.City Council extended a tax abatement agreement that was set to the expire at year’s end for a 55-year-old high-rise building.
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The governing body at its meeting last night approved a resolution (AR-243-24) extending the tax abatement for another five years, through 2029. The measure carried unanimously, 8-0 (Councilman At-Large Jeremy Mojica was absent) with no comments or questions from representatives or the public.
Lower Main Street Associates, otherwise known as Rahway Plaza Apartments, at 1171-1181 Main St., was constructed in 1970 with the help of a 50-year tax abatement. Red Bank-based Denholtz Properties also owns a number of commercial and office properties in New Jersey, Pennsylvania, Florida and Illinois. Two years ago, that agreement was extended through 2024. Later that year, Denholtz secured $11 million in financing.
The 12-story, 288-unit high-rise “provides a substantial amount of low and moderate income housing, much of which would be lost without the continuance of the Tax Abatement Agreement,” according to the resolution.
“The Sponsor has provided an amendment to the Agreement to provide for an extension for the lesser of an additional five years or the Project remaining subject to the active deed restrictions of the New Jersey Housing and Mortgage Finance Agency,” according to the resolution. Denholtz also agreed to a recalculation of the quarterly estimated payments to “more accurately reflect total revenues for each year,” according to the resolution, which does not include details of the recalculation.
UPDATED, 11/25/24: In response to an Open Public Records Act (OPRA) request filed Nov. 13 for the proposed amendments and/or agreements, the city clerk’s office advised on Nov. 22 that the “requested document is still in a draft phase and is considered deliberative material. Accordingly, your OPRA request is denied. Once the share service agreement is finalized, you may refile your OPRA request for the finalized shared service agreement.”
The 2024 municipal budget anticipates $500,000 in PILOT revenue from Lower Main Street Associates, up from an anticipated $480,000 in 2023 after realizing $508,504 that year.
Under the original agreement from 1970, the development would pay an annual service charge not exceeding the property tax for the full year or 14.4695 percent of annual gross shelter rents ($101,854 at the time), whichever is greater, but not less than $5,079 per year.
The twin buildings sit on 7.2 acres at Main Street and East Hazelwood Avenue are assessed for $17,150,100, according to property records.
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