A plan to permit developer Frank Cretella to pay a fixed amount in lieu of taxes on a proposed 148-unit new residential project was tabled Monday, according to the City Clerk's office.
A "global" agreement involving Union County, the Union County Improvement Authority and Landmark Developers would authorize a payment in lieu of taxes, or PILOT, with the city receiving $44,977.99 annually until there was "substantial completion" of the West Second Street project, then $170,000 annually plus a 2 percent administrative fee over the 30-year term of the agreement. No affordable housing would be included.
Although the project was first described as 100 rentals and later as 148 market rentals, the new agreement spells out a first phase in which 100 rental units would be constructed, then 48 units will be built for sale.
The Appliance Arama showroom, now on the PNC Bank block known as the North Avenue Extension, would be relocated to the former Romond's Jeep building on East Second Street, one of several properties acquired by Cretella at an overall cost of $4.3 million, according to the agreement.
Landmark would receive conditional designation as the developer of the North Avenue Extension, having previously been named developer for the North Avenue Commercial Historic District.
PILOTS and tax abatements have been used to spur development. The 75-unit Horizons at Plainfield building, formerly the Tepper's department store, received a 30-year tax abatement.
Click here to read a past post on PILOTs with a link to a League of Municipalities overview of such plans.
The Park-Madison office building developed by the UCIA also has a pilot. Here is an excerpt from an October 2006 Plaintalker post:
The Park-Madison building was the first new downtown development in several decades. It houses numerous state and county offices that had been scattered around the city and the county. On its web site, AST describes it as a $28 million project. The governmental office portion is tax-exempt. Under a “payment in lieu of taxes” deal with the city, the city will receive $100,000 in taxes on the commercial portion for the 2007 fiscal year.
Among issues still to be worked out:
-Repair of cracks in the stamped brick streetscape.
-An agreement between the city and the county for public use of the parking deck on weekends.
-Public use of the plaza in front of the building and maintenance provisions.
-Reconstruction of Park Avenue between Front and Second streets.
-Repair of the old Park Jewelers street clock and installation in the plaza.
The letter also details the need for screening waste receptacles and notes various discrepancies in window and door details from what the original plans showed.
Until all the conditions are met, the project will not get a final certificate of occupancy.
As Plaintalker previously mentioned, the PILOT for Cretella's project only came up last week and as reported by Mark Spivey, the developer considers it essential to going forward with the project.
--Bernice Paglia
I just hope the development on W. 2nd St., isn't as ugly as the Park-Madison buildings. That project is so out of place in an old city like Plainfield and is not really something I'm proud of as a long time Plainfield resident.
ReplyDeleteBernice -- There is a PILOT agreement for the Union County Office building at Park Madison. This was negotiated with UCIA during my tenure. The total for both the offices, parking deck and commercial strip was to start at about $300,000 annually with incremental increases over the 30 year period. I can't remember the split between the two (I think it was roughly a $200,000/$100,000 split -- office/deck to commercial) but they were computed using different formulas. The office building/parking deck fees were to be based upon a percentage of the project construction costs while the commercial strip on a percentage of the rents. The Tepper's/Horizon project's PILOT was about $80-90,000 -- which they are paying and have been from the beginning.
ReplyDeleteThe last I heard was the UCIA did not want their PILOT payment to be based upon the final project cost but on the preliminary cost estimate in place at the time the agreement was negotiated. I have heard that they have never started to pay their annual PILOT at all which may lead people to believe that the requirement doesn't exist because they are a public entity. Yes Virginia the UCIA PILOT does exist and should have been triggered in about 2006. PILOTS normally kick in when final certificate of occupancy & completion is achieved. The CO would be issued by the city when all of the project requirements set by the agreement and Board approval has been met. They haven't been -- off-hour parking deck access hasn't been negotiated, the historic Park Jewelers clock wasn't relocated to the plaza, Park Ave between Front & Second hasn't been rebuilt (which the city put in over $150,000 in the agreement to underwrite)etc....It could be that they are still operating on a temporary CO and the city is letting them get away with that.
Pat Fox
Bernice, who was on the Council when they awarded the Union County building a PILOT?
ReplyDeleteThe Park Jewelers Street Clock needs to be fixed. Its a shame to loose it forever asit is 106 years old. What is the matter with the people who run this city and the projects!!!!
ReplyDelete