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.

PARKING

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.

PILOT

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...

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PLANNING BOARD

West 2nd Street Commons is on the agenda.

Tonight, 8:00 PM

City Hall Library

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• Plainfield Today on UCIA issues --
• July 11, 2006:  "Development: Where the rubber meets the road (Parking)"
  
• October 10, 2006: "The Joy of UCIA (Unresolved Issues)"
• October 11, 2006: "The Joy of UCIA (The PILOT)"
• October 13, 2006: "The Joy of UCIA: 13 for the 13th (Photo Essay)"

• NJ Comptroller:  "Municipal Tax Abatements" (PDF)
  

-- Dan Damon [follow]

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Property taxes: A mansion vs. mini injustice?

The mansion pays less than the cottage.

Plainfielders, like other New Jerseyans, love to hate their property taxes, among the highest in the nation.

But nothing sets a taxpayer's teeth on edge more than the perception that he or she is being taxed unfairly in relation to other taxpayers in their community, or even in their neighborhood.

Recently, my attention was called to one such disparity.

Here are the facts.

Modest cottage pays more taxes than mansion.

Property Number One

This snug two-story frame cottage was built in 2002 on a postage-stamp sized lot (less than a quarter acre) for which special approvals were needed. A modest 2,176 square feet, it is nestled among the 1920s-era houses on its little cul-de-sac, its soft blue clapboarding the only feature that sets it apart from its neighbors.

• Block 630 Lot 19
• Lot size: 50x128 irregular (< .25 acre)
• Total Assessed Valuation: 210,000 (Land: 43,700; Improvements: 166,300)
• Taxes: $13,038

The Mansion pays less than the cottage.

Property Number Two

This mansion, built in 1902, is one of the grandest (at an estimated 7,166 square feet) in Plainfield, occupying a prominent corner lot and is a keystone property of its historic district. Once home to Plainfield's wealthy Mellick family, in later years it was owned and operated by the Monday Afternoon Club. A low point in its recent history, some say, was its appearance in the 1990 horror flick Basket Case 2 (see more here).

• Block 638 Lot 9
• Lot size: 175x404 irregular (1.76 acres)
• Total Assessed Valuation: 198,200 (Land: 127,000; Improvements: 71,200)
• Taxes: $12,306

So, the cottage pays $732 more in property taxes than the mansion. The only way such a gross disparity in taxes will be addressed is in a total revaluation of the properties on the tax rolls.

Whether the mansion ended up paying more, the cottage paying less, or some middle ground, only a total revaluation would even begin to address this and other property tax inequalities throughout Plainfield.

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-- Dan Damon [follow]

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About that 'State Aid' notice on your tax bill

This notice appeared at the top of your tax bill.

Plainfield taxpayers received their FY2010 first- and second-quarter tax bills (belatedly) this week, and a notice at the top of the bill caught many people's attention.

In fact a reader was quite upset about it and posted the following comment on Thursday --

This comment doesn't have much to do with the article - maybe peripherally - but i see no references in your blog to this issue, so here goes.

Yesterday I got a letter from the City of Plainfield - tax advice about property taxes. For this year my property tax is around $7,000. OK I can live with that, an incremental (i.e., Small) increase from last year.

What scared the HECK out of me was the message in a box at the top, to the effect that Due to state aid, Plainfield does not have to charge me the REST of my property tax which is $12,000.

WTF???

I have never seen a notice of this nature on the tax advice before. This notice freaked me out and had me upset all day long. I called up Cory Storch to ask about it but he never returned my call. I am concerned that tripling my property tax would drive me out of my home.

I was very worried all day long. Then I went out to dinner and mentioned this issue to my dinner mates.

One of them is a retired Tax Manager and she explained to me that since Plainfield has Urban Enterprise Zones, part of the deal with that is that they do NOT charge me that extra property tax unless they lose their UEZ.

Essentially that whole notice in the box was a Scare Tactic. Plainfield wants me to think that if Gov. Christie cuts aid to municipalities, then my taxes will go up $12,000 per year.

THIS IS A LIE.

Brought to me by the Democratic government of Plainfield.

I imagine a whole lot of other homeowners got this notice and are similarly scared.

You should cover this issue.

Let's give it a try.

What does the notice say?

STATE AID USED TO OFFSET LOCAL PROPERTY TAXES

The budgets of the government agencies funded by this tax bill include
State aid used to reduce property taxes. Based on the assessed value,
the amount of this State aid used to offset property taxes on this parcel
equals: [DOLLAR AMOUNT]

Can we parse that? --

• government agencies funded by this tax bill: your property taxes are allocated not only to City government, but also the Plainfield public schools, and the County government (plus an Open Space Tax, not germane to this issue)

Keep in mind that Plainfield gets $100 million in state aid for the public schools, dwarfing the City's own budget and the measly $250,000 the city got in aid last year; this alone should account for a great deal of the dollar figure.

What is not made clear is any relationship between any or all of the 'government agencies' referred to.

THE COUNTY'S ROLE IN THE TAX PICTURE

Though the tax bills are FOR the City of Plainfield, and bear a Plainfield return address, taxes are actually computed at the County level. That is true throughout New Jersey's 21 counties. The counties are charged with seeing to it that the expense of running the County is fairly distributed among its municipalities, each of which has different assessed valuation scenarios. So, EQUALIZING each community's fair share of the County tax burden is the County's first task. Then the tax levies set by other bodies (municipality, school district, and -- in some cases -- fire districts) within the County are added in.

The total tax bill for each community in the County is actually computed by the County, and printed out as a statement with the municipality's name on it. These are then mailed out as the tax bill that we receive.

So, the bill is NOT 'a scare tactic by the Democratic government of Plainfield' unless you want to believe that the bills mailed to Westfield or Summit residents, containing the same notice, are scare tactics by the Republican governments of those towns.

A UEZ ROLE?

As for the commenter's friend's explanation that the Urban Enterprise Zone (UEZ) is involved, this is not the case.

The state's UEZ's are funded from SALES TAX RECEIPTS (not property taxes) in the designated zones. Belonging to a UEZ allows the participating businesses (not every business in a UEZ is qualified or tries to take advantage of the designation) to charge ONE HALF the state sales tax on certain purchases. Each UEZ's receipts are set aside in Trenton, the funds to be managed by the state for reinvestment in the local community by approval of projects submitted as project requests by the individual communities. Property owners in a UEZ are not excused in any way from their PROPERTY TAXES.

While the whole Urban Enterprise Zone program has nothing to do with your property taxes, the program has not escaped Gov. Christie's attention. Talk of using the UEZ fund pool toward the state's deficit would mean local UEZs would lose their fund balances and would be unable to fund proposed projects for the foreseeable future. (This could, for instance, impact the Mayor's proposed summer concert series.)

THE FUTURE OF SCHOOLS FUNDING

This is where taxpayers need to focus their attention. With the dissolution of the Abbott school districts (by way of legislation strongly supported by Assemblyman Jerry Green), state aid to local school districts will be reformulated over a period of time.

Per-pupil state aid for some area school districts.

While state aid to Plainfield's public schools would not disappear, the amount could change substantially now that aid will be calculated on the number of economically disadvantaged students IN EVERY SCHOOL DISTRICT STATEWIDE, and not just the so-called Abbott districts. Though the impact was to be delayed, I believe that was for TWO YEARS only, and that we are coming to the end of the second year, after which the decreased aid figure is to be worked into the local tax picture by a GRADUAL INCREASE in Plainfield's school tax burden, which has been relatively stable for more than a decade. (If I misunderstand this, I will gladly stand corrected.)

To this, we must add the threatened impact of Gov. Christie's proposal to scale back aid by up to 15% in the next state budget (which would be his first, starting on July 1, 2010). This is truly the scary part, and you can be sure that DEMOCRATIC LEGISLATORS (most of the Abbott district communities -- if not all -- are Democratic-leaning) will be mounting an offensive to soften that proposal as it affects their communities.

BOTTOM LINE

Could the Tax Bill notice be clearer? Yes. Should you be worried? Yes, but because of the state's fiscal situation, not because of the inept and confusing tax notice.

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-- Dan Damon [follow]

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UPDATE: Monarch condos developer defaults on Rahway project

Monarch condos sign regularly blows over in gusty weather.

Coming down Plainfield East Front Street the other evening, I noticed a lone third-floor window lit up in The Monarch condos, the development by Glen Fishman/Dornoch/P&F Management.

With only a single unit sold and closed, the project is languishing despite the best efforts of TWO local real estate powerhouses -- ERA Reed Realty and Sleepy Hollow Realtors -- to get buyers for the project.

Now comes word that the city of Rahway is preparing an ordinance to buy a vacant property that Dornoch defaulted on (see Rahway Rising, here).

How long can P&F sit here in Plainfield with all these unsold units?

How long can the City afford to wait for some ratables or PILOT payments to show up from the project?

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• Rahway Rising: "City moves to buy Beverage Shop building"

-- Dan Damon [follow]

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NJ tax forms not available at Library. What to do?

Plainfielders will no longer find New Jersey tax forms stacked in huge piles by the pickup table near the entry.

Because the state is trying to save money (estimating they will save half a million dollars by not offering the forms through libraries and post offices -- I can attest to the waste, having helped to dispose of carton upon carton of leftover forms each year when I worked at the Plainfield Public Library).

What's a taxpayer to do?

All New Jersey tax forms are AVAILABLE ONLNE and can be printed out and mailed or filled out online for online filing (see forms and instructions here).

For those who have no computer or Internet access at home, reference librarians at the Plainfield Public Library will help patrons use the library's computers to access and print out the forms online.

Taxpayers may also call the state to request they be mailed directly at (609) 292-6400.

Federal tax forms will still be available at the Plainfield Public Library.

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• Division of Taxation: "Gross Income Tax Returns"
  

-- Dan Damon [follow]

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The Council meeting in 11 words, plus or minus

Last night's Plainfield City Council meeting can be summed up in 11 words: When all was said and done, more was said than done.

The Robinson-Briggs administration (surprise!) failed to bring a budget proposal to the table, as had been promised at the last Council meeting, which promise became one reason for calling this special meeting.

Upon a motion by Councilor Bill Reid, the Monarch condos tax abatement ordinance was withdrawn (yet again), evidently because sufficient information for the Council to feel it can go forward is yet to be produced by the Administration. CORRECTION: I surmised. The reason for the withdrawal of the ordinance was that no Executive Session was -- or could be -- held, as Councilor Mapp makes clear in a blog post published mid-morning today (see here).

(An attorney with Wiener & Lesniak, the law firm of Sen. Ray Lesniak, which represents the Dornoch/Fishman/P&F entity, along with a woman attorney for the UCIA accompanying him, got up and left the room without a word after the proposed ordinance was withdrawn. I wonder why he was there at all, with his big file folder of papers.)

An ordinance to EXCEED the FY2010 municipal budget appropriation limits and establish a 'cap bank' was passed on first reading, with only Councilor Storch dissenting -- because he thought a little externally applied fiscal restraint would be a good thing. You will want to pay attention to the discussion and the Robinson-Briggs administration's rationale as this one unfolds.

An unwarranted attack of bloviation was brought on by a resolution approving Councilor Mapp's attendance at the annual Black Issues Convention. Ostensibly meant to provide transparency concerning Council members' expenditures (there has been serious recent abuse, if you recall), the discussion was anything but razor sharp about why Mapp's minor expenditure ($375) was singled out and whether every Councilor will be REQUIRED to jump through the hoops as Mapp was made to do.

Councilor McWilliams politely inquired whether there was a policy on Councilors' expenses and if there was, whether it could be shared with the Council members. It occurred to me to wonder why no other Councilors were planning on going to the Convention, attendance at which was de rigueur when Malcolm Dunn was on the Council.

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-- Dan Damon

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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

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-- Dan Damon

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Monarch: Dashield uninformed or misleading?

Plainfield residents will have TWO opportunities tonight to speak to the proposed tax abatement for the Monarch condos which is expected to have its second and final reading of the ordinance at the Council business meeting.

Councilor Adrian Mapp has done an invaluable service by posting City Administrator Marc Dashield's responses to residents' questions that Mapp submitted to him back in August (see here).

I have posted the Monarch condos DEVELOPER'S AGREEMENT and TAX ABATEMENT IMPACT online as source documents to help you get to the bottom of the true costs to Plainfield taxpayers and the accuracy of Dashield's responses to Councilor Mapp (see here).

You may also want to check Bernice's Plaintalker for an overview of the issues involved (see here) and Olddoc's Potpourri, for his take on Dashield's 'truthiness' (see here).

Checking some of Dashield's replies to Mapp's questions makes one wonder about the competence of what passes for 'administration' at City Hall. Consider the following --

Veterans' Center

Dashield responds to question 3 by saying '...the Veterans Center space is not connected to all the units being sold...'

The Developer's Agreement addresses this issue in two places: Section 7. (a) (iii) says the veterans area shall be used as a sales model until all units are sold (page 4), and Section 8. (b), which provides that upon sale of ALL the condo units, the developer shall convey 'a fee simple interest' in the Veterans Center to the City for $1 (page 8).

The plain language of the agreement seems to contradict Dashield's assertions.

Fate of the Senior Center

Does the City lose the Senior Center if the developer goes belly up? In his answer to Mapp's question 4, he seems to imply it by saying '...the failure of this project would affect service delivery to the senior community...'

Yet in the Developer's Agreement, Section 9 (b) says that 'upon issuance of a Certificate of Occupancy for the Senior Citizens Center, ANY HOLDER OF A MORTGAGE OR OTHER ENCUMBRANCE OR LIEN UPON THE PROPERTY in accordance with this Agreement shall execute a WRITTEN RELEASE OF THE SENIOR CENTER in recordable form' (page 9, emphasis mine). Does this mean the Senior Center is safe, whatever happens to the developer?

When Dashield first pitched the abatement idea to the Council, it was as an incentive to THE BUYERS OF THE CONDOS to ENCOURAGE SALES. In his reponses to Mapp, he now says (answering question 11) that 'the need for the abatement is DIRECTLY RELATED TO THE COST OF CONSTRUCTION OF THE SENIOR CENTER', which appears to be a classic 'bait and switch' maneuver.

Add to this the fact that EVEN IF THE ABATEMENT IS GRANTED, THERE IS NO GUARANTEE IT WILL BE EFFECTIVE IN BOOSTING SALES.

Weren't we taught in school that in capitalist economies like those of the United States, prices are set by the market -- that is, what a willing, ready and able Buyer is willing to offer to a ready, willing and able Seller? Does that mean the city is proposing to abandon strict capitalist doctrine and bail out the project by getting the taxpayers to foot the bill for the developer?

Is the Seller (Dornoch/P&F/whatever) UNWILLING or UNABLE to meet the real possibility that even it's much-lowered prices are still too high for the market conditions that exist today?

In any event, the Council is facing a difficult decision tonight, upon which much hangs.

Even if the abatement is granted, is there any assurance TRUE MARKET-RATE CONDO DEVELOPMENT will take off in Plainfield?

The Administration has already let the cat out of the bag on that question by proposing that the development being considered for the PNC (United National) parking lot on West 2nd Street would be financed as AFFORDABLE HOUSING. Condos, not!

Annoying postcript: The Robinson-Briggs administration has not made any mention of the rooftop solar panels required by Section 7 (a) of the agreement (page 4). Are they there? If not, why not and what is the 'cure'?

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City Council Business Meeting

Tonight | 8:00 PM

City Council Chambers/Courthouse
Watchung Avenue and East 4th Street

The Public may speak at beginning and end of meeting
as well as during the hearing on the tax abatement ordinance.

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• Mapp: "Monarch tax abatement questions: Some answers"
• Plainfield Today: "Monarch Condo docs: Developer's Agreement; Abatement impact"
• Plaintalker: "Monarch issues continue"
• Doc's Potpourri: "Monarch status and Dashield's reply"
  

-- Dan Damon

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Tax bill update

Those busy beavers at the city website posted an advisory about your tax bill -- which many people had expected in their mailbox this past week, and had inquired about at City Hall (at least until the phones went down).

Fretting taxpayers are assured the tax bill is 'due to be mailed next week', meaning the week of August 10, with payments due September 9, 2009.

Comforting, no?

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-- Dan Damon

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Protect Plainfield's interests in condo tax breaks

City Council needs to protect Plainfield's interest in the proposed tax breaks for the Senior Center condos, especially given the sketchy nature of the Robinson-Briggs administration's proposal.

After nearly four years, it has become clear the Robinson-Briggs administration is averse to doing real homework in advance of floating proposals (dare I say IN WRITING?) that would anticipate the issues involved and questions Councilors might ask.

The proposed tax break for the condo buyers is just another example, beginning with the apparent 'walk-on' of the proposed ordinance.

Saying that condo buyers needed an incentive in this market, Corporation Counsel Dan Williamson fielded questions raised by the Council. Eventually the public learned that the tax break was proposed for actual condo owners, not the developer; that the abatement was for five years and would require the payment of only 40% of the assessed valuation of the condo properties; and that the Council would be able to tinker with the conditions.

As I heard Council President Burney talking about how important the proposal was while waving the 'bloody shirt' prospect of the units becoming rentals, my Realtor^® brain kicked in.

What about the importance of protecting Plainfield's interests?

Here is some tinkering the Council should consider that would protect the rest of us from being scammed --

• Require that buyers be qualified for their mortgages BASED ON THE FULL TAX ASSESSMENT, not the rebated amount. Why? We don't need to have buyers whose viability would be at risk were they required to pay the full tax freight. (Mortgages use a formula called PITI -- Principal, Interest, Taxes and Insurance -- to calculate how much an applicant is qualified to borrow.) If it's to be an ENTICEMENT, make sure it's for FULLY-QUALIFIED BUYERS ONLY, and not a gimmick for lowering the quality of buyers.
  
  
• Second, NO TAX BREAKS FOR NON-RESIDENT OWNERS. Let's not subsidize speculators who buy and then rent out the unit. And put some teeth in it: Require certification of residency, with both revocation of the privilege and criminal perjury charges facing cheaters.
  
  
• Third, PUT PENALTIES IN PLACE FOR PREMATURE SALES of the abated units. In other words, the tax break should be for legitimate buyers who plan to stay in the unit at least five years. That means NO FLIPPING. Sale of the unit before the five-year marker could be penalized by requiring the FULL TAXES ON THE UNIT TO THE DATE OF CLOSING to be paid to the City at the closing table out of the sales proceeds. An even stricter proposal would be to require payment of the FULL FIVE YEARS' WORTH OF TAXES for any premature sale.

In other words, SCAMSTERS NEED NOT APPLY.

There is no reason Plainfield should play the 'foolish virgin' in any development schemes.

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-- Dan Damon

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The reason for the season: Tax Appeals

As thoughts turn to Spring, yards and gardening, some Plainfielders will find another reason in the season: property tax appeals.

Appeals on property tax assessment are due by April 1st, and those who are thinking of it need to get cracking.

Property owners need to beware though that the burden of proof is on them. That is, they will need to provide accurate comparable sales as of October 2008 in order to challenge their property tax assessment.

There is some feeling that even in these challenging times -- where fewer sales mean there are fewer comparables to draw upon -- homeowners may be drawn into the process owing to the successful appeals by commercial property owners.

When commercial property owners win reduced assessment -- and thereby lower taxes -- the burden of meeting the taxes needed to run the municipality shifts incrementally toward the residential property owners.

If you are considering a tax appeal, do yourself a favor: Inform yourself and consider professional assistance.

The NJ Law Blog has a useful article (see here), and the state has a brochure available online (see here, PDF), which those who consider an appeal should read carefully first.

Secondly, chances of a successful appeal are increased by using professional help -- read: an attorney.

To find a whole passle, just Google "tax appeals"+"new jersey".

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• NJ Law Blog: "Tax appeals: Who has the burden of proof?"
• NJ Treasury Dept.: "Tax Appeal Brochure" (PDF)
  

-- Dan Damon

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Plainfield: Union County Property Taxes Compared

Union County, New Jersey. (Click on image to enlarge.)

Plainfield's 2008 property taxes compared with other Union County towns, including year-over-year and five-year changes.

Union County: 2008 Property Taxes
TOWN	AVERAGE TAXES 2008	2008 vs. 2007 INCREASE		2008 vs. 2003 5-YEAR INCREASE
Summit	$14,057	$502	3.9%	$3,712	31%
Westfield	$12,234	$747	5.4%	$2,943	27%
New Providence	$10,601	$487	4.4%	$2,587	29%
Scotch Plains	$10,364	$470	4.2%	$2,414	27%
Berkeley Heights	$9,447	$358	3.3%	$2,194	27%
Fanwood	$9,156	$479	5.2%	$2,080	27%
Springfield	$8,763	$428	4.9%	$1,968	27%
Mountainside	$8,561	$559	6.1%	$2,120	28%
Cranford	$8,452	$410	4.8%	$2,190	32%
Roselle	$8,384	$702	9.2%	$2,355	36%
Clark	$8,177	$295	2.9%	$1,586	20%
Hillside	$8,036	$520	6.6%	$2,409	39%
Roselle Park	$7,745	$404	5.3%	$2,161	38%
Garwood	$7,500	$536	6.2%	$1,646	25%
Union Twp	$6,885	$254	3.7%	$1,703	31%
PLAINFIELD	$6,758	$364	5.5%	$1,772	34%
Linden	$6,636	$443	6.9%	$1,988	40%
Rahway	$6,420	$260	3.7%	$1,465	27%
Elizabeth	$6,411	$368	5.5%	$1,794	32%
Kenilworth	$6,205	$241	3.5%	$1,680	33%
Winfield	$3,001	$276	10.1%	$912	44%
NOTES Plainfield's average ranks 6th from the bottom in Union County property taxes. Average Union County 2008 tax bill: $8,540. 2003-2008 rise in County average was $2,138 or 31%. Taxes include GARBAGE in: Elizabeth, Garwood, Hillside, Kenilworth, Linden, New Providence, Rahway, Roselle, Roselle Park, Scotch Plains, Springfield, Summit and Union. Taxes include SEWER assessments in: Berkeley Heights, Cranford, Garwood, Kenilworth, Mountainside, New Providence, Rahway, Roselle, Springfield and Westfield. New Providence and Scotch Plains also include a local assessment for Open Space Preservation.

Data: Union County Board of Taxation.

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-- Dan Damon

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Will Verizon deliver Plainfield a painful budget surprise?

Declining landline use prompts Verizon move.

Plainfield taxpayers will be concerned to learn whether Verizon will be claiming to be exempt from 2009 local taxes for its telephone poles, lines and switching equipment, as it has already notified several North Jersey towns.

The hit in Plainfield could be substantial, since our six-square-mile community is crisscrossed everywhere with poles and wires (except for the central business district, where lines are underground) and we have a switching center at 4th and Park as well as other locations in both the eastern and western parts of the city.

For instance, Rochelle Park in Bergen County receives about $500,000 yearly for its switching station. A figure of that magnitude suggest Plainfield could be impacted even more than this.

Verizon is making the move because of the drastic drop in landline services, which is continuing to accelerate.

In a recent story in the Ledger by business writer (and Plainfield resident) Tom Johnson, a study by Nielsen suggests nearly 1 in 6 homes nationwide relies exclusively on cell phones.

The story goes on to note that in the year ending June 2008, Verizon had lost 6 million consumer landlines nationwide while adding 14 million cell phone customers.

A budget hit of the magnitude other New Jersey towns are facing would force the Robinson-Briggs administration to consider cutting services or raising taxes even more.

Stay on the line...

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• Record: "Verizon wants to leave towns holding the bag"
• AP: "Verizon may halt certain tax payments to towns"
• Ledger: "Landlines losing their grip"
  

-- Dan Damon

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Should Plainfield revalue its properties?

Is it time for Plainfield to revalue its properties?

The amount a property owner pays in taxes is determined by the assessed value of the land and buildings (called 'improvements') and the tax rate, which is set annually by the County and based on budgets for the municipality, schools and the county.

At the time a community values its properties, the assessments are supposed to reflect actual market conditions. Plainfield's last revaluation took place in the early 1990s, and the assessments on our books (except for new construction or properties revalued because of substantive improvements) reflect those older market conditions.

Municipalities undertake revaluations at different times, and the potential exists for a town to carry an unfairly large share of the county's tax load if its assessed values are higher than other towns in the county. Counties attempt to level the playing field by assigning a multiplier value which is intended to make each town more comparable to other towns and to approximate current market conditions.

This all works reasonably well in good times, but these are not good times.

Last Thursday, the city of Paterson sued Passaic County and ten other towns in the county over this very same issue, contending that it is carrying an unduly heavy share of the county tax burden.

Because our revaluation took place over 15 years ago, Plainfield may not have the same complaint.

However, with market values depressed and unlikely to recover any time soon (many experts are suggesting a five or six year slump in prices), Plainfield's City Council might be doing Plainfield taxpayers a favor by considering revaluation under today's market conditions.

Read more about the thinking on these issues here...

Property owners turn to tax appeals to ease hard times

Facing hard times and falling property values, New Jerseyans are turning to tax appeals as a way to ease financial burdens.

Well-prepared property owners who can document that a property's value has declined stand a chance that they can get their assessment, and thereby their tax bill, knocked down significantly.

Several items need to be covered to enhance chances for success. Read more here...

Is the County shredding your money?

Plainfielders may wonder what all the huffing and puffing is about with the County's paper-shredding program.

As usual, after putting up the blogs yesterday, I sat down with my final cup of coffee for the day and read the (physical) papers.

The story on Union County's paper-shredding program piqued my interest. I remember that they previously had a stop in Plainfield, and was curious to find out how it is going.

I am a sucker for these 'green' ideas, but when the taxpayer's dollars at are at work, it pays to cast a baleful eye. Though the project is said to be funded by a DEP grant and not out of the County budget directly, it seems it's only PARTLY funded by the grant.

Ledger reporter Bob Misseck did his duty and pulled some numbers from Union County spokesperson Sebastian D'Elia -- so far this year the program has cost $3,386 and the County has been rebated $735, or about 22% of the cost.

With these miniscule dollar amounts, it sounds like the main beneficiary has been Freeholder Bette Jane Kowalski, who champions the program, and is rumored to be headed to Trenton once Linda Stender is safely ensconced in the 7th Congressional District seat.

Sounds like what is needed is more promotion of the benefits of having your documents shredded for free.

Maybe someone should tell the pols that Chris Christie is looking into.

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• "Mobile shredder program grows"
• "Safe Shredding, LLC" -- The firm running UC's and many other County programs.

-- Dan Damon

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