[HISTORY: Adopted by the City Council of the City of Paterson as indicated in article histories. Amendments noted where applicable.]
[Adopted 7-31-2007 by Ord. No. 07-044]
Editor’s Note: This ordinance also superseded former Art. I, Tax Exemptions and Abatements for Improvements, adopted 8-24-1993 by Ord. No. 93-029.
The City of Paterson makes known its intention to utilize the tax abatement and exemption provisions authorized by Article VIII, Section 1, paragraph 6 of the New Jersey State Constitution, as enacted through the provisions of N.J.S.A. 40A:21-1 et seq., to permit and authorize tax exemption and abatement for the improvement of one- or two-unit residential structures; the improvement, expansion or construction of new commercial and industrial projects; the conversion to, or improvement of, existing multiple dwellings; or a combination of the above projects as defined herein. The intent of said property tax exemptions and abatements is to induce construction and rehabilitation of residential, industrial and commercial facilities and to stabilize the economic base of Paterson.
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 thereof which is exempted from taxation pursuant to this article.
- The office or official charged with the duty of assessing real property for the purpose of general taxation.
- COMMERCIAL OR INDUSTRIAL STRUCTURE
- A structure or part thereof used for the manufacturing, processing or assembling of material or manufactured products, or for research, office, industrial, commercial, retail, recreational, hotel or motel facilities, or warehousing purposes, or for any combination thereof which the City Council of the City of Paterson 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.
- Substantially ready for the intended use for which a building structure is constructed, improved or converted. The issuance of a certificate of occupancy or the time at which a certificate of occupancy could be issued, if requested, shall constitute completion.
- The provision of a new dwelling, multiple dwelling or commercial or industrial structure, or the enlargement of the volume of an existing multiple dwelling or commercial or industrial structure by more than 30%, but shall not mean the conversion of an existing building or structure to another use.
- CONVERSION ALTERATION
- The alteration or renovation of a nonresidential building or structure, or hotel, motor hotel or guest house, in such manner as to convert the building or structure from its previous use to use as a dwelling or multiple dwelling.
- A building or part of a building to be used or held for use as a home or residence, including accessory buildings located on the same premises, together with the land upon which such building or buildings are erected and which may be necessary for the fair enjoyment thereof, but shall not mean any building or part of a building defined as a "multiple dwelling" pursuant to the Hotel and Multiple Dwelling Law, (N.J.S.A. 55:13A-1 et seq.). A dwelling shall include, as they are separately conveyed to individual owners, individual residences within a cooperative, if purchased separately by the occupants thereof, and individual residences within a horizontal property regime or a condominium, but shall not include "general common elements" or "common elements" of such horizontal property regime or condominium as defined pursuant to the Horizontal Property Act (N.J.S.A. 46:8A-1 et seq.) or the Condominium Act (N.J.S.A. 46:8B-1 et seq.), or of a cooperative, if the residential units are owned separately.
- That portion of the assessor's full and true value of any improvement, conversion alteration, or construction not regarded as increasing the taxable value pursuant to this act.
- A modernization, rehabilitation, renovation, or alteration or repair which produces physical change in an existing building or structure that improves the safety, sanitation, decency or attractiveness of the building or structure as a place for human habitation or work, and which does not change its permitted use. In the case of a multiple dwelling, it includes only improvements which affect common areas or elements, or three or more dwelling units within the multiple dwelling. In the case of a multiple dwelling or commercial or industrial structure, it shall not include ordinary painting, repairs and replacement of maintenance items, or an enlargement of the volume of an existing structure by more than 30%. In no case shall it include the repair of fire or other damage to a property for which payment of a claim was received by any person from an insurance company at any time during the three-year period immediately preceding the filing of an application pursuant to this act.
- MULTIPLE DWELLING
- A building or structure meeting the definition of "multiple dwelling" set forth in the Hotel and Multiple Dwelling Law (N.J.S.A. 55:13A-1 et seq.), and means for the purpose of improvements or construction the "general common element" and "common element" of a condominium, a cooperative, or a horizontal property regime.
For the exemption from taxation of improvements to dwellings, in determining the value of real property, the first $25,000 in assessor's full and true value of improvements for each dwelling primarily and directly affected by the improvement in any dwelling more than 20 years old shall be regarded as not increasing the value of the property for a period of five years, notwithstanding that the value of the property to which the improvements are made is increased thereby. During the exemption, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements unless there is damage to the dwelling through action of the elements sufficient to warrant a reduction.
With respect to the exemption from taxation of improvements to multiple dwellings or of conversions of other buildings and structures including unutilized public buildings to multiple dwelling use, the assessor's full and true value of the improvements or conversion alterations shall not be regarded as increasing the value of the property for a period of five years, notwithstanding that the value of the property to which the improvements or conversion alterations are made is increased thereby. During the exemption, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements or conversion alterations, unless there is damage to the multiple dwelling through action of the elements sufficient to warrant a reduction.
In determining the value of real property for purposes of granting exemption from taxation of improvements to commercial or industrial structures, the assessor's full and true value of improvements shall not be regarded as 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.
The following procedure shall govern applications for tax exemption or abatement under the article. No exemption or abatement shall be granted except upon written application filed with the Assessor. Every application shall be on a form prescribed by the Director of Taxation in the Department of the Treasury, which form shall be on file in the City of Paterson Tax Assessor's office. Each application for construction or conversion alteration shall also contain the items set forth in § 445-8. It shall be filed with the Assessor not later than 30 days, including Saturdays and Sundays, following the completion of the improvement, conversion alteration or construction. Every application for exemption for existing structures which does not increase the volume of the structure by more than 30% which is filed within the time specified shall be approved and allowed by the Assessor to the degree that the application is consistent with the provisions of this article and provided that the improvement for which the application is made qualifies as an improvement pursuant to the provision of this article. Each such determination by the Tax Assessor's office shall be no later than within 60 days of the filing of the application. The granting of such exemption shall be recorded and made a permanent part of the official tax records of the City of Paterson which record shall contain a notice of the termination date of the exemption.
The Assessor shall refer any completed application for new construction or conversion alteration to the City Clerk with copies to the City of Paterson Law Department and Department of Community Development. All such applications shall be subject to review, evaluation and approval by the City Council pursuant to § 445-7 of this article.
The municipal governing body may approve ordinances authorizing tax agreements and enter into such agreements for a five-year abatement of real property taxes for construction and conversion alterations. The 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 of the formulas set forth in N.J.S.A. 40A:21-10. The above-referenced agreement between the applicant and the governing body shall be in the form of an ordinance of said governing body which shall have the agreement attached thereto.
If, during the tax year prior to the termination of such agreement, the property owner disposes of the property, the tax which would have otherwise been payable for each tax year shall become due and payable unless the City Council determines by resolution that the new owner of the property will continue to use the property pursuant to the conditions which qualified the property.
Applicants for tax exemption and abatement shall provide the municipal governing body with an application setting forth:
A general description of a project for which exemption and 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 and 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; and
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;
If the project is a commercial or industrial structure, a description of any lease agreements between the applicants and proposed users of the project, and a history and description of the users' businesses;
If the project is a multiple dwelling, a description of the number and types of dwelling units to be provided, a description of the common elements or general common elements, and a statement of the proposed initial rentals or sales prices of the dwelling units according to type and of any rental lease or resale restriction to apply to the dwelling units respecting low- or moderate-income housing;
Such other pertinent information as the governing body may require.
The Assessor shall determine on October 1 of the year following the date of the completion of an improvement the true taxable value thereof. Except for projects subject to agreement pursuant to § 445-7, the amount of tax to be paid for the first full tax year following completion shall be based on the assessed valuation of a property for the previous year plus any portion of the assessed valuation of the improvement, conversion or construction not allowed an exemption pursuant to this article.
Any additional improvement, conversion or construction completed on a property granted a previous exemption or abatement pursuant to this article, during the period in which such previous exemption or abatement is in effect, shall be qualified for an exemption, or exemption and abatement, just as if such property had not received a previous exemption or abatement. In such case, the additional improvement, conversion or construction shall be considered as separate for the purposes of calculating exemptions and abatements, except that the assessed value of any previous improvement, conversion or construction shall be added to the assessed valuation as it was prior to that improvement, conversion alteration or construction for the purpose of determining the assessed valuation of a property from which any additional abatement is to be subtracted.
No exemption or abatement shall be granted with respect to any property for which property taxes are delinquent or remain unpaid or for which penalties for nonpayment of taxes are due.
The exemption and abatement of real property taxes provided by the City of Paterson pursuant to this article shall apply to property taxes levied for municipal purposes, school purposes, county government purposes and for the purposes of funding any other property tax exemptions or abatements.
All advertising costs for publishing the ordinance to grant tax abatement to a particular project shall be paid by the applicant.
All improvements, conversion alterations or constructions contemplated by this article shall, during progress and when completed, conform with all statutory and municipal requirements relating to construction, land, buildings and the use thereof.
All projects pursuant to tax agreement 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.
Application for exemptions and abatements from taxation may be filed to take initial effect for the first full tax year commencing after the tax year in which this article is adopted and for the tax years thereafter as set forth herein. No application for exemptions or abatements shall be filed to take initial effect for the 11th full tax year or thereafter, unless this article is readopted by the governing body.
[Adopted 11-3-2013 by Ord. No. 13-052]
The City of Paterson hereby determines to utilize the "opt-in" authority granted by P.L. 2013, c. 161 (N.J.S.A. 52:27D-489s) to establish the eligibility of improvements to real property within the City for exemptions. The said opt-in shall be construed as a complete opt-in, such that any rights and duties that the said statute mandates shall be deemed adopted herein as well.
Pursuant to the authorization contained in N.J.S.A. 52:27D-489s, the Assessor shall be authorized to grant exemptions for improvements to real property in the City that are made after the effective date of this article. The owner of eligible property must obtain a final certificate of occupancy on or before September 18, 2023.
In determining the value of real property, the City Tax Assessor shall regard the assessor's full and true value of the improvements constructed after September 18, 2013, as not increasing the value of the property, under the following terms:
For a property owner other than a Garden State Growth Zone Development Entity, the said value of the improvements constructed after September 18, 2013, shall not increase the value of the property for five years from the issuance of a final certificate of occupancy.
For a Garden State Growth Zone Development Entity, which prior to the issuance of a final certificate of occupancy shall provide to the assessor proof that it qualifies as such entity, the said value of the improvements constructed after September 18, 2013, shall not increase the value of the property for 10 years from the issuance of a final certificate of occupancy, followed thereafter by payments in lieu of taxes under the following statutory schedule:
In the 11th year after completion, 10% of taxes otherwise due on the said improvements;
In the 12th year after completion, 20% of taxes otherwise due on the said improvements;
In the 13th year after completion, 30% of taxes otherwise due on the said improvements;
In the 14th year after completion, 40% of taxes otherwise due on the said improvements;
In the 15th year after completion, 50% of taxes otherwise due on the said improvements;
In the 16th year after completion, 60% of taxes otherwise due on the said improvements;
In the 17th year after completion, 70% of taxes otherwise due on the said improvements;
In the 18th year after completion, 80% of taxes otherwise due on the said improvements;
In the 19th full year after completion, 90% of taxes otherwise due on the said improvements;
In the 20th year after completion, and each year thereafter, 100% of taxes.
An amount not less than 5% of all payments by a Garden State Growth Zone Development Entity pursuant to this subsection shall be paid to the county.
The required payments shall be made in quarterly installments according to the same schedule as real property taxes are due and payable.
In addition to the payments required in lieu of taxes, the owner of the property granted an exemption pursuant to this article shall be liable for all real property taxes assessed and levied against the land on which the improvement is situated, as well as the value of the improvements on the property in the last full tax year prior to the issuance of the final certificate of occupancy.
Failure to make the payments set forth in Subsections A or B of this section shall result in the termination of the exemption. In addition to the remedy set forth herein, the requirements imposed shall be enforced in the same manner as is provided for real property taxes pursuant to Title 54 of the Revised Statutes of the State of New Jersey.
Upon the expiration of the tax exemption authorized pursuant to this article, the project shall be subject to all applicable real property taxes, as provided by state laws and regulations and local ordinances, provided that nothing herein shall be deemed to prohibit the project or improvement at the termination of the agreement from qualifying for and receiving the full benefits of any other tax preference provided by law.
The exemption of real property taxes provided by the City pursuant to this article shall apply to property taxes levied for municipal purposes, school purposes, county government purposes and for the purpose of funding any other property tax exemptions.