Town plans to give 30-year tax exemption to Executive Drive

WEST ORANGE, NJ — The West Orange Township Council approved an ordinance on first reading for a long-term tax exemption for the developers of the Executive Drive property near the center of town. This move, made at the council’s Nov. 26 meeting, begins a plan to relocate the West Orange Public Library and Animal Shelter to 10 Rooney Circle and build a dog park on the property. The ordinance passed with a vote of 4-1; Councilman Joe Krakoviak cast the only opposing vote.

Township Attorney Richard Trenk, financial adviser Michael Hanley and developer Jonathan Schwartz were at the meeting to present the plan to the council. The deal would turn 100 and 200 Executive Drive into a large apartment building, while redeveloping 10 Rooney Circle into a new library and animal shelter, and building a dog park on 2 acres of land on the property. According to Mayor Robert Parisi in a phone interview with the West Orange Chronicle on Dec. 9, 10 Rooney Circle and the dog park would then be transferred to the town’s ownership.

“What we’re proposing is one large building with approximately 300 apartments,” Schwartz, a partner with BNE Real Estate Group, said at the meeting. “There is a four-story parking garage that stands on its own and the 300 units wrap around it.”

Of the 300 apartments, 64 will be affordable housing. Schwartz said there will be 20,000 square feet of outdoor amenity space and 11,000 square feet of indoor amenity space, including a fitness center, pool and game room. The existing detention ponds on the property will remain, and there will be a sidewalk network leading to and from the Essex Green Shopping Center.

Hanley, an adviser with NW Financial, discussed the tax-exemption deal.

“The application for financial assistance is a request for a 30-year tax exemption, which, as you all know, doesn’t mean taxes won’t be paid,” he said at the meeting. “There will be a payment made in lieu of conventional taxes. That payment, at stabilization, will be $1.2 million, which represents 10.5 percent of the annual gross revenue.”

Hanley said that in the second decade of the three-decade deal, the payment will go up to 11.5 percent, and in the final 10 years will go up another percentage point to 12.5 percent.

“There’s a number of things we’re getting for this concession, the first being 10 Rooney Circle,” he said. “10 Rooney Circle will allow us to not have to purchase or build a building for the library. It will also give us the revenue, which is about $600,000 a year.”

The $600,000 revenue comes from rent money paid by the TSA, which currently rents the third floor of 10 Rooney Circle. Trenk said the lease has about five years remaining on it, and when the town becomes the owner of the building, the rent will be income.

“No one is saying they’ll stay here permanently, they only have X number of years left on the lease, but if at some point they move out, that will be future availability for the town for whatever purpose, whether it’s to lease to a third party or use it as space for other government needs,” Trenk said at the meeting.

TSA has the option to break the lease with six months’ notice, but if they remain in the building until 2021, they are no longer allowed to do so. Krakoviak expressed concern at the meeting about loss of revenue, should the organization choose to leave.

“It’s a significant amount of money,” Hanley said. “But it either is replaced with revenue or the town finds a way to utilize that space.”

The four buildings on the Executive Drive property currently bring in approximately $1.49 million a year. According to Hanley, the redevelopment project will produce more revenue than the site currently is producing.

“The project would not be financially feasible without this assistance,” he said. “We’re not here to help developers, but the taxes on this site would create a burden that’s greater than this project would be able to bear on a financial basis.”

He also pointed out that when the town becomes the owner of 10 Rooney Circle and the land the dog park will be built on, the tax revenue will be lost.

Several residents asked the council not to approve the ordinance, saying that it will add to the burden that taxpayers already face in West Orange.

“Commercial properties should be developed in West Orange on the basis of economic viability, without the help of the taxpayers of the community,” resident Corrinne Miller said at the meeting. “With tax rates rising 8.5 percent this year and the federal government limiting the ability of taxpayers to take a deduction on their income tax to $10,000, which affects many, many people in West Orange, including myself, most of our homeowners are already hurting. This tax abatement giveaway does more harm than good.”

Miller pointed out the school district’s budget comes mostly from taxes, and a payment in lieu of taxes would decrease the amount of money schools receive each year.

“A 30-year gift is excessive,” she said. “Not all of us will be here to see the consequences, but what is being set in motion today will greatly affect the quality of life in West Orange many years from now, and will cause a tremendous loss in revenue over the 30 years for our public schools.”

Anita Strauss, a resident who spent 30 years as a member of the library board, said at the meeting that she would rather see improvements to the current library and in senior services, instead of development.

“When I moved here, my taxes were about $350 a year,” Strauss said. “They’re now about $9,000 a year. Tax abatements over a 30-year period cost me money.”

The second reading of the ordinance is scheduled for the Dec. 17 council meeting.

For more information please click the following link, https://bnerealestate.com/

  Executive Drive, FEATURED, Mayor Robert Parisi, Redevelopment, West Orange Budget, West Orange Public Library, West Orange Township Council