project cost or total project unit cost, where applicable, as
defined by the Act; a ten-year projected pro forma for the project;
an estimated schedule for commencement and completion of construction;
a copy of the resolution granting final site plan approval; and a
declaration that the proposed project is located within a redevelopment
area or area appurtenant thereto, or is for a redevelopment relocation
housing project and any other information which the application may
require.
In addition, the application shall set forth the representations
of the applicant as to the assessments on the property for land and
improvements as of the date of the filing of the application, the
tax levy on the property for the year in which the application is
filed, and the status of all municipal taxes, fees and charges due
and payable to the City arising from or imposed on the property. A
complete explanation as to the expected methods and sources of financing
the project shall also be included.
The application shall further contain statements of disclosure
in the form contained in the application as to all parties, including
parent and subsidiary companies having any interest in the property
and/or project, or any other tax exemption or financial agreement
then in force and effect in which any of those parties have any interest,
and as to any other contracts or agreements with the City in which
any of those parties have any interest, and if so provide the Federal
Identification Number of each party listed.
The application shall contain the certification of the applicant
that construction of the project has not and will not commence prior
to approval of exemption and execution of Financial Agreement between
the City and the entity.
The application shall also include an estimate by the applicant
as to the percentage and type of jobs to be held by Newark residents
during the period of construction and the estimated percentage and
type of permanent jobs to be held by Newark residents within one year
after the completion date. The application shall contain the affirmative
action plan of the entity and a certification by the entity that such
plan complies with the affirmative action requirements of the City.
The application shall also include the certification of the
applicant that the proposed project meets the requirements of the
laws of New Jersey for exemption. Where a property is required to
be declared "in need of redevelopment" by the City and a redevelopment
plan is required to be adopted by the City as a prerequisite to the
grant of an exemption, the entity shall further certify that the proposed
project complies with the redevelopment plan as adopted.
The application shall also include a proposed Financial Agreement
prepared by the entity, which shall include the terms and conditions
required by the Act, this chapter, and in the form that is on file
with the City Clerk.
Ten copies of an application shall be submitted with all copies
executed in the original by an authorized agent or officer of the
entity. Where the entity is a corporation or company, the signature
on the application shall be certified as to its authenticity and authority
by the submission of a notarized corporate or company resolution,
affixed with the seal of the corporation or company and the signature
of the secretary of the corporation or company, or similar bona fide
evidence.
b.
Application Fee. No application for abatement or exemption submitted
pursuant to this chapter shall be accepted unless it is accompanied
by full payment of the required application fee. Such fees shall be
2% of the first year annual service charge estimated for the project
pursuant to N.J.S.A. 40A:20-12(b). The application fee shall be received
for processing the application.
c.
Administrative Fee. The administrative fee for processing a request
for the assignment and assumption of a tax exemption and financial
agreement shall be 2% of the annual service charge for the current
year pursuant to N.J.S.A. 40A:20-12(b). Checks shall be certified
and payable to the City. The Application fee shall be nonrefundable.
d.
Submission. All applications for abatement or exemption shall be
submitted to the Mayor and Development Officer, either in person or
by certified mail, at the office of the Mayor and Development Officer.
The Mayor shall thereupon transmit the applications to the Division
of Tax Abatement and Special Taxes for processing.
[Ord. 6 S+FD, 10-21-1992; Ord. 6 S+FF, 6-21-2006 § 1; Ord. No. 6 PSF-A, 10-4-2017]
a.
Distribution of Application. Upon receipt of any application, the
Development Officer shall forward one copy to the Director of Finance,
one copy to the Manager of the Division of Tax Abatement and Special
Taxes, one copy to the Tax Assessor, one copy to the Tax Collector,
one copy to the City Clerk and two copies to the Corporation Counsel.
The final copy of the application shall be retained by the Division
of Revenue Collection and shall be placed on permanent file with that
office.
b.
Development Review. Upon receipt of an application, the Development
Officer shall conduct a complete review of the project outlined therein.
Such review shall take into consideration the propriety, accuracy
and validity of the description(s), plan(s) and estimate(s) submitted,
the degree to which the project complies with the City's development
goals as expressed in the master plan, zoning ordinances, redevelopment
plans, the Development Officer's policies, the necessity of tax abatement,
and the feasibility of the project.
Based on the review, the Development Officer shall submit his
recommendation to approve or disapprove the application to the Corporation
Counsel. Such recommendation shall include any changes to the application
that may be deemed necessary by the Development Officer, as well as
set forth the reasons for the recommendation.
c.
Financial Review. Upon receipt of an application, the Director of
Finance shall conduct a financial review of the application including
a cost and benefit analysis of the proposed project. In addition,
the Director of Finance shall obtain written certifications from municipal
officials as necessary to review and substantiate the information
contained within the application. Those certifications shall include
the following:
1.
Certification of the Tax Assessor as to:
(a)
The taxes levied on the real property included within the project
in both the year in which the application was filed and the immediately
preceding year.
(b)
The precise identity of all real property included within the
project, including the metes and bounds description, all tax block
and lot designations and corresponding street addresses, as well as
a survey or plotting of the property on the official tax map.
(c)
The owner of record as recorded in the office for each tax lot
included within the project.
(d)
The tax assessment for land and improvements then in effect
for each tax lot included within the project.
(e)
The total amount assessed on all real property included within
the project in the calendar year immediately preceding its acquisition
by the City, the City's agent, the entity or the entity's agent.
2.
Certification of the Tax Collector as to:
(a)
The current status of payments due for real estate taxes, service
charges and/or municipal liens of any type arising from the property
included within the project or from any other property owned by the
entity.
(b)
The taxes levied on the real property included within the project
in both the year in which the application was filed and the immediately
preceding year.
(c)
The current status of payments due for any financial agreement
then in force and effect which the entity is a party.
4.
Certification of the Director of the Division of Billing and Customer
Service, or appropriate office, as to the status of payments due for
water and sewer services provided to the real property included within
the project or other real property within the City, which the entity
has an interest.
5.
Certification of the Director of the Uniform Construction Code Office
as to the status of licenses and permits, and the amount of any payments
due for licenses and permits issued to or held by the entity or related
party.
Based upon the review, the Director of Finance shall submit
his/her recommendation to approve or disapprove the application to
the Corporation Counsel. Such recommendation shall state the basis
or reasons supporting the recommendation.
d.
Legal Review. Upon receipt of an application, the Corporation Counsel
shall conduct a review as to the form and legality of the application.
In addition, the Corporation Counsel shall obtain written certifications
from municipal officials as necessary to substantiate the information
contained in the application.
At a minimum, such certifications shall include the following:
1.
The certifications provided for in paragraph c above.
2.
Certification of the Secretary of the Board of Adjustment identifying
whether the use proposed for the project conforms to the zoning ordinance
of the City.
3.
Certification of the Secretary of the Central Planning Board, if
applicable, identifying whether the project is located within a redevelopment
area and identifying whether the project has received final site plan
approval from the Central Planning Board.
4.
The Certification of the Affirmative Action Officer that the applicant
has met with their office, received the applicable ordinances and
resolutions and has been made aware of their responsibilities pursuant
to the program. The Manager of Tax Abatement and Special Taxes shall
also review any Financial Agreements then in force and effect to determine
the extent to which each party to the application is a party to any
other agreements with the City and whether they are current on their
obligations in those agreements.
Upon receipt of the aforementioned certifications and the review
thereof, the Corporation Counsel shall make a determination as to
the propriety of the application. Applications shall be deemed proper
in those cases where they are presented in the proper form, satisfy
the requirements of this chapter and all other applicable statutes
and ordinances, and for which no delinquency has been found with respect
to any payments due to the City.
Where an application is deemed proper, the Corporation Counsel
shall prepare an ordinance in the form necessary to authorize the
exemption and shall review, revise and modify the form of the Financial
Agreement, as appropriate. All Financial Agreements shall be in the
form filed with the City Clerk. The authorizing ordinance shall be
signed by the Corporation Counsel as to form and legality and submitted,
together with the Financial Agreement, the application, the certifications
and the recommendation of the Director of Finance and the Development
Officer to the Mayor for consideration.
Where an application is deemed improper or deficient, the Corporation
Counsel shall prepare a correspondence outlining those aspects of
the application that are deficient and shall forward the correspondence
with the application, the certifications and the recommendation of
the Director of Finance and the Development Officer to the Mayor for
consideration.
e.
Mayoral Review. Upon receipt of an application and recommendations
from the Corporation Counsel, the Mayor shall determine the action
to be taken in regard to an application. When an application is deemed
complete and receives favorable review by the Corporation Counsel,
the Mayor shall determine whether to recommend the adoption of the
authorizing ordinance by the Municipal Council, or to recommend the
rejection of the application as not being in the interests of the
City. Where an application does not receive a favorable recommendation
by the Corporation Counsel, the Mayor shall determine whether the
deficiencies can be cured, and if so may direct the entity and/or
the appropriate municipal official as to the actions required. If
the deficiencies cannot be cured or if the application is deemed not
in the interest of the City, the Mayor may recommend the rejection
of the application.
In those cases where the Mayor affords the entity the opportunity
to cure deficiencies, the application may be reconsidered after correction
or modification by submission to the Mayor. Afterwards, the process
outlined in this chapter shall be followed again. No fee shall be
charged for consideration of a resubmitted application.
In those cases where the Mayor has recommended the rejection
of an application and where such action has been ratified by the Municipal
Council, the application may only be reconsidered by the submission
of another application and application fee to the Division of Tax
Abatement and Special Taxes, which shall be treated as a new application.
The recommendation of the Mayor to the Municipal Council, whether
for approval or rejection, shall occur within 60 calendar days after
the date of receipt of a complete application.
f.
Municipal Council Consideration. Upon receipt of an ordinance to
authorize a Financial Agreement, the application together with all
of the documents which were submitted by the Applicant, the certifications
and review by the Finance Director required by this chapter and the
Mayor's recommendation, the Municipal Council shall not place such
ordinance on the agenda for consideration, but rather shall refer
the matter to its Tax Abatement Committee for review. The Tax Abatement
Committee shall review the ordinance, the application, certifications,
the recommendations, and the form of the Financial Agreement to ensure
that the requirements of this chapter have been satisfied. Where an
application is determined to be in proper form, the Tax Abatement
Committee may make findings and recommendations.
The Tax Abatement Committee shall submit its findings and any
recommendation to the Municipal Council. Upon receipt of the submission
of the Tax Abatement Committee, the Municipal Council shall place
the application on its agenda for consideration. Upon action by the
Municipal Council, an ordinance may be adopted, rejected or returned
to Administration for correction, modification or further information.
Notice of the adoption of an ordinance granting exemption and approving
a Financial Agreement shall be published, pursuant to N.J.S.A. 40A:20-12.
[Ord. 6 S+FD, 10-21-1992; Ord. 6 S+FN, 2-17-1993 § 10:11-5; Ord. 6 S+FF, 6-21-2006 § 1; Ord.
6 PSF-A, 10-4-2017; amended 7-20-2021 by Ord. No. 6PSF-C(s),
07-20-2021]
a.
Form of Financial Agreement. A Financial Agreement shall be in the form appropriate to the nature of the project, as on file with the City Clerk and approved by the Municipal Council. The Financial Agreements shall set forth the identification of the affected property, the nature and magnitude of the improvements to be constructed or developed thereon, the service charges to be paid to the City in accordance with Section 10:24-10 of this chapter, the duration of the exemption in accordance with Section 10:24-8 of this chapter, and a provision that requires compliance with the City's Affirmative Action Plan, First Source Employment Linkage Program, Newark Resident's Employment Policy, and Apprenticeships and Project Labor Agreements set forth in the Revised General Ordinances of the City of Newark, New Jersey, as amended and supplemented, 2000, (2:2-28-1 et seq., 2:4-21 et seq., and 2:4-22D.1 et seq.). The Financial Agreement shall include a Responsible Party for purposes of: (i) receiving service of process for any notice of breach, default or a violation of any of the provisions of the Financial Agreement; and (ii) being jointly and severally liable with the Entity for the payment of any fines, penalties, costs or other assessments imposed by the City for such breach, default or a violation of any of the provisions of the Financial Agreement. "Responsible Party" means an individual who is an officer, shareholder, member, manager, partner or other person authorized by the Entity to make day-to-day decisions relating to its business affairs who has or will benefit, directly or indirectly, from the Entity's receipt of a Long Term Tax Exemption. The Financial Agreement shall in all cases provide that any transfer in the ownership of an entity that is greater than 10% or that would materially change the terms of the Financial Agreement shall be void unless disclosed to the City in an annual disclosure statement or in correspondence sent to the City in advance of an annual disclosure. The Financial Agreement shall require the timely submission of a Total Project Cost Audit and a certified audit of the fiscal 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 property. The Financial Agreement shall require an entity, as a material condition of the Agreement, to do whatever is necessary to maintain the entire property, including common areas, in good condition and in a manner that satisfies basic habitability including, but not limited to, complying with all building codes, keeping the property free from infestation, ensuring the property is structurally sound, ensuring that elevators and the systems that supply plumbing, electricity, gas, heat and air condition (central or individual units supplied by entity), are in good and functioning order either through routine repairs or replacements. Additionally, the entity shall keep the property clean and sanitary by providing the appropriate garbage cans and recycling bins and ensure their adequate removal from the property as required by State and Local Laws and Regulations ("Building Maintenance"). The Financial Agreement shall provide that the failure to comply with the requirement to submit certified audits, make payment of municipal taxes, fees and charges, or failure to comply with any material condition of the Agreement, shall be grounds for the City to terminate the Agreement, and/or to exercise such other remedies as may be provided by statute, municipal ordinance or the Financial Agreement. The Financial Agreement shall further provide for the annual service charges and administrative fees that are to be paid to the City, based on the submission of a certified audit by an independent certified public accountant and in accordance with Section 10:24-10.
1.
An entity shall concomitantly with the submission of a certified
independent audit certify that the entity has complied with the requirement
to include a responsible party for purposes of: (i) receiving service
of process for any notice of breach, default or a violation of any
of the provisions of the Financial Agreement; and (ii) being jointly
and severally liable with the entity for the payment of any fines,
penalties, costs or other assessments imposed by the City for such
breach, default or a violation of any of the provisions of the Financial
Agreement, and attach an employment report under oath, with particulars,
stating the manner and the extent to which it has complied with the
City's Affirmative Action Plan, First Source Employment Linkage Program,
Newark Resident's Employment Policy, and Apprenticeships and Project
Labor Agreements set forth in the Revised General Ordinances, as amended
and supplemented, 2000, (2:2-28.1 et seq., 2:4-21 et seq., and 2:4-22D.1
et seq.). The employment report shall, like the certified audit, be
filed with both the Director of Finance and the City Clerk.
2.
The Director of Finance shall forthwith, after receiving the employment
report, send a copy thereof to the Office of Affirmative Action for
investigation of the factual representation contained therein and
to report its findings to the Municipal Council.
b.
Execution of Financial Agreement. Upon adoption of an ordinance by
the Municipal Council authorizing exemption, it shall be the responsibility
of the City Clerk to ensure that the Financial Agreement is fully
executed. No Financial Agreement shall be considered to be in force
and effect unless and until it has been signed by the entity, the
Corporation Counsel, the Mayor, and dated and certified by the City
Clerk by his signature and affixing the Municipal Seal.
c.
Distribution of Executed Financial Agreement. When a Financial Agreement
has been fully executed, the City Clerk shall be responsible for distributing
certified copies thereof to the entity, the Tax Assessor, the Tax
Collector, the Manager of the Division of Tax Abatement and Special
Taxes, the Construction Code Official and the Corporation Counsel.
The City Clerk shall retain one executed copy which shall be placed
on permanent file with his office, where it shall be available for
examination during regular business hours. Further, the City Clerk
shall forward a certified copy of all ordinances approving an exemption
and the accompanying Financial Agreement to the Director of the Division
of Local Government Services, pursuant to N.J.S.A. 40A:20-12.
[Ord. 6 S+FD, 10-21-1992 § 10:11-6; Ord. 6 S+FF, 6-21-2006 § 1; Ord.
6 PSF-A, 10-4-2017]
During the period of construction of a project, the Tax Assessor,
Division of Revenue Collection and the Construction Code Official
shall each be responsible for oversight of the project as outlined
below.
a.
Permits and Inspections. Upon receipt of an executed Financial Agreement,
the Construction Code Official shall cause permits to be issued upon
the application of the entity and shall cause inspections of all work
activity to be conducted in the manner provided by applicable municipal
ordinances. The Construction Code Official shall notify the Division
of Revenue Collection of any failure by the entity to properly apply
for permits, to begin or complete construction within the time frame
set forth in the Financial Agreement. When permits are issued, the
Construction Code Official shall be responsible for notifying the
Tax Assessor, Tax Collector and the Division of Tax Abatement and
Special Taxes and the Affirmative Action Office of such issuance.
b.
Quarterly Report to Assessment. From the date of the execution of
a Financial Agreement until the issuance of a permanent Certificate
of Occupancy for the project, the Construction Code Official shall
report to the Tax Assessor each quarter as to the status of permit
and construction activity on the project. Upon the total or partial
completion of construction, the Construction Code Official shall issue
a Certificate of Occupancy in appropriate form, and shall be responsible
for filing a copy of every certificate with the Tax Assessor, Tax
Collector and the Division of Tax Abatement and Special Taxes.
c.
Assessments and Taxes. When a permanent Certificate of Occupancy
is issued for a project granted exemption pursuant to the Act, the
Tax Assessor shall reflect the improvements and land thereof, as authorized,
on the Exempt Property List or as otherwise required by State statute.
Further, the Tax Assessor shall exempt the assessment of all improvements
covered by the Financial Agreement during the period the exemption
remains in effect. Assessments for land shall remain taxable throughout
the term of the exemption, except as otherwise provided.
At any time that the Tax Assessor causes the assessment on the
improvements or land of a project to be removed, in whole or in part,
from taxable to exempt status, he shall so notify the Manager of Tax
Abatement and Special Taxes in writing so as to insure the commencement
and payment of annual service charges, pursuant to the terms of the
Financial Agreement.
d.
Collection and Audit. Upon receipt of an executed Financial Agreement,
the Division of Tax Abatement and Special Taxes shall note within
its books of account a record of the execution of the agreement and
the dates provided for commencement and completion of construction.
The Tax Collector shall thereafter continue to levy taxes and collect
payment thereof on the property until the occurrence of the following:
1.
In the event that a Certificate of Occupancy is issued for the project,
the Tax Collector shall immediately cease to levy or collect taxes
on the portion of the assessed value covered by the Certificate of
Occupancy and the Manager of the Division of Tax Abatement and Special
Taxes shall instead commence billing the entity the estimated annual
service charge as required by the Financial Agreement. Where the Financial
Agreement is authorized pursuant to the Act, taxes on the value of
the land shall continue to be levied and collected according to the
laws of New Jersey, except as otherwise authorized.
When a Certificate of Occupancy for a project is issued, in
addition to the steps outlined above, the entity shall submit to the
Finance Director, Manager of Tax Abatement and Special Taxes and the
City Clerk a copy of a certified total project cost audit prepared
by a certified public accountant and the independent and qualified
architect's certification required by the Act, within 90 days from
the date of issuance of the Certificate of Occupancy.
The Division of Tax Abatement and Special Taxes shall review the certified total project cost audit and the architect's certification and make a determination as to the acceptability of the audit. If the audit is deemed unacceptable it may be performed by the City's designated auditor and the cost thereof shall be borne by the Entity. The Division of Tax Abatement and Special Taxes shall be responsible for billing the entity for the cost of the audit. Once the audit is accepted, if its findings cause any change in the basis to be used in the determination of the annual service charge, net profit or excess profits, the Division of Tax Abatement and Special Taxes shall bill the entity for any adjustment. The Division of Tax Abatement and Special Taxes shall also maintain a copy of an approved certified total project cost audit with the permanent files of its office. Upon adoption of an ordinance authorizing amendment to the Financial Agreement, the Division of Tax Abatement and Special Taxes shall bill the entity for the cost of the audit services and for any additional service charges resulting from an adjustment of the estimated service charges, and thereafter annual service charges or excess profits, if owed, shall be billed to the entity. The City Clerk shall be responsible for distributing and filing executed copies of the Financial Agreement, as amended, in the same manner as set forth for in Section 10:24-5c of this chapter.
2.
In the event that the entity fails to commence or complete construction of the project within the time required by the Financial Agreement, fails to make payment of annual service charges as required by the Agreement, or otherwise fails to satisfy a material condition of the Agreement, the Division of Tax Abatement and Special Taxes shall notify the Corporation Counsel of the default by the entity. The Corporation Counsel shall thereupon take steps necessary to terminate the Financial Agreement and to advise the Tax Assessor and the Tax Collector of the actions to be taken regarding the assessment and collection of real estate taxes. The Corporation Counsel shall also be responsible for the preparation of such ordinance necessary to authorize the termination of the Financial Agreement. Upon adoption of such an ordinance, the City Clerk shall be responsible for filing and distributing the ordinance in accordance with the procedures established by Section 10:24-5c of this chapter.
[Ord. 6 S+FD, 10-21-1992 § 10:11-7; Ord. 6 S+FF, 6-21-2006 § 1; Ord.
6 PSF-A, 10-4-2017; amended 7-20-2021 by Ord. No. 6PSF-C
(s), 07-20-2021]
After construction of the project is completed and the issuance
of a permanent Certificate of Occupancy, the entity shall operate
the project in conformance with the terms of the Financial Agreement.
The Division of Tax Abatement and Special Taxes shall be responsible
for oversight and administration of the Financial Agreement during
the term of the exemption, in accordance with the procedures set forth
as follows:
a.
Billing and Payment. During the term of an exemption, the Manager
of the Division of Tax Abatement and Special Taxes shall bill service
charges quarterly. The bills prepared by the Division of Tax Abatement
and Special Taxes shall reflect the taxes due on the value of all
land included within the project and all service charges, or other
fees or charges due on the improvements, respectively. If authorized
by law, the land upon which housing is constructed, acquired or rehabilitated
by an entity, may be exempt from taxation during the term of the Financial
Agreement. Irrespective of the date of issuance, any bill for annual
service charges or other municipal charges shall be deemed to have
been issued on the first day of each calendar quarter and to be due
and payable within 30 calendar days thereafter. Where annual service
charges are billed on the basis of estimated or projected figures,
any payments thereof shall be reconciled upon the submission of a
certified audit. In such instance, the entity shall make any additional
or required payments within 90 days after the close of its fiscal
year. Any additional payment by an entity shall be submitted along
with a statement by a certified public accountant, attesting that
the additional payment was the actual amount due based upon the gross
revenue or total project cost as computed in accordance with provisions
of the Act and the Financial Agreement. All payments due to the City
arising out of the Financial Agreement which are not paid as of the
date due shall be subject to the same charges for penalties and interest
as arrears then in effect for nonpayment of real estate taxes.
The Division of Revenue Collection shall accept all payments
made pursuant to an effective and valid Financial Agreement and shall
maintain books of account as to each agreement. Except as otherwise
required by law, the Division of Revenue Collection and the Division
of Tax Abatement and Special Taxes shall apply payments received for
real estate taxes in the following order: first, amounts due for penalties
and interest on taxes, and then amounts due for the principal of tax
payments. As to payments received for service charges, first, amounts
due for penalties and interest, and then, amounts due for the principal
of service charge payments. The entity shall be responsible for making
timely payments for real estate taxes and service charges directly
to the Division of Revenue Collection and/or the Division of Tax Abatement
and Special Taxes.
In addition to payment of the annual service charge an entity
shall be required to pay an annual administrative fee to the City.
The requirement to pay an annual administrative fee shall be included
as a covenant in all deeds to a purchaser or transferee of a project
or unit owner thereof. The annual administrative fee shall be 2% of
the annual service charge payable and due on or before February 1st
of each year. In the event an entity or owner of a property granted
exemption pursuant to the Act does not pay the annual administrative
fee, such delinquency shall be grounds for rescission or termination
of the exemption.
b.
Annual Audits. Where required by the Act, other applicable law or
by the Financial Agreement, an entity shall submit a certified audit
prepared by a certified public accountant of the financial performance
of the project. A certified audit shall be submitted each year within
90 days after the end of the fiscal year of the entity to the Manager
of the Division of Tax Abatement and Special Taxes with a simultaneous
copy to the City Clerk for archival purposes. As part of or in addition
to the submission of a certified audit, the entity shall submit a
statement prepared by a certified public accountant attesting to the
net profits and the percentage of excess profits utilized to maintain
reserves authorized pursuant to the provisions of the Act. The Manager
of the Division of Tax Abatement and Special Taxes shall review each
audit upon submission and make a determination as to any adjustment
required in the annual service charge, net profit and/or excess profits.
The certified audit shall be submitted to the Director of Finance
and/or the Manager of the Division of Tax Abatement and Special Taxes
for review. If the Director of Finance and/or the Manager of the Division
of Tax Abatement and Special Taxes determines that an audit is acceptable,
it shall be used as the basis for the adjustments of any taxes, charges
or fees outlined in paragraph a of this section. If it is determined
that a certified audit is not acceptable, the Division of Tax Abatement
and Special Taxes shall notify the entity, and the entity shall have
responsibility to cure the deficiencies identified and to submit a
corrected or restated audit. As part of the audit process, in the
event that the certified audit is determined to be unacceptable, the
entity shall have responsibility for the payment of a fee to offset
the City's cost for review of the certified audit. This fee shall
be billed by the Division of Tax Abatement and Special Taxes as part
of the annual service charge and shall be payable under the same terms
as that charge.
c.
Noncompliance. If an entity fails to comply with the requirements
for submission of a certified audit and/or timely payment of real
estate taxes and service charges during the term of the Financial
Agreement, the Division of Tax Abatement and Special Taxes shall have
responsibility to enforce the terms of the Financial Agreement through
the following procedure. Such procedure shall not be the City's sole
remedy, but rather shall be used in addition to such other remedies
as may be provided by the laws of New Jersey and the terms of the
Financial Agreement.
1.
In the case where any payment due to the City pursuant to a Financial
Agreement, whether arising from real estate taxes or service charges
is in arrears for a period of six months or more, the Division of
Tax Abatement and Special Taxes shall notify the entity or responsible
party that unless the total amount due including penalties and interest
and subsequent charges are brought to current status within a period
of 30 days from the date of the notification, the exemption and Financial
Agreement shall be rescinded. If the entity fails to comply with such
notice, the Division of Tax Abatement and Special Taxes shall recommend
that the Law Department prepare an ordinance rescinding the exemption
and Financial Agreement, and shall notify the Tax Assessor of the
pending action.
Where an exemption and Financial Agreement is rescinded, the
entity shall have 30 calendar days to seek reinstatement of the exemption
and Financial Agreement, which shall only be permitted when all obligations
of the entity or person receiving the benefit of an exemption are
satisfied and made current. Upon satisfaction of all obligations,
the Division of Tax Abatement and Special Taxes in consultation with
the Development Officer shall recommend that the Law Department prepare
an ordinance to reinstate the exemption and Financial Agreement for
the remainder of its term.
It shall be the responsibility of the City Clerk to file and
distribute copies of all ordinances to rescind or reinstate an exemption
and Financial Agreement.
2.
In the event of any nonpayment as outlined in paragraph c,1 of this
section, in addition to the remedies outlined therein, the entity
by signing the Financial Agreement agrees that the City shall have
the same rights to enforce liens and commence foreclosure proceedings
against its project as though the nonpayment were real estate taxes.
The City may exercise such rights by following the procedures established
by State statute and local ordinances for the collection of delinquent
real estate taxes.
3.
Where any certified audit required to be submitted pursuant to a
Financial Agreement is delinquent for a period of 30 days or more
from the date required to be submitted, the Division of Tax Abatement
and Special Taxes shall notify the entity that unless the audit is
submitted in proper form within 30 days from the date of notification,
the exemption and Financial Agreement shall be rescinded. If the entity
fails to comply with the notice, the Division of Tax Abatement and
Special Taxes shall recommend that the Law Department prepare an ordinance
rescinding the exemption and Financial Agreement, which shall cause
the project or unit thereof to be assessed according to the general
laws of taxation.
Where an exemption or Financial Agreement is rescinded, the
remaining procedure shall be the same as set forth in paragraph c,1
of this section. However, the City, at its option may choose not to
exercise its right to rescind or terminate, but instead cause an equivalent
audit to be conducted by qualified personnel under the City's direction.
Where this option is elected, the City shall utilize the resulting
audit as the basis for billing as if it had been submitted by the
entity. Further, the City shall have the right to bill the entity
for the cost of conducting an audit. Exercise of this option by the
City shall not in any way preclude or waive the right of the City
to terminate an exemption for any other default.
4.
Where an entity or other person fails to comply with any other material
condition of a Financial Agreement, the Division of Tax Abatement
and Special Taxes shall notify the Corporation Counsel of the default.
The Corporation Counsel shall thereupon take appropriate steps necessary
to declare the exemption and Financial Agreement void or take such
other legal or equitable action.
5.
Where
an entity has not complied with building maintenance and receives
one or more determinations of guilt by a court of competent jurisdiction
either through a court hearing or through the entity's own admission
of guilt through a plea agreement for City code violations related
to the property or structure(s) on the property, the entity shall
be deemed in default of the Financial Agreement and the City shall
begin the default process pursuant to the terms of the Financial Agreement.
In the event the entity shall fail to cure such default, the Division
of Tax Abatement and Special Taxes shall notify the Municipal Council
and recommend that the Corporation Counsel terminate the Financial
Agreement, which shall cause the project or unit thereof to be assessed
according to the general laws of taxation.
[Ord. 6 S+FD, 10-21-1992 § 10:11-8; Ord. 6 S+FN, 2-17-1993; Ord. 6 S+FD, 5-21-1997; Ord. 6 S+FD, 8-6-1997; 6 S+FD, 8-9-2000 § 1; Ord. 6 S+FF, 6-21-2006 § 1; Ord.
6 PSF-A, 10-4-2017; Ord. 6PSF-1, 8-8-2018]
Notwithstanding anything to the contrary, the following projects
are eligible for a tax abatement:
a.
Affordable Housing Project for a period of 30 years from the completion
of the entire project, or not more than 35 years from the execution
of the Financial Agreement, or for the period of time required by
the Federal agency subsidizing the project, whichever is greater;
c.
Market-Rate Housing Project for a period of 15 years;
d.
Senior Market-Rate Housing Project for a period of 20 years;
e.
Commercial project designed to be a hotel for a period of 20 years,
or a commercial project designed to be a worker cooperative or other
cooperative enterprise for a period of 20 years, or all other commercial
projects for a period of 15 years with special considerations for:
f.
Industrial project designed for computer and technical industries
for a period of 20 years, or an industrial project designed for renewable
energy production for a period of 20 years, or all other industrial
projects for a period of 15 years with special considerations for:
g.
A Transformative Corporate Headquarters Project shall be entitled
to a 30 years term from the completion of the entire project, or not
more than 35 years from the execution of the Financial Agreement.
[Ord. 6 S+FD, 10-21-1992 § 10:11-9; Ord. 6 S+FN, 2-17-1993 § 10:11-9; Ord. 6 S+FD, 5-21-1997; Ord. 6 S+FF, 6-21-2006 § 1; Ord. 6 PSF-A, 10-4-2017]
The City hereby approves the format of the application and Financial
Agreement for long term tax exemption of residential, commercial and
industrial projects, which shall be placed on permanent file in the
Office of the City Clerk. All such documents shall be available for
examination and distribution during regular business hours.
The Corporation Counsel may, from time to time, make technical
and legal changes not affecting the substance of these documents.
[Ord. 6 S+FD, 10-21-1992 § 10:11-10; Ord. 6 S+FN, 2-17-1993 § 10:11-10; Ord. 6 S+FD, 5-21-1997; Ord. 6 S+FO, 8-6-1997; Ord. 6 S+FF, 6-21-2006' § 1; Ord. 6 PSF-A, 10-4-2017; Ord. 6PSF-I, 8-8-2018]
During the term of an exemption, in lieu of any taxes to be
paid on the project improvements, buildings or land, as authorized
by law, an entity shall make payment to the City of an annual service
charge. The annual service charge required to be paid by the entity
shall be in accordance with the following:
a.
Low and Moderate Income Senior and/or Disabled Housing Projects.
The annual service charge for low and moderate income housing projects
reserved for seniors and/or disabled persons shall not be less than
6.28% of the annual gross rents plus 15% of other income, or 2% of
the total project cost, throughout the tax abatement term.
b.
Other Low and Moderate Income Housing Projects. The annual service
charge for all other low and moderate income housing projects shall
not be less than 7.5% of the annual gross rents plus 15% of other
income, or 2% of the total project cost, throughout the tax abatement
term.
c.
Mixed-Income Housing Project. The annual service charge for mixed-income
housing projects shall be the following:
1.
20% Set-Aside for Affordable Housing. The annual service charge for
mixed-income housing projects with a 20% set-aside for affordable
housing shall not be less than 10% of the annual gross rents plus
15% of other income, or 4% of the total project cost of the market-rate
units and 7.5% of the annual gross rents plus 15% of other income,
or 2% of the total project cost of the low and moderate income units
throughout the tax abatement term.
2.
40% Set-Aside for Affordable Housing. The annual service charge for
mixed-income housing projects with 40% set-aside for affordable housing
shall not be less than 11.5% of the annual gross rents plus 15% of
other income, or 3% of the total project cost of the market-rate units
and 7% of the annual gross rents plus 15% of other income, or 2% of
the total project cost for the low and moderate income units throughout
the tax abatement term.
3.
50% Set-Aside for Affordable Housing. The annual service charge for
mixed-income housing projects with 50% set-aside for affordable housing
shall not be less than 11% of the annual gross rents plus 15% of other
income, or 3% of the total project cost of the market-rate units and
6.28% of the annual gross rents plus 15% of other income, or 2% of
the total project cost for the low and moderate income units throughout
the tax abatement term.
d.
Senior Market-Rate Housing. The annual service charge for market-rate
housing reserved for seniors only shall be 10% of the annual gross
rents plus 15% of other income, or 2% of the total project cost, throughout
the tax abatement term.
e.
Other Market-Rate Housing Project. The annual service charge for
all other market-rate housing projects shall not be less than 15%
of the annual gross rents plus 15% of other income, or 2% of the total
project cost. Specifically, the annual service charge for low and
moderate income housing projects shall be:
f.
Commercial Projects. The annual service charge for commercial projects
shall not be less than 15% of the annual gross revenues, or 2% of
the total project cost. Specifically, the annual service charge for
low and moderate income housing projects shall be:
1.
15% of the annual gross revenues, or 2% of the total project cost
for the first 10 years of the tax abatement term; and
2.
16.5% of the annual gross revenues, or 2% of the total project cost
for years eleven through 11-15 of the tax abatement term; and
3.
18.5% of the annual gross revenues, or 3% of the total project cost
for years 16-20 of the tax abatement term.
g.
Industrial Projects. The annual service charge for industrial projects
shall not be less than 15% of the annual gross revenues, or 2% of
the total project cost. Specifically, the annual service charge for
low and moderate income housing projects shall be:
1.
15% of the annual gross revenues, or 2% of the total project cost
for the first 10 years of the tax abatement term;
2.
16.5% of the annual gross revenues or 2% of the total project cost
for years eleven through 11-15 of the tax abatement term;
3.
18.5% of the annual gross revenues or 3% of the total project cost
for years 16-20 of the tax abatement term;
h.
Notwithstanding any other provision of this chapter, the annual service
charge for condominium projects shall be not less than 10% of the
annual gross revenues generated from the operation of such projects
and the maximum term shall not exceed 30 years. In the case of a condominium
project "annual gross revenue" means the amount equal to the annual
aggregate constant payments to principle and interest, pursuant to
N.J.S.A. 40A:20-14(a).
1.
Minimum Annual Service Charge. Whenever the minimum annual service charge for the project exceeds the amount which otherwise would be due as the annual service charge, as determined by Section 10:24-10, the minimum annual service charge shall be deemed the amount of the annual service charge, except the minimum annual service charge shall not apply to qualified subsidized housing projects, pursuant to N.J.S.A. 40A:20-1 et seq.
i.
A Transformative Corporate Headquarters shall be granted an annual
service charge determined by the City of Newark in accordance with
the provisions of the Long Term Tax Exemption Law, (N.J.S.A. 40A:20-1
et seq.).
[Ord. 6 S+Ff, 6-21-2006 § 1; Ord. 6 PSF-A, 10-4-2017]
An abatement authorized pursuant to this chapter for any market
rate housing project or any commercial or industrial project shall
not be approved unless the entity makes a contribution to the City
of Newark's Affordable Housing Trust Fund, in accordance with N.J.S.A.
40A:12A-4.1 et seq. and this chapter.
No contribution shall be required of an entity that by a recorded
deed or agreement, restricts (thereby setting aside) a minimum of
20% of the project for low and moderate income affordable housing
for a minimum period of 30 years in accordance with the Fair Housing
Act, N.J.S.A. 52:27D-301 et seq.
a.
Amount of Payments. The amount of contribution shall be calculated
based upon the classification of the improvements to be tax exempt
in accordance with the following formulas:
|
Market Rate Housing
|
$1,500 per unit
|
|
Commercial Space
|
$1.50 per square foot
|
|
Industrial Space
|
$0.10 per square foot
|
b.
Time of Contribution. All contributions shall be due and payable
as follows:
1.
One-third on or before the effective date of the executed Financial
Agreement;
2.
One-third on or before the issuance of the first of any construction
permit for the project, but no later than six months after the date
of the Financial Agreement;
3.
One-third on or before the date the first of any Certificate of Occupancy
is issued for the project, but no later than 24 months after the date
of the Financial Agreement.
Any payment that is late or unpaid in whole or in part, whether
billed or not, shall bear the highest rate of interest allowed by
law for unpaid taxes until paid in full.
c.
Notices. The entity shall send a written notice to the Business Administrator
and the Tax Assessor's Office, immediately advising the City of the
occurrence of each of the following events:
d.
Guidelines for the Expenditure of Funds. All contributions made to
the Affordable Housing Trust Fund shall be expended solely for the
rehabilitation or preservation of existing low or moderate affordable
housing or the construction of new low or moderate income affordable
housing, as those terms are defined in the Fair Housing Act, N.J.S.A.
52:27-301 et seq., and any regulations promulgated thereunder. All
funds shall be awarded by the City from the Affordable Housing Trust
Fund as loans, on a reimbursement basis only, to supplement other
private or public funds needed to complete the project.
No award will be approved unless the applicant at a minimum
satisfies the following conditions:
1.
An applicant must file a completed application form which shall include
an administrative questionnaire, financial disclosure statement and
any other forms or supporting documents the City deems appropriate
or necessary; and
2.
An applicant must provide proof that it is a for profit or a nonprofit
entity, organized under State and Federal Law for the purpose of constructing
affordable housing or a public entity; and
3.
An applicant must demonstrate that it or a related entity has successfully
completed the construction of at least one other significant housing
project; and
4.
An applicant must provide proof that it is the recipient of funds
from another public or private source that, together with the Trust
Fund award, will constitute sufficient funds to complete the proposed
project; and
5.
The applicant must commence construction no later than one year from
the date of the award of the Trust Fund money. Failure to commence
construction within one year will result in cancellation of the award.
e.
Dedication of Funds. The funds shall be used only for the construction
of low or moderate income housing projects in accordance with the
Fair Housing Act, N.J.S.A. 52:27D-301 et seq. 2% of the funds shall
be retained by the City for its own administrative fees and/or capacity
building activities for local development corporations.
No funds shall be distributed to an entity earlier than closing
date of the first mortgage. The funds shall be distributed in accordance
with the construction draws which the entity is scheduled to receive
from the financing source(s).
f.
Collateral. All loans shall be collaterized by a note and the recordation
of a mortgage. The mortgage may only be subordinated to a permanent
governmental loan or a private institutional lender used to finance
the initial project acquisition or construction. All loans, including
self-amortizing loans, shall bear interest to be determined on a project-by-project
basis at a rate not to exceed the interest rate imposed on the first
mortgage as of the 1st day of the month immediately preceding the
closing.
[Ord. 6 PSF-A, 10-4-2017]
An abatement authorized pursuant to this chapter shall not be
approved unless the entity makes a contribution of 1% of the annual
service charge to the City's Community School Trust Fund.
[Ord. 6 S+Ff, 6-21-2006 § 1; Ord. 6 PSF-A, 10-4-2017]
An abatement authorized pursuant to this chapter for any market
rate housing project, or any commercial or industrial project shall
not be approved unless the entity makes a contribution to the City's
Community Economic Development Dedicated Trust Fund, established by
Resolution 7Rg, adopted by the Municipal Council of the City of Newark
on November 6, 1985, in order to satisfy the objectives of Title I
of the Housing and Community Development Act of 1974, codified as
42 U.S.C. 5301 et seq., and this chapter.
a.
Commercial and Industrial Projects. All applicants for a commercial
or industrial project shall contribute a minimum of 1% of annual service
charge to the City to be held in trust for financing the development
costs associated with redevelopment projects, urban revitalization
projects, economic stabilization and stimulation projects, and such
other projects within the City of Newark which are consistent with
the activities eligible for assistance under Title I of the Housing
and Community Development Act of 1974 as amended.
b.
Market-Rate Housing Projects. All applicants for a housing project
having less than 20% affordable housing shall contribute a minimum
of 0.25% of the annual service charge to the City to be held in trust
for financing the development costs associated with redevelopment
projects, urban revitalization projects, economic stabilization and
stimulation projects, and such other projects within the City of Newark
which are consistent with the activities eligible for assistance under
Title I of the Housing and Community Development Act of 1974 as amended.
c.
Mixed-Income and Affordable Housing Projects. All applicants for
a housing project having more than 20% affordable housing shall not
be required to contribute to the City's Community Economic Development
Dedicated Trust Fund.
