[Adopted 4-5-1993 by Ord.
No. 93-5; amended in its entirety 5-14-2015 by Ord. No. 2015-08]
The Borough of Berlin may enter into agreements with applicants
for tax abatement on commercial and industrial projects which satisfy
the article requirements hereinafter set forth. The agreement shall
provide for an abatement from real property taxation on these projects
for a period of not more than five years. During such five-year period,
the agreement shall provide for payments to the Borough of Berlin
in lieu of full property taxes, which payments shall be calculated
as set forth hereinafter in this article. Applications for abatement
from taxation may be filed to take effect for the first full year
commencing after the tax year in which the authorizing ordinance is
adopted, and upon completion of the project for tax years thereafter
as set forth in P.L. 1991, c. 441 (N.J.S.A. 40A:21-1 et seq.), but
no application for tax abatement shall be filed for an abatement to
take initial effect for the 11th full tax year or any tax year occurring
thereafter unless this article is readopted by the governing body
of the Borough of Berlin.
To be considered for tax abatement, a new commercial or industrial
structure must contain a minimum of 5,000 square feet of floor space
for use. An enlargement of an existing commercial or industrial structure
must be more than 30% of the existing volume of the structure, as
defined in N.J.S.A. 40A:21-3g.
A.
A preliminary application is required to be filed with the Borough
Tax Assessor, with a copy to the Borough governing body, prior to
the issuance of a construction permit for the project. No construction
permit shall be issued to an applicant seeking tax abatement until
such time as the preliminary application has been filed in accordance
with the Borough ordinance requirements and the Construction Office
advised of same in writing by the Borough Tax Assessor. If a preliminary
application is not filed, said property will not be eligible for tax
abatement.
B.
In the event a construction permit is not issued within one year
from the date the preliminary application is filed, the preliminary
application shall be deemed null and void.
C.
Upon the filing of a preliminary application, the Borough Tax Assessor
will review said application to determine if it meets the requirements
of the Borough article for abatement and a tax abatement agreement.
The Tax Assessor shall provide this determination to the Borough governing
body within 60 days of receipt of a properly completed preliminary
application.
(1)
In the event the Tax Assessor determines that the application meets
the chapter requirements, then the governing body shall adopt an ordinance
authorizing a tax abatement agreement with the applicant, subject
to the following conditions:
(a)
That the applicant shall file a final application for tax abatement
with the Tax Assessor in the form prescribed within 30 days, including
Saturdays and Sundays, following completion of construction. A copy
of the final application shall also be filed with the governing body
of the Borough.
(b)
The completed construction shall be in accordance with the original
Borough approvals on which the tax abatement agreement was initially
authorized based on the preliminary application.
(c)
The applicant has continued to meet the requirements of the
Borough article for tax abatement.
(2)
Every properly completed final application for abatement shall be
evaluated for approval by the Borough Tax Assessor within 30 days
of filing. The Tax Assessor shall notify the governing body in writing
of the approval determination. Upon receipt of the written approval
from the Borough Tax Assessor, the appropriate Borough officials shall
then proceed to execute the tax abatement agreement previously authorized
by the specific ordinance adopted as part of the preliminary application
approval process. The applicant shall be required to sign this tax
abatement agreement prior to the Borough signatories.
D.
Separate applications must be filed for each building involved in
phased projects.
E.
In the event the use listed on the preliminary application is changed subsequent to the issuance of the construction permit for the project, the governing body shall adopt an ordinance authorizing a tax abatement with the applicant, provided that the new use is of a type listed in § 299-14 as a qualifying project, that the applicant has submitted a revised preliminary application listing the new use, and that the Borough Tax Assessor determines that the revised preliminary application meets the requirements of this article.
The preliminary and final application must be on a form prescribed
by the Borough Tax Assessor and by the Director of the Division of
Taxation in the Department of Treasury and shall provide the following
information:
A.
A general description of the project for which abatement is sought;
B.
A legal description of all real estate necessary for the project;
C.
Plans and drawings, including a site layout on the total lot area,
and other documents as may be required by the governing body to demonstrate
the structure and design of the project;
D.
A description of the number, classes, types of employees and average
estimated wages and salaries by employee class to be employed at the
project site within two years of the completion of the project;
E.
A statement of the reasons for seeking tax abatement on the project
and a description of the benefits to be realized by the applicant
if tax abatement is granted;
F.
Estimates of the cost of completing such project;
G.
A statement showing:
(1)
The real property taxes currently being assessed at the project site;
(2)
Estimated tax payments that would be made annually by the applicant
on the project during the period of tax abatement; and
(3)
Estimated tax payments that would be made by the applicant on the
project during the first year following the termination of the tax
abatement agreement;
H.
A description of any lease agreements between the applicant and proposed
users of the project and a history and description of the user's
business;
I.
Proof of payment of taxes through the current quarter;
J.
Other pertinent data regarding the relationship, agreements and status
of other properties owned by the applicant within the Borough of Berlin;
and
K.
Such other pertinent information as the governing body may require.
The following type projects/uses will be considered for tax
abatement by the Borough of Berlin:
A.
Light industrial, light manufacturing, and indoor warehousing facilities
which are nonpolluting and non-noxious.
B.
Scientific or industrial research engineering laboratory, testing
or experimental laboratory or similar establishment for research or
product development.
C.
Administrative offices.
D.
Wholesale distributorships.
E.
Experimental, research testing, dental or medical laboratories.
F.
Carpet or rug cleaning; laundry and dry cleaning.
G.
Job printing and newspaper or book publishing.
H.
Baking and food and dairy processing.
I.
Corporate and professional offices.
J.
General service and repair shops, including carpenter, cabinetmaking,
furniture repair, plumbing or similar shop.
K.
Office of a builder, carpenter, caterer, cleaner, contractor, decorator,
electrician, furrier, mason, painter, plumber, roofer, upholsterer,
and similar non-nuisance businesses, excluding open storage of materials
and excluding open storage of motor vehicles.
L.
Veterinary hospital, provided that all animals are kept in a permanent
enclosed structure and are not within 150 feet of any existing residential
use or zone.
M.
Businesses and instructional school, including trade school.
N.
Nursing homes, homes for the aged and assisted living facilities.
O.
General commercial establishments permitted by zoning.
P.
Accessory uses on the same lot with and customarily incidental to
any of the above permitted uses.
Q.
Charter schools.
A.
All tax abatement agreements must be authorized by a separate ordinance
for each application.
B.
A tax abatement agreement shall provide for the applicant to pay
to the Borough in lieu of full property tax payments an amount annually
to be computed by the following formula:
Tax phase-in basis — The applicant must pay to the Borough
in lieu of full property tax payments an amount equal to a percentage
of taxes otherwise due, according to the following schedule:
(1)
In
the first full tax year from date of completion, no payment in lieu
of taxes unless otherwise due;
(2)
In
the second tax year from date of completion, an amount not less than
20% of taxes otherwise due;
(3)
In
the third tax year from date of completion, an amount not less than
40% of taxes otherwise due;
(4)
In
the fourth tax year from date of completion, an amount not less than
60% of taxes otherwise due;
(5)
In
the fifth tax year from date of completion, an amount not less than
80% of taxes otherwise due.
C.
All tax agreements entered into by virtue of this article shall be
in effect for no more than five full tax years from the date of completion
of the project. Within 30 days of the execution of a tax abatement
agreement, the Borough shall forward a copy of said agreement to the
Director of the Division of Local Government Services in the Department
of Community Affairs.
D.
No exemption or abatement shall be granted, or tax agreement entered
into, with respect to any property for which property taxes are delinquent
or remain unpaid or for which penalties for nonpayment of taxes are
due.
E.
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 abatement had been granted.
The Borough governing body shall notify the property owner and the
Tax Collector of the disqualification; and upon such notice, the Tax
Collector shall, within 15 days thereof, notify the owner of the property
of the taxes due and payable to the Borough. With respect to the disposal
of 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 for tax abatement, no tax shall be due, the
abatement shall continue and the agreement shall remain in effect.
F.
At termination of the tax abatement agreement, the property shall
be subject to all applicable real property taxes as provided by law;
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.
As used in this article, the following definitions shall apply:
The officer of the Borough of Berlin charged with the duty
of assessing real property for the purpose of general taxation.
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.
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
The development 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.
Commercial or industrial construction involving multiple
structures that are built separately.
An application filing fee of $300 shall be paid by the applicant
at the time of filing the preliminary application. The application
fee will provide for the administrative services to be undertaken
by the Borough Tax Assessor, and any other Borough official, in order
to render a determination on the applicant's eligibility for
a tax abatement. The filing fee shall cover the cost for both the
preliminary application and final application review and determination
process.
A.
Every tax abatement agreement required by this article shall be subject to payment of a nonrefundable escrow in the amount of $1,000, to be paid by the applicant at the time the applicant submits a preliminary application to the Tax Assessor in accordance with § 299-12 of this article. The required escrow shall be used to pay the cost of professional review by the Borough Solicitor, Engineer, and other professionals employed by the Borough to review and make recommendations regarding the tax abatement agreement.
B.
At the time of submission of an application to the Borough Tax Assessor,
the applicant shall be required to execute an escrow agreement with
the Borough to cover all necessary and reasonable costs incurred for
the technical and professional review of the tax abatement agreement.
The amounts specified for escrow are estimates which shall be paid
prior to the Borough's review of the tax abatement application.
In the event an additional amount is required for more than the amount
specified in the escrow agreement, the applicant shall pay all additional
sums required prior to the Borough's execution of the tax abatement
agreement.
C.
To the extent not otherwise inconsistent with this section, the escrow
fee required by this article shall be administered by the Chief Financial
Officer of the Borough.
D.
The Borough Clerk or his/her designee shall maintain an itemized
account of the escrow on deposit for each application and shall, upon
the request of the applicant, supply a copy of said account.
