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Thursday, September 24, 2009

Monarch abatement tonight: Council discussion legal?

Mayor Sharon Robinson-Briggs' administration strained mightily to get Plainfield's City Council members long-promised information in anticipation of the tonight's re-introduction of an ordinance granting a five-year tax abatement to the Dornoch/Fishman/P&F entity behind the Monarch condos and Senior Center.

With the special meeting drawing nearer and nearer, Councilors were finally sent the information via email, but since some are said to have trouble accessing the documents, they were also hand-delivered. Talk about efficiency in government...

Tax abatements such as the Monarch proposal impact taxpayers directly (see Councilman Mapp's spreadsheet on the impact here).

(Aside: When PILOTs (payments in lieu of taxes) are granted -- which this is NOT, taxpayers are also indirectly affected by depriving the school district and the county of needed tax receipts,
meaning that picking up the abatee's share of those expenses unfairly increases the burden on all the other [residential and business] taxpayers. This is a correction of a statement in the original post; the error being caught by Olddoc -- Dan.)

Meanwhile, there are real questions about the legality of the Robinson-Briggs administration and the Council discussing the proposed ordinance in EXECUTIVE SESSION.

The reasons to discuss business behind closed doors are very specific and limited (see NJSA 10:4, the Open Public Meetings Act), and I have outlined them previously (see full post here) --

1. those considered confidential by law or court ruling;

2. those where release of information would impair receipt of federal funds;

3. material constituting an unwarranted invasion of privacy;

4. those relating to collective bargaining agreements;

5. those relating real estate matters, banking rates or investments using public funds

6. matters regarding protecting the safety and property of the public;

7. matters of litigation and attorney-client privilege;

8. personnel matters;

9. deliberations after a public hearing that may incur a fine, suspension or loss of license or permit
Thos are the nine reasons given in the statute. That's it.

The most commonly used reasons are contractual, litigation or personnel (confidentiality) matters. The Monarch abatement doesn't fall under any of those three categories .

As for #5, which does include 'real estate matters', my reading is the 'real estate' must involve 'public funds' of the governing body conducting the closed session.

The real estate in question, the property at 400 East Front Street, was sold by the City to the Union County Improvement Authority for $1. Since the City no longer owns the property and is not party to the developer's agreement, which is solely between the developer and the Union County Improvement Authority, it is fair to ask on what basis the discussion is being planned to take place outside public earshot.

At any rate, there appears to be some question whether the tax abatement ordinance will even be introduced, notwithstanding the legality of an Executive Session discussion.

Beyond this fly in the ointment, there are other questions the Council should get to the bottom of before advancing the ordinance --
1. Since Dornoch/Fishman/P&F approached Rahway for a tax abatement on a project there and was turned down, the question arises as to whether DPWUD Director Jennifer Wenson-Maier, who is also a Rahway council member, shared this information with the Robinson-Briggs administration and, if so, why the administration did not disclose this material fact to the Council in proposing the ordinance.

2. Does the tax abatement have any realistic prospect of advancing sales of the units?

3. What happens if, even granted a tax abatement, sales of units does not pick up and the developer defaults on the developer's agreement and/or bank financing?
And of course the Seniors want to know what's to become of their new Senior Center in the face of all these problems.

Let's hope we get some answers tonight, whether or not the abatement goes forward.

Oh yes, don't forget the Administration's budget proposal is also on tap.

City Council Special Meeting

FY2010 Budget Proposal
Monarch Tax Abatement ordinance
and other matters

8:00 PM Tonight
City Hall Library

-- Dan Damon

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active citizen said...

I can't be there tonight, have to work, but I hope the people there let the administration know that, we the people, are tired of the Robinson-Briggs side show and slight of hand. I don't see how the abatement could increase sales, as the Monarch, was a bad idea from the beginning and no one will pay that price for a condo in that part of town. No one in Plainfield or who knows Plainfield has said they would, and I've asked over a dozen people.

olddoc said...

Dan Thanks for the compliment by more lucidly expressing the concerns I tried to express in my blog. One point that you may be in error and needs clarification. I believe the Council can only grant an abatement on the CITY taxes, it has no power over the School or County. That is a point that needs clearing up even if this abatement question is moot because it may reflect on all abatements and PILOT properties.

Dan said...

Thank you for the correction, Olddoc!

In granting a PILOT (payment in lieu of taxes) scheme, the county and the schools are frozen out. I am amending the post.

Thanks again!

Anonymous said...

Re. ActiveCit's comment, it would be interesting to know the profile of the 13-15 buyers that have pending contracts with the Monarch. Assuming these buyers are real, what are their demographics, and how would the proposed abatement attract more like them?

A series of questions I would like asked tonight is why Dashield said in response to Mapp that the 13-15 contracts had "No closing dates ... because of the pending request for tax abatement." Is it because the legal wording of the contract must include the abatement terms, or is there other reasons?

What happens if the abatements are permanently abandoned? Are the contracts still valid or are they conditional on the abatement?

Is there an automatic price reduction, or reopened price negotiations, if the abatement is not authorized?

Might the lenders not approve some mortgages if the abatement is not granted?

And if any of the above is true, who led the sales company to believe that the abatement was such a sure thing that they could be used in sales pitches, let alone contracts?

Has anyone on the council actually seen one or more of the contracts (redacted or otherwise), or are they dependent on the administration and Fishman & Co. for full and accurate disclosure of the terms?

Anonymous said...

My understanding is that in the last few years a law was passed requiring any PILOT to pay the County a portion of the PILOT proceeds (still not as much as they would be entitled to under standard real estate taxing). I don't recall if this is state-wide or just Union County.

The school district does not receive anything under a PILOT agreement.

Pat Ballard Fox

Anonymous said...

Still no comments from Rahway councilwoman Jenny Wenson-Maier on why the abatement proposal from these same people was dropped in her city?