Maplewood TC Releases Financial Analysis of Proposed PO PILOT
Mar 30, 2015 at 9:44am Edited
Let's have a whole bunch of new threads about the post office in more detail.
How many posts will it take before someone accuses the township of "shady" dealing when they did the analysis?
mjh said:
Let's have a whole bunch of new threads about the post office in more detail.
Since this is a different topic than, say, the petition, I thought it should have its own thread.
cmaynard said:
mjh said:
Let's have a whole bunch of new threads about the post office in more detail.
Since this is a different topic than, say, the petition, I thought it should have its own thread.
How about two?
http://forum.maplewoodonline.com/discussion/115402/township-releases-post-office-pilot-details
Mar 30, 2015 at 11:09am Edited
will combine the threads - next two posts are the entire other thread up to now.
Sorry I can't get the tables to copy in properly.
As far as PILOTS go, this isn't the worst one I've seen, It's only 5 years, land taxes are paid fully from year one, and it only gives a 100% abatement on improvement taxes in years 1 and 2. After that, improvement taxes are phesed in at 20% per year, reaching 100% in year 7.
I don't like PILOTS all that much either, but perhaps this will allay the concerns of some that no tax analysis has been disclosed. Whether this particular analysis is worth all that much is another question.
have at it.....
____________________________________________________
Information from the Maplewood Township Committee on the Maplewood Post Office
On April 7, 2015 at 7:30pm, the Maplewood Township Committee will hold a public hearing and consider on final passage, Ordinance 2778-15, Authorizing the Execution Of A Tax Agreement With Maplewood Redevelopers, LLC And Granting a Tax Exemption: 5 Year Tax Abatement Pursuit To State Statute. This is for the post office site on Maplewood Avenue.
The Township of Maplewood is the current property owner and now there are no property taxes collected from the site.
Below is a ten year tax payment analysis comparing the current value of the land and building at the post office site with the proposed new development receiving a five-year tax abatement (PILOT).
From 2016 through 2025, the total estimated tax payments on the existing land and building are $678,730. The total estimated tax payments on the proposed new development are $1,009,582, which is an increase of $330,852. After 2025, the proposed new development will generate over $85,000 more in taxes per year than the taxes for the existing land and building.
The current land value for the post office site is $696,800 and the value of the building (improvement) is $978,500. The 2014 Maplewood tax rate (municipal, library, open space, school and county portions) is $3.524 per $100 of value. The 2015 tax rate has not yet been determined.
The comparisons start with the 2016 tax year. The estimated tax rate for 2016 is $3.70 per $100 of value, which is five percent more than the 2014 tax rate.
The estimated value of the building (improvement) with the proposed new development is estimated by the Tax Assessor to be $2,887,700. During the five-year PILOT period (2017-2021), land taxes are paid in full and the taxes on the improvement are phased in by 20 percent each year after the first year.
As far as PILOTS go, this isn't the worst one I've seen, It's only 5 years, land taxes are paid fully from year one, and it only gives a 100% abatement on improvement taxes in years 1 and 2. After that, improvement taxes are phesed in at 20% per year, reaching 100% in year 7.
I don't like PILOTS all that much either, but perhaps this will allay the concerns of some that no tax analysis has been disclosed. Whether this particular analysis is worth all that much is another question.
have at it.....
____________________________________________________
Information from the Maplewood Township Committee on the Maplewood Post Office
On April 7, 2015 at 7:30pm, the Maplewood Township Committee will hold a public hearing and consider on final passage, Ordinance 2778-15, Authorizing the Execution Of A Tax Agreement With Maplewood Redevelopers, LLC And Granting a Tax Exemption: 5 Year Tax Abatement Pursuit To State Statute. This is for the post office site on Maplewood Avenue.
The Township of Maplewood is the current property owner and now there are no property taxes collected from the site.
Below is a ten year tax payment analysis comparing the current value of the land and building at the post office site with the proposed new development receiving a five-year tax abatement (PILOT).
From 2016 through 2025, the total estimated tax payments on the existing land and building are $678,730. The total estimated tax payments on the proposed new development are $1,009,582, which is an increase of $330,852. After 2025, the proposed new development will generate over $85,000 more in taxes per year than the taxes for the existing land and building.
The current land value for the post office site is $696,800 and the value of the building (improvement) is $978,500. The 2014 Maplewood tax rate (municipal, library, open space, school and county portions) is $3.524 per $100 of value. The 2015 tax rate has not yet been determined.
The comparisons start with the 2016 tax year. The estimated tax rate for 2016 is $3.70 per $100 of value, which is five percent more than the 2014 tax rate.
The estimated value of the building (improvement) with the proposed new development is estimated by the Tax Assessor to be $2,887,700. During the five-year PILOT period (2017-2021), land taxes are paid in full and the taxes on the improvement are phased in by 20 percent each year after the first year.
Mar 30, 2015 at 11:12am Edited
joan Crystal: Just saw the e-mail. Not sure what it proves.
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ice: I guess one of the main points is that the township would be better off by $330k over ten years with the proposed development as compared to the "existing land and building tax payments".
But since absolutely nobody is proposing keeping the existing land and building as it is, I'd be inclined to agree that the analysis doesn't say or prove all that much.
Too bad this important meeting is on the same night as the important meeting when the public will get a chance to meet the new school superintendant.
___________
yahooyahoo: So why are we selling the building for far less than the stated value in the email? Yes, I know there can be a difference between the appraised value and value on the tax rolls. However, the TC is using an out-of-date appraisal value.
___________
tjohn: There is one value that counts - the amount a buyer is willing to pay. Book value is irrelevant.
However, I would like to think that the T.C. could get a reasonable idea of the fair market value from a commercial real estate person.
__________
yahooyahoo: Also, unless the PILOT agreement doesn't allow it, what would stop the developer from appealing the property valuation for tax purposes?
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tjohn: I thought that commercial properties were taxed different based on revenues and not valuation. I seem to remember merchants making comments to that effect during the tax revaluation kerfluffle way back when.
_________
ice: I guess one of the main points is that the township would be better off by $330k over ten years with the proposed development as compared to the "existing land and building tax payments".
But since absolutely nobody is proposing keeping the existing land and building as it is, I'd be inclined to agree that the analysis doesn't say or prove all that much.
Too bad this important meeting is on the same night as the important meeting when the public will get a chance to meet the new school superintendant.
___________
yahooyahoo: So why are we selling the building for far less than the stated value in the email? Yes, I know there can be a difference between the appraised value and value on the tax rolls. However, the TC is using an out-of-date appraisal value.
___________
tjohn: There is one value that counts - the amount a buyer is willing to pay. Book value is irrelevant.
However, I would like to think that the T.C. could get a reasonable idea of the fair market value from a commercial real estate person.
__________
yahooyahoo: Also, unless the PILOT agreement doesn't allow it, what would stop the developer from appealing the property valuation for tax purposes?
__________
tjohn: I thought that commercial properties were taxed different based on revenues and not valuation. I seem to remember merchants making comments to that effect during the tax revaluation kerfluffle way back when.
I think it's clear the TC is on the defensive. I don't recall them ever releasing financial data similar to this.
yahooyahoo said:
I think it's clear the TC is on the defensive. I don't recall them ever releasing financial data similar to this.
You mean for a sale of Township property in connection with the development of a new building in Maplewood Village?
You are correct, I can't recall a time that happened before. That being said, I don't know if that proves anything at all - and it probably doesn't.
Financial data for any large capital project, real estate transaction, or proposed development.
nohero said:
yahooyahoo said:
I think it's clear the TC is on the defensive. I don't recall them ever releasing financial data similar to this.
You mean for a sale of Township property in connection with the development of a new building in Maplewood Village?
You are correct, I can't recall a time that happened before. That being said, I don't know if that proves anything at all - and it probably doesn't.
--------------------------------
yahooyahoo said:
Financial data for any large capital project, real estate transaction, or proposed development.
both of you are probably correct.
yahooyahoo said:
Financial data for any large capital project, real estate transaction, or proposed development.
You left out the part about the Township selling the land, which is part of the analysis.
Also, I haven't researched past transactions, but if you have examples I'm happy to be informed about same.
Do I have this straight? First people on MOL are complaining that the TC hasn't realeased a financial analysis of the tax implications of the PILOT, and then when they do they get accused of being on the defensive?
Mar 30, 2015 at 11:34am Edited
If defending oneself against a lot of off-base conjecture and outright misinformation by publishing some facts is being "defensive", then yes perhaps they are being defensive.
yahooyahoo said:
I think it's clear the TC is on the defensive. I don't recall them ever releasing financial data similar to this.
How much prison time you think would be sufficient?
At least they are finally actually guilty of something. I don't personally find offering a "defense" against a fairly steady stream of baseless accusations to be a serious offense, but to each their own.
mjh said:
yahooyahoo said:
I think it's clear the TC is on the defensive. I don't recall them ever releasing financial data similar to this.
How much prison time you think would be sufficient?
At least they are finally actually guilty of something. I don't personally find offering a "defense" against a fairly steady stream of baseless accusations to be a serious offense, but to each their own.
well, whatever the case, it's a good thing that they have supplied us with. Thanks to them.
MadHatterer said:
If Pilots are so great how come Grasmere did not use them?
Who says they are great?
With rents what they are in or area, developers don't need incentive to make a ***** load of money,
Not sure why people think otherwise
It's great that they released some info, and it is about time, but the info is not complete or substantial. First of all they are comparing a developer building with a PILOT to an empty building that is owned by the town and doesn't pay any taxes at all - basing those figures on the current assessment. that is a strange comparison.
And that document states that the difference is $85,000 a year AFTER 2025,..but if one does the math the difference is really $33,000 per year average over the next ten years. If you divide that by the approx 9000 households in Maplewood that is less than $4.00 per household per year impact on our taxes.
and btw the $85,000 after 2025 renders just $9 per year per household. I'd give the town $9 a year not to build that massive block.
If the building were to be sold as existing, it would be used and not vacant, and that use would be taxed on the basis of the type of use (commercial formula). So the tax would not be as represented in that document, likely much higher than theoretical tax for a dormant building.
If the building were to be retained by the town and leased long term (not like the Woodland just for events, but like it was to the USPS) then the market lease rate would prevail (the USPS had a very discounted rate). The income to the town would be considerable, a minimum of about $380,000 per year (based on minimum of $24 per SF per year, could be higher), so over ten years that is a minimum of $3,800,000 revenue to the town. And the taxpayers' investment in the property would remain as well and accrue in value (currently assessed at $1,800,000). That's a win-win.
So why are we giving away this property for less than $600,000?
And that document states that the difference is $85,000 a year AFTER 2025,..but if one does the math the difference is really $33,000 per year average over the next ten years. If you divide that by the approx 9000 households in Maplewood that is less than $4.00 per household per year impact on our taxes.
and btw the $85,000 after 2025 renders just $9 per year per household. I'd give the town $9 a year not to build that massive block.
If the building were to be sold as existing, it would be used and not vacant, and that use would be taxed on the basis of the type of use (commercial formula). So the tax would not be as represented in that document, likely much higher than theoretical tax for a dormant building.
If the building were to be retained by the town and leased long term (not like the Woodland just for events, but like it was to the USPS) then the market lease rate would prevail (the USPS had a very discounted rate). The income to the town would be considerable, a minimum of about $380,000 per year (based on minimum of $24 per SF per year, could be higher), so over ten years that is a minimum of $3,800,000 revenue to the town. And the taxpayers' investment in the property would remain as well and accrue in value (currently assessed at $1,800,000). That's a win-win.
So why are we giving away this property for less than $600,000?
While I don't wish to disect your position, I would like to point out that by your own math, the wn-win solution you propose would equate to an approximate average value per house per year of $40.
Yawn.
Yawn.
Yes it is about $42.00...the point being that doing nothing but leasing the building gets more income than demolition and constructing this massive building does.
So why do it? it's just ridiculous on so many levels - financially, sustainability, disruption of the town, parking loss, mass, scale, and more
You are also forgetting that we as also taxpayers maintain the investment in the property, which will accrue - still a win-win.
In the current plan by the TC, there is no investment at all....lose-lose
So why do it? it's just ridiculous on so many levels - financially, sustainability, disruption of the town, parking loss, mass, scale, and more
You are also forgetting that we as also taxpayers maintain the investment in the property, which will accrue - still a win-win.
In the current plan by the TC, there is no investment at all....lose-lose
I have not researched nor refuted your financial assumptions.
I'm simply pointing out that:
33,085/9000 = 4 +/- (the position you do not support)
380,000/9000 = 40 +/- (the position you do support)
I'm not going to be swayed by $36/ year impact per household.
I'm simply pointing out that:
33,085/9000 = 4 +/- (the position you do not support)
380,000/9000 = 40 +/- (the position you do support)
I'm not going to be swayed by $36/ year impact per household.
Rental income is far less secure than tax income.
Does the Township really want to be in the landlord business?
Does the Township really want to be in the landlord business?
Weren't we already in the landlord biz with the PO? There was a middle man I believe.LOST said:
Rental income is far less secure than tax income.
Does the Township really want to be in the landlord business?
I think with the "middle man" the Township had no management responsibility.
I don't see a deduction for a management company fee or a Lease Hold Improvement allocation in the math presented for the position of retaining Municipal ownership of the property.
IndaSechzer said:
Yes it is about $42.00...the point being that doing nothing but leasing the building gets more income than demolition and constructing this massive building does.
So why do it? it's just ridiculous on so many levels - financially, sustainability, disruption of the town, parking loss, mass, scale, and more
You are also forgetting that we as also taxpayers maintain the investment in the property, which will accrue - still a win-win.
In the current plan by the TC, there is no investment at all....lose-lose
I not a fan of retaining the existing building nor am a strong supporter of building a new structure on that site.
I support a broader Urban Planning approach that looks at all of the municipal property west of the tracks and proposes new development that will maintain the building facade continuity, vehicular circulation and perhaps revamp the underutilized Ricaltons Square. I have detailed this previously in the other thread to which you were an active contributor.
Regarding municipal ownership and assest appreciation, how would this benefit the town, unless the town later sells to property for a substantial profit over today's value. I believe the town currentlynhas sufficient ability to levy a bond if needed. I don't understand how increasing the balance sheet will benefit the town.
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The Maplewood Township Committee released a 10-year financial analysis Monday on the PILOT (payment in lieu of taxes) financial abatement it is considering granting JMF Properties, the developer of the Maplewood Post Office.
The analysis can be found on the Township website: http://www.twp.maplewood.nj.us/CivicAlerts.aspx?AID=579
The TC will hold a public hearing and vote on Tuesday, April 7 on the PILOT ordinance. Committee members voted 4-1 at its last meeting to introduce the ordinance; India Larrier voted against, saying she was “not convinced the PILOT is appropriate for this site” and that it was “prime property.”
Several residents spoke against the tax abatement, arguing that it was unnecessary and doesn’t make financial sense for the township.