A question was posed the other day in The Jersey Journal by a Journal Staff writer? Is tax revenue loss really a win for city? "Jersey City lost $80M last year to tax abatements": Are deals for high-rise developments worth high cost to city budget?
Tax revenue loss undoubtedly is a huge problem for the city of Jersey City and its tax-paying residents who subsidize the county budget and the school budget. The trade-off they say is affordable housing, bologna. Folks who need affordable housing, cannot always secure mortgages to purchase the condos. Under the PILOT gimmick, payment-in-lieu-of-taxes, is nothing more than a huge tax savings for developers.
City keeps the PILOTS and only 5 percent goes into the county budget as the school budget receives nothing. The developers are crying, saying they wouldn't be able to build the towers with 172 affordable units without the abatements. Michael Yun, an independent-minded councilman made a very good point: they are not building because of tax abatements, they are building because there is demand.
Developers under PILOT pay a set amount, instead of the normal tax rate, causing the city of Jersey city to lose $80 million in recognizable tax revenue. Eighty million dollars more in the city coffers can hire more police and fire personnel, build more schools and most of all decrease the tax burden on the residents who have lived in Jersey City for decades.
These so-called affordable units are purchased by many rich folk from New York City who are coming over here to Jersey City for a song. Mayor Full-of-it and his council members are not stupid. Neither are the developers, who pout, and moan, that they need the abatements to build affordable units.
Common sense, tells you developers would rather build in Jersey City on the cheap than over in New York City for more. The mayor and his council cronies, with the exception of Michael Yun and Rich Boggiano, try and sweeten the pot, so to speak, just by mentioning affordable units. That is nothing more than shrewd marketing on their part to grant these developers generous abatements.
Jersey City properties can sell itself, because of its close proximity to New York City. Goldman Sachs, where Fulop used to work, saved $4.9 million in tax savings from abatements; Harborside saved $4.9 million; 545 Washington Blvd. saved $2.8 million; 70 Hudson Street saved $2.4 million; and 480 Washington Blvd saved $1.9 million.
The question begs, why would these developers want to go over to New York City when they can stay in Jersey City, freeload on tax savings from abatements and get the candy store for free?
Fulop is not the only mayor in JC that has awarded tax abatements, as other mayors before him gave their fair share of abatements.
KEVIN C. STANLEY
JERSEY CITY