City Council extended a 50-year tax break another five years for a downtown high-rise with plans to possibly extend it longer in the future.

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The resolution (AR-206-22) extends the tax abatement agreement for Rahway Plaza Apartments at 1171-1181 Main St. from 2020 through 2024. The 12-story low- and moderate-income buildings are owned by Red Bank-based Denholtz Properties, which also owns commercial and office properties in New Jersey, Pennsylvania, Florida and Illinois.

Lower rents are one of the primary reasons that extending the agreement was considered, according to City Administrator Jacqueline Foushee. “This will be one of the factors evaluated before extending the contract period further,” she said via email last week. Rents are below market and the building has accepted Section 8 vouchers, ranging from about $1,000 to $1,400 in the 288-unit building.

While the original agreement was executed in November 1970, Foushee said it required that payments started while the site was being developed, which attorneys agreed was during 1969.

Originally, negotiations were to take place based on the contract ending 50 years of the execution date but were delayed due to COVID and limitations for the city to visit the development, Foushee said, explaining the reason for the 2020-2024 timeline on this extension. “Since that time, we were able to have discussions and have limited the extension to cover the past period but also allow the property owner to obtain financing permissions and approvals before the city commits to a longer agreement.”

Lower Main Street Associates, the entity listed on property records, paid almost $523,000 in lieu of taxes in 2021 and the 2022 municipal budget anticipates $520,000. That’s up from the past few years when payments ranged from $366,000 to $469,226. See more details on previous payments and the original agreement in this post from last week.

The twin buildings on 7.2 acres at Main Street and East Hazelwood Avenue are assessed for $17,150,100, according to property records. Based on a 2021 tax rate of $7.022 per $100 of assessed value, the property tax bill would be more than $1.2 million, which hypothetically would break down as follows:

• School: $565,953
• Municipal: $452,763
• County: $167,385
• Library: $12,520
• County open space: $5,660

For some perspective, here’s a look at where things stood in 1970: Average monthly rent was $140, average income was $9,400, and average home cost was $23,450. A stamp was 6 cents, gas was 36 cents a gallon, and the Dow Jones was 838. The U.S. population stood at 205 million and the last amendment to the Constitution was approved, lowering the voting age from 21 to 18.

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