The needler in the haystack.

Thursday, September 16, 2010

PNC property project: Parking, PILOT present problems

Parking for retail customers is one of problems development faces.
On Monday, Plainfield's City Council tabled the two resolutions dealing with Frank Cretella's proposed mixed use residential-retail development on West 2nd Street property currently owned by PNC bank.

Those were
343-10) to execute a 'global agreement' designating Cretella's Landmark Developers LLC developer for the 'North Avenue extension (PNC)' of the original redevelopment plan and 344-10) to authorize a PILOT (payment in lieu of taxes) agreement for the project.

Before the items were tabled, Councilor Storch, who is Council liaison to the Planning Board, warned the Council and the Robinson-Briggs administration that UNRESOLVED PARKING ISSUES could endanger the success of the project.

Cretella is slated to appear before the Planning Board tonight for final site plan approval on the project.

Storch pointed out that the Cretella proposal does not include enough parking for the retail establishments that will occupy the first floor facing West 2nd Street (not to mention the proposed rooftop nightclub previously discussed by Plainfield Today, see here), and that the Robinson-Briggs administration needs to resolve the outstanding PARKING issue with the Union County Improvement Authority (UCIA) over use by the public of the parking deck situated at West 2nd Street and Madison Avenue.

The original developer's agreement between the City and the UCIA called for public use of the deck under certain conditions -- as well as many other unresolved items, including the PILOT covering the County Office Building -- all of which I have written about extensively (see notes at end of this story).

Unfortunately for Cretella and Plainfield taxpayers, the Robinson-Briggs administration has yet -- after nearly five years -- to resolve a single outstanding issue from the punchlist with the UCIA project. The failure to resolve the PILOT issue alone has cost the city hundreds of thousands of dollars in lost revenue.

The PILOT resolution (344-10) was tabled because the Robinson-Briggs administration had failed to include 'sunset' language that would limit the entire life of the PILOT agreement to thirty years and no more, no matter how many times the property may change hands.

Despite having expressly asked for the clarified language, the Council found it had not been included in the resolution. Councilor Mapp underscored the point by noting that the new owner of 1272 Park Avenue had gotten approval for a further 30-year extension of the PILOT on that property in complete contradiction of the spirit, if not the letter, of the original PILOT agreement.

PILOT agreements are a vexing matter for municipal governing bodies throughout New Jersey. They present a 'damned if you, damned if you don't' scenario because the state requires them as a precondition for its underwriting development costs, thus tying a governing body's hands.

Should the governing body have the chutzpah to refuse the PILOT, it faces the wrath of taxpayers because projects will not go forward; unbuilt projects mean that NO BENEFIT WHATSOEVER accrues to the taxpayers.

It is unfortunate that many taxpayers misunderstand the real advantages -- and disadvantages -- of PILOT agreements.

The advantage is that the ENTIRETY of the payments go to the city coffers, and in many cases those amounts can ACTUALLY EXCEED the revenue to the city if the property were paying regular taxes.

The disadvantage is that NOTHING GOES TO THE SCHOOL DISTRICT. In the case of age-restricted residences (such as 1272 Park Avenue), the exemption is less bothersome since there are (theoretically) NO CHILDREN using the school system.

When the project includes units that could house children using the school system (as in the Horizons project), other taxpayers are truly disadvantaged by having to pick up the share of school costs represented by those using the system but not contributing to it.
This is among other negatives of PILOT agreements as illustrated in the recent report by the NJ comptroller's office (see here, PDF).

Until the state cleans up the issues with the use of PILOTs (are you reading this, Gov. Christie!), there is little local governing bodies can do -- except, of course, to turn down development. Given the sad state of city coffers, who would contemplate that?
In the meantime, the Council -- at the prodding of Councilors Mapp and Storch -- seems intent to put a lid on the abuses by guaranteeing Plainfield's PILOT agreements will be for thirty years and no more. Period.

That is probably the best that can be hoped for.

Now, if we can just get the Robinson-Briggs administration to cooperate...


West 2nd Street Commons is on the agenda.

Tonight, 8:00 PM

City Hall Library

-- Dan Damon [follow]

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Anonymous said...

We don't need another PILOT. If you give them one, then I want one also.

Anonymous said...

TO anon 931, you are showing your shortsightedness in this matter.

What are you providing to the city, other than being another breathing body in the city?

Unless you have something to contribute, other than your taxes; something to benefit the city, you are not entitled to one. Put up 148 units then we can talk. PILOT is to spur development, its not a handout.

Anonymous said...

TO ANON 10:55

There is a huge difference between spurring development and encouraging smart growth. Cities understand that there are associated costs with every type of development. In certain places impact fees are the cost of doing business. To that end, HUD has a calculator that shows the additional cost per individual household. So the fact that the city gets 50K in taxes doesn't mean anything if it cost the city 45k in services delivered. Ok, except 5k and even more demands for it's overburdened crumbling infrastructure.

Furthermore, PILOTS have a negative impact on the funding our school system. Add to that the limited open space that currently exists for a population of 50,000+ and ask yourself how increasing our population density is a good idea. It is in fact a shortsighted strategy which limits long-term growth.

If we or more accurately City government focused on improving quality of life issues the city would be a more desireable place for residents. Businesses would surely follow without the need PILOTS.

Rob said...

The current administration and her gang of 4 are not going to address the parking or any other unresolved issue pertaining to that parking deck nor other parking issues throughout the city.
Perfect examples of cities utilizing PILOTs to their benefit would include Jersey City by the waterfront. They gave it away for a song WITH STRINGS ATTACHED. Jersey City has gained parks and playgrounds with contracted required maintenance from many of these developers. Build your building here, get a pilot --- BUILD AND MAINTAIN A PUBLIC PARK IN A LESS DESIRABLE AREA OF THE CITY. I too have an issue with loss of POTENTIAL funding toward a school district, but, as we have seen, The Plainfield School District does not utilize the free money the rest of the state is pumping into it, so why care if they get more?
If there were an administration that was responsive to the citizens of Plainfield the parking issue with that parking deck would be addressed and resolved, but we already know Sharon takes orders from Jerry who takes orders from Charlotte. So it's not going to happen. Again though, I recommend passing an ordinance for the apartment complexes to provide FREE parking to the residents of these towers so the majority of the cars are off the street.
PILOTs can be an incredible boom to the local economy when crafted intelligently upfront.