Development in South Orange

Rob_Sandow,

You're not correct about the 30 year PILOTs for the two resolutions. These areas are not in a redevelopment zone. 30 year Pilots can only be given in a redevelopment zone. The sites covered by the two resolutions are in a rehabilitation zone. There is a five year tax PILOT for rehabilitation areas. You might have gotten faked out because the resolutions are for the grant of Conditional Redevelopment Agreements, which is a bit confusing, since the term is used in both redevelopment areas and rehabilitation areas.

jayjay said:
You want diversity and proximity to NYC and affordable housing, try Clifton. 81 languages spoken here. Free parking at the train station, or $3/day at the Montclair University NJTransit parking deck. And if you're 55+, a great community of 800 homes of very welcoming residents. (Some units in the complex are in Woodland Park.) Never thought I'd move from SO to Clifton, but no regrets. Go figure.

That's really interesting, thanks for the tip!

relx said:

tom said:
If there is industrial/ commercial property near the railroad tracks lying fallow, why are people trying to force an animal shelter into a residential neighborhood?

I don't think people are trying to "force" an animal shelter into a residential neighborhood (BTW--its not something filthy like a slaughterhouse.) They just want a shelter--wherever in town it ends up being.

Actually there is a loud contingent who wants an animal shelter and they want it exactly where the JAC was. I think it's totally unreasonable, but there they are.

My neighborhood has turned over significantly in the past few years. We just had a block party and it's not, "Where did you move from?" Rather, it's, "What neighborhood in Brooklyn did you move from?" (They're all lovely. That's no judgment. I just want to refute the idea that people from Brooklyn aren't interested in moving here.)

I totally agree. We actually just had friends move here from Brooklyn last month, and they said Map/So is "on the radar" of several of their former neighbors as well.I think our vibe is doing just fine.

cramer said:
Rob_Sandow,
You're not correct about the 30 year PILOTs for the two resolutions. These areas are not in a redevelopment zone. 30 year Pilots can only be given in a redevelopment zone. The sites covered by the two resolutions are in a rehabilitation zone. There is a five year tax PILOT for rehabilitation areas. You might have gotten faked out because the resolutions are for the grant of Conditional Redevelopment Agreements, which is a bit confusing, since the term is used in both redevelopment areas and rehabilitation areas.

Thanks Cramer. Why do the resolutions call for "redevelopment" agreements if the properties are not in redevelopment zones?

Folks, my guess is the people you're talking about moving in, moving from town to town, having babies and moving from Brooklyn ... are buying HOUSES.

The available 2-BR apartments (which is desirable if you're having babies) at the Gateway go from $3500 to $4,000 a month, according to Rent.com.

The ad copy for "The Avenue" clearly indicates who it's targeted to:

"Walk into The Avenue at South Orange and you’ll immediately understand that you are surrounded by opulence and elegance, with more amenities than you could ever dream of..." A STUDIO there (not conducive to growing families) will run you $1700 a month. A 2-BR there is $4200 a month.

A one-bedroom at Gaslight Commons starts at $2,332 and two BRs go to $4,642 a month.

These prices are for rent alone -- money out the window each month. All those amenities, not to mention insurance and utilities, commutation, food, and the rest of what it costs to live -- is on top of that.

I realize it's just my humble opinion, but my guess is that people moving into opulent luxury apartments at these prices are different from the couple with one baby (and another on the way) from Bay Ridge who just bought the house down the block from you.

Here are my two questions:

1) how much money has accrued in the Open Space Fund that is included in my property taxes as a surcharge each year?

2) how much money does Orange lawn want for their "orange lawn" on Ridgewood?

I ask these questions not because I want the town to buy the parcel, but because I don't understand why we have the fund if we won't even "consider" the opportunity when available. Otherwise why have it?

This is very different than the redevelopment of the 4th street properties . . .

annemarie said:
My neighborhood has turned over significantly in the past few years. We just had a block party and it's not, "Where did you move from?" Rather, it's, "What neighborhood in Brooklyn did you move from?" (They're all lovely. That's no judgment. I just want to refute the idea that people from Brooklyn aren't interested in moving here.)

Not sure where you got the idea that anyone thinks people from Brooklyn aren't interested in moving here.

This has been true for decades. We came from Brooklyn in 1989 -- to buy a HOUSE. We HAD an apartment in Brooklyn.

Our new neighbors are from Brooklyn. New neighbors on next block arefrom Brooklyn.

jameskpolk said:
Our new neighbors are from Brooklyn. New neighbors on next block arefrom Brooklyn.

Did they rent luxury apartments? Or did they buy houses that have been here for say, 50 to 60 years -- or more -- with back yards?

I think we're focused in this thread about Development in South Orange ... not just who's moving here now.

Juniemoon said:
Folks, my guess is the people you're talking about moving in, moving from town to town, having babies and moving from Brooklyn ... are buying HOUSES.
The available 2-BR apartments (which is desirable if you're having babies) at the Gateway go from $3500 to $4,000 a month, according to Rent.com.
The ad copy for "The Avenue" clearly indicates who it's targeted to:
"Walk into The Avenue at South Orange and you’ll immediately understand that you are surrounded by opulence and elegance, with more amenities than you could ever dream of..." A STUDIO there (not conducive to growing families) will run you $1700 a month. A 2-BR there is $4200 a month.

A one-bedroom at Gaslight Commons starts at $2,332 and two BRs go to $4,642 a month.
These prices are for rent alone -- money out the window each month. All those amenities, not to mention insurance and utilities, commutation, food, and the rest of what it costs to live -- is on top of that.

I realize it's just my humble opinion, but my guess is that people moving into opulent luxury apartments at these prices are different from the couple with one baby (and another on the way) from Bay Ridge who just bought the house down the block from you.

According to the Gaslight website, the most expensive apartment is $3600. There are four apartments available right now, all in the 2700-2800 range. Well that's not cheap, that is about 2/3 of what apartments are going for in Brooklyn.

Directly from Rent.com:

Gaslight Commons(236)
28 West Third Street, South Orange NJ 07079 Map

$2332 - $4642 1-2 Beds Pets OK

(973) 947-8780

It's a bit unrealistic to expect low rents in a high tax municipality, no?

The building owner has to pay property taxes and upkeep on properties and add a profit in there, as well.

Juniemoon said:
I realize it's just my humble opinion, but my guess is that people moving into opulent luxury apartments at these prices are different from the couple with one baby (and another on the way) from Bay Ridge who just bought the house down the block from you.

Any facts to back up this opinion?

dave said:
It's a bit unrealistic to expect low rents in a high tax municipality, no?
The building owner has to pay property taxes and upkeep on properties and add a profit in there, as well.

This.

I just don't understand how anyone can expect anything different. It's the reality of M/SO towns and it's not going to change anytime in the near future.

We saw the writing on the wall for our family. We're paying for college while knowing that retirement is not all that far away, so it didn't make sense to stay in M/SO. It's not affordable or sensible, so we moved.

We really, really love our new (smaller, less expensive, significantly lower property taxes) house and we're enjoying getting to know a new community. Our neighbors are great. Life goes on (and we still attended Maplewoodstock)

Rob_Sandow said:

cramer said:
Rob_Sandow,
You're not correct about the 30 year PILOTs for the two resolutions. These areas are not in a redevelopment zone. 30 year Pilots can only be given in a redevelopment zone. The sites covered by the two resolutions are in a rehabilitation zone. There is a five year tax PILOT for rehabilitation areas. You might have gotten faked out because the resolutions are for the grant of Conditional Redevelopment Agreements, which is a bit confusing, since the term is used in both redevelopment areas and rehabilitation areas.

Thanks Cramer. Why do the resolutions call for "redevelopment" agreements if the properties are not in redevelopment zones?

Rob - The term "redevelopment agreement" is used in the NJ Local Redevelopment Law 40A:12A-7.

http://www.state.nj.us/dca/divisions/dlgs/programs/au_docs/40a_12a_1.pdf

conrail said:
Here are my two questions:
1) how much money has accrued in the Open Space Fund that is included in my property taxes as a surcharge each year?
2) how much money does Orange lawn want for their "orange lawn" on Ridgewood?
I ask these questions not because I want the town to buy the parcel, but because I don't understand why we have the fund if we won't even "consider" the opportunity when available. Otherwise why have it?
This is very different than the redevelopment of the 4th street properties . . .

As I recall, the Open Space Trust Fund accumulates around $225,000 each year and has done so since it was created in 1999. (this is funded by an extra tax of 1 cent per $100 of assessed value on all of our properties)

The problem is the "Open Space Advisory Committee" which is tasked with making recommendations on how to utilize the money hasn't met in years and 2 years ago, the BOT (Led by Howard Levison) passed Resolution 2013-051 giving them broad powers to use this fund for maintenance, rather than acquisition.

Since it's creation, I believe the majority of the money collected has gone towards the River Corridor project and other maintenance. I do not believe any open space acquisition has occurred. While compliant with the law, it is not in the spirit in which the extra tax was created.

Juniemoon said:


Directly from Rent.com:
Gaslight Commons(236)
28 West Third Street, South Orange NJ 07079 Map
$2332 - $4642 1-2 Beds Pets OK
(973) 947-8780

The NYTs has an answer for you (I'm not being snarky and recognize this is not for everyone)

http://mobile.nytimes.com/2015/07/12/fashion/last-stop-on-the-l-train-detroit.html?smid=nytcore-ipad-share&smprod=nytcore-ipad&_r=2&referrer

If someone is buying a house here, in terms of median prices, that seems to be right in line with what they'd be paying, if not less- plus no additional maintenance costs and probably lower utilities. Sure, they're not getting a big house for that money, but some people don't want it.

There may be people in town who choose to downsize and move there for precisely that reason.

Rob_Sandow said:

kibbegirl said:
Does anyone know how long PILOT's last? How long are new developers exempt from taxes?
What irks me more than anything is that developers who don't live here and don't give an ish about our community, also don't pay taxes. Home owners are once again made to support not only a school system but in essence, new development.
More traffic. Less parking. More students into the school system. And our booby prize? No tax help.

PILOTs last 30 years, since according the the resolutions that Michael posted, these are being awarded to "redevelopers". Some misconceptions should be cleared up though.

First, PILOTs do not eliminate the revenue to the Village from the development project. They remove the property from the tax rolls and instead allow for a "Payment in Lieu of Taxes", 95% of which goes to the Village, with 5% going to Essex County and nothing going to the schools. At first glance this may seem like our school system is getting cheated, but is much more complicated than that in reality.
The school system is already 57% of our local taxes, with about 16% going to Essex County and 27% going to the Village. South Orange pays about twice as much per student into the school system as Maplewood does. Our percentage increases every year due to the apportionment ratio that comes from the county, which continues to assign a larger portion of school tax to South Orange annually. This is calculated based on the relative property sale prices annually between the towns. The unspoken truth is that South Orange issues PILOTs, in part, to try to push more of the cost of the school system onto Maplewood. There are other reasons for PILOTs, but this is certainly one driver. Maplewood issues PILOTs for the same reason.
As for the revenue generated by PILOTs, this is where we could do much better. There are a few formulas for PILOT valuation allowed by state law, but the one most often used is a number that is somewhere between 10% and 15% of projected annual revenue, or a number that starts at 20% of full tax rate and ratchets up in increments of 20% every 6 years over a 30 year period, whichever is greater. All of our PILOTs have been at 10% of revenue. In the case of 3rd and Valley, the PILOT is estimated to be around $500-600,000. After about 15 years, we should start to see an increase due to the % of full taxes kicking in. If we had negotiated it at 15% instead of 10%, we could have gotten an extra $200-300,000 in Village revenue every year for the next 15 years. These are all very rough numbers but in the ballpark.
Bottom line is I am OK with PILOTs but we should not be subsidizing high end apartments within a 1 block walk of our train station. We should play hardball and get the best PILOT we can get. In today's market, I'm sure we can get a better deal if we shop around. This is not 2009 anymore.

I feel like I just attended a combo class on economics, public school funds and real estate -- and that's a good thing! Thanks so much for the clear cut breakdown. Wish I could book note your response.

Regardless of the over development question, a piece in this analysis ought to include what the tax revenue is currently and what will it be post development? That would help to put this in perspective.

IMO. Aesthetically The 3rd/valley development is amazing. The architecture truly fits and it's not apparent how dense it is with homes and garage. Hopefully other developers. Will have similar aesthetic sense.

I'm not against replacing the Monty Motors building, but I think the general scale of it is fine. That thing at 3rd street is a behemoth and you can see if from up the hill because it's so tall. Additionally, I'd say that two things I see happening at 3rd street that I would like to see avoided at 4th street are the lack of safe pedestrian access along the perimeter of the project, and I don't think we should be paying a police office to stand there and block the street for the duration of the construction.

ETA: Anthropolgie is owned by Urban Outfitters, owned by Richard Hayne, who is a big supporter of Rick Santorum. Make of that what you will, please.

Well, we don't pay the policeman, the contractor does. And the sidewalk is a temporary inconvenience. One thing I wish was that there was some requirement to move the nearby utility wires underground, but I know that's a tall order.

Good to know about the payment of the police. I see plenty of construction in the city where pedestrian access is maintained throughout the project.

Yes, a lot of city projects have sheds over the sidewalk and don't extend to the curb. This goes right to the street. It would have been nice if they could have minimized the closure, though.

In addition to Rob_Sandow's excellent explanation, South Orange receives approximately double the amount in municipal taxes that it would have received with normal taxes. The bottom line is that taxpayers in South Orange do not pay any additional taxes with a PILOT than they would have paid if the development had paid normal taxes. This is unique to South Orange ( and Maplewood,) as well as any municipalities that share a school district. At first blush, when people hear that a PILOT is going to be given, and that the developer will be paying less in taxes that it would have paid with normal taxes, the natural inclination is to think that the other taxpayers have to pay more to make up the difference, and that the PILOTed development is being subsidized by them. This is not the case. Years ago, many of us on MOL had questions about PILOTs and thought that they were costing the taxpayers money. As a result of the concerns expressed on MOL, the Village had a presentation in SOPAC, where the use of a spreadsheet showed that there were no additional taxes incurred by taxpayers as a result of a PILOT. All residents who attended the presentation, as well as all who studied the spreadsheet online, which was posted by a MOLer, were convinced that there was no additional cost to the taxpayers.

This is all conditioned on the fact that a PILOT should not be awarded unless it is necessary to do so in order to get a development built, and if a PILOT is necessary, it should be for the highest amount permitted under NJ law, once again to be determined what is necessary to get the project built.

FilmCarp said:
Well, we don't pay the policeman, the contractor does.

In addition to the officer being paid by the contractor, the Police
Department also collects a fee from them, so the construction jobs work
out well financially for the town (and thereby taxpayers).

The officers are in addition to those who are on duty, so it does not "tie up" officers who would otherwise be doing their regular jobs (I've seen that complaint on MOL pop up now and then through the years).

Thank you.

mjh said:

The NYTs has an answer for you (I'm not being snarky and recognize this is not for everyone)

http://mobile.nytimes.com/2015/07/12/fashion/last-stop-on-the-l-train-detroit.html?smid=nytcore-ipad-share&smprod=nytcore-ipad&_r=2&referrer

From the article above....

"It is now well-documented that some of Brooklyn’s much-written-about creative class is being driven out of the borough by high prices...."

Yep, there goes the economic diversity.... Detroit being the new "DUMBO" makes perfect sense ...

mbaldwin said:

Juniemoon said:
I realize it's just my humble opinion, but my guess is that people moving into opulent luxury apartments at these prices are different from the couple with one baby (and another on the way) from Bay Ridge who just bought the house down the block from you.

Any facts to back up this opinion?

Nope. Just based on experience, observation and study of what high prices do to "creative communities" (note the article above) and "average families". It's an "opinion", and nothing more.