[HISTORY: Adopted by the Township Committee of the Township of Deerfield as indicated in article histories. Amendments noted where applicable.]
[Adopted 9-2-1998 by Ord. No. 1998-8 (Ch. 108, Art. I, of the 1984 Code)]
Editor's Note: This ordinance repealed former Ch. 108, Art. I, Abatement for Commercial and Industrial Improvements and Projects, adopted 7-3-1991 by Ord. No. 1991-7, as amended.
As used in this article, the following terms shall have the meanings indicated:
- That portion of the assessed value of a property as it existed prior to construction, improvement or conversion of a building or structure thereon, which is exempted from taxation pursuant to this article.
- The officer of the Township of Deerfield charged with the duty of assessing real property for the purposes of general taxation.
- COMMERCIAL or INDUSTRIAL STRUCTURE
- A structure or part thereof used for the manufacturing, processing or assembling of material or manufactured products or for research, office, industrial, commercial, retail, recreational, hotel or motel facilities or warehousing purposes, or for any combination thereof, which the governing body determines will tend to maintain or provide gainful employment within the municipality, assist in the economic development of the municipality, maintain or increase the tax base of the municipality and maintain or diversify and expand commerce within the municipality. It shall not include any structure or part thereof used or to be used by any business relocated from another qualifying municipality unless the total square footage of the floor area of the structure or part thereof used or to be used by the business at the new site, together with the total square footage of the land used or to be used by the business at the new site, exceeds the total square footage of that utilized by the business at its current site of operations by at least 10%; and the property that the business is relocating to has been the subject of a remedial action plan costing in excess of $250,000 performed pursuant to an administrative consent order entered into pursuant to authority vested in the Commissioner of Environmental Protection under P.L. 1970, c. 33 (N.J.S.A. 13:1D-1 et seq.); the Water Pollution Control Act, P.L. 1977, c. 74 (N.J.S.A. 58:10A-1 et seq.); the Solid Waste Management Act, P.L. 1970, c. 39 (N.J.S.A. 13:1E-1 et seq.); and the Spill Compensation and Control Act, P.L. 1976, c. 141 (N.J.S.A. 58:10-23.11 et seq.).
- Substantially ready for the intended use for which a building or structure is constructed, improved or converted.
- The provision of a commercial or industrial structure or the enlargement of the volume of an existing commercial or industrial structure by more than 30%, but shall not mean the conversion of an existing building or structure to another use.
- That portion of the Assessor's full and true value of any improvement, conversion, alteration or construction not regarded as increasing the taxable value of a property pursuant to this article.
- A modernization, rehabilitation, renovation, alteration or repair which produces a physical change in an existing building or structure that improves the safety, sanitation, decency or attractiveness of the building or structure as a place for human habitation and which does not change its permitted use. In the case of a commercial or industrial structure, it shall not include ordinary painting, repairs or replacement of maintenance items or any enlargement of the volume of an existing structure by more than 30%. In no case shall it include the repair of fire or other damage to a property for which payment of a claim was received by any person from an insurance company at any time during the three-year period immediately preceding the filing of an application pursuant to this article.
Exemptions from taxation for improvements to commercial or industrial structures may be granted upon review, evaluation and approval of each application on an individual basis by the Township Committee. In determining the value of real property, the Township of Deerfield shall regard up to the Assessor's full and true value of the improvement as not increasing the value of the property for a period of five years, notwithstanding that the value of the property to which the improvements are made is increased thereby. During the exemption period, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements, unless there is damage to the structure through action of the elements sufficient to warrant a reduction.
Abatements from taxation for construction of commercial or industrial structures may be granted upon review, evaluation and approval of each application on an individual basis by the governing body and upon execution of an agreement which shall be entered into between the Township and a developer in accordance with the procedures set forth in this article.
Applicants for tax exemption or tax abatement for new construction of commercial or industrial structures shall provide the governing body with an application setting forth:
A general description of a project for which exemption or abatement is sought.
A legal description of all real estate necessary for the project.
Plans, drawings and other documents as may be required by the governing body to demonstrate the structure and design of the project.
A description of the number, classes and type of employees to be employed at the project site within two years of completion of the project.
A statement of the reasons for seeking tax exemption or abatement on the project, and a description of the benefits to be realized by the applicant if a tax agreement is granted.
Estimates of the cost of completing such project.
A statement, showing:
The real property taxes currently being assessed at the project site.
Estimated tax payments that would be made annually by the applicant on the project during the period of the agreement.
Estimated tax payments that would be made by the applicant on the project during the first full year following the termination of the tax agreement.
A description of any lease agreement between the applicant and the proposed users of the project and a history and description of the users' business.
Such other pertinent information as the governing body may require.
Upon adoption of this article, which authorizes a tax agreement or agreements for a particular project or projects, and upon review and recommendation from the Tax Assessor, the Township Committee may enter into written agreements with applicants for the exemption and abatement of local real property taxes. An agreement shall provide for the applicant to pay to the municipality in lieu of full property tax payments an amount annually to be computed by one, but in no case a combination, of the following formulas:
Cost basis. The agreement may provide for the applicant to pay to the municipality in lieu of full property tax payments an amount equal to 2% of the cost of the project. For the purposes of the agreement, "the cost of the project" means only the cost or fair market value of direct labor and all materials used in the construction, expansion or rehabilitation of all buildings, structures and facilities at the project site, including the costs, if any, of land acquisition and land preparation, provision of access roads, utilities, drainage facilities and parking facilities, together with architectural, engineering, legal, surveying, testing and contractors' fees associated with the project, which the applicant shall cause to be certified and verified to the governing body by an independent and qualified architect following the completion of the project.
Gross revenue basis. The agreement may provide for the applicant to pay to the municipality in lieu of full property tax payments an amount annually equal to 15% of the annual gross revenues from the project. For the purposes of the agreement, "annual gross revenues" means the total annual gross rental and other income payable to the owner of the project from the project. If, in any leasing, any real estate taxes or assessments on property included in the project, any premiums for fire or other insurance on or concerning property included in the project or any operating or maintenance expenses ordinarily paid by the landlord are to be paid by the tenant, then those payments shall be computed and deemed to be part of the rent and shall be included in the annual gross revenue. The tax agreement shall establish the method of computing the revenues and may establish a method of arbitration by which either the landlord or tenant may dispute the amount of payments so included in the annual gross revenue.
Tax phase-in basis. The agreement may provide for the applicant to pay to the municipality in lieu of full property tax payments an amount equal to a percentage of taxes otherwise due, according to the following schedule:
In the first full tax year after completion, no payment in lieu of taxes otherwise due.
In the second tax year, an amount not less than 20% of taxes otherwise due.
In the third tax year, an amount not less than 40% of taxes otherwise due.
In the fourth tax year, an amount not less than 60% of taxes otherwise due.
In the fifth tax year, an amount not less than 80% of taxes otherwise due.
All tax exemption and tax abatement agreements entered into pursuant to this article shall be in effect for no more than five full tax years following the date of completion of the project.
All projects subject to tax agreement as provided herein shall be subject to all applicable federal, state and local laws and regulations on pollution control, worker safety, discrimination in employment, housing provision, zoning, planning and building code requirements.
That percentage which the payment in lieu of taxes for a property bears to the property tax which would have been paid had an exemption or an abatement not been granted for the property under the agreement shall be applied to the valuation of the property to determine the reduced valuation of the property to be included in the valuation of the municipality for determining equalization for county tax apportionment and school aid during the term of the tax agreements covering the properties; and at the termination of an agreement for a property the reduced valuation procedure under this section shall no longer apply.
Within 30 days after the execution of a tax agreement, the Township Clerk shall forward a copy of the agreement to the Director of the Division of Local Government Services in the Department of Community Affairs.
If, during any tax year prior to the termination of the tax agreement, the property owner ceases to operate or disposes of the property, or fails to meet the conditions for qualifying, then the tax which would have otherwise been payable for each tax year shall become due and payable from the property owner as if no exemption and abatement had been granted. The governing body of the municipality shall notify the property owner and Tax Collector forthwith, and the Tax Collector shall within 15 days thereof notify the owner of the property of the amount of taxes due. However, with respect to the disposal of the property, where it is determined that the new owner of the property will continue to use the property pursuant to the conditions which qualified the property, no tax shall be due, the exemption and the abatement shall continue, and the agreement shall remain in effect.
At the termination of a tax agreement, a project shall be subject to all applicable real property taxes as provided by state law and regulation and local ordinance; but nothing herein shall prohibit a project, at the termination of an agreement, from qualifying for and receiving the full benefits of any other tax preferences provided by law.
The Assessor shall determine, on October 1 of the year following the date of the completion of an improvement or construction, the true taxable value thereof. Except for projects subject to tax agreement as provided herein, the amount of tax to be paid for the first full tax year following completion shall be based on the assessed valuation of the property for the previous year, minus the amount of the abatement, if any, plus any portion of the assessed valuation of the improvement, conversion or construction not allowed an exemption pursuant to this article. The property shall continue to be treated in the appropriate manner for each of the five full tax years subsequent to the original determination by the Assessor.
No exemption or abatement shall be granted pursuant to this article with respect to any property for which property taxes are delinquent or remain unpaid or for which penalties for nonpayment of taxes are due.
No exemption or abatement shall be granted pursuant to this article except upon written application therefor filed with and approved by the Tax Assessor. Every application shall be on a form prescribed by the Director of the Division of Taxation in the Department of the Treasury, and provided for the use of claimants by the Township of Deerfield, and shall be filed with the Assessor within 30 days, including Saturdays and Sundays, following the completion of the improvement, conversion or construction. Every application for exemption or abatement which is filed in the time specified shall be approved and allowed by the Assessor to the degree that the application is consistent with the provisions of this article, provided that the improvement, conversion or construction for which the application is made qualifies as an improvement, a conversion, alteration or construction pursuant to the provisions of N.J.S.A. 40A:21-1 et seq. The granting of an exemption, or exemption and abatement, or tax agreement shall be recorded and made a permanent part of the official tax records of the Township of Deerfield, which record shall contain a notice of termination date thereof.
Ordinance No. 1991-7 (former Chapter 108 of the Municipal Code of the Township of Deerfield) and all amendments thereto are hereby repealed. However, no exemption or abatement granted pursuant to said ordinance, as amended, shall be affected or terminated by virtue of this repeal but shall remain in effect for the time and under the terms granted as if the ordinance authorizing the exemption or abatement had not been so repealed.
Pursuant to N.J.S.A. 40A:21-4, this article shall take initial effect for the first full tax year commencing after the tax year in which this article is adopted.
Pursuant to N.J.S.A. 40A:21-20, notice of the adoption of this article shall be included in the mailing of annual property tax bills to each owner of property located in the Township of Deerfield during the first year following adoption of this article.
The Township Clerk is hereby authorized and directed to forward a certified copy of this article to the State of New Jersey, Department of Community Affairs, upon adoption.