Monday, January 23, 2017

UEZ Rehabs To Reap Tax Breaks

The city's entire Urban Enterprise Zone is in need of rehabilitation, the City Council agreed in approving a resolution that paves the way for five-year tax abatements for UEZ property owners.

Upon completion of improvements and approvals from tax officials, "Taxes remain the same for five years," Deputy City Administrator Carlos Sanchez explained at the Jan. 17 council meeting.

Elissa Cohen, whose family operated Suburban Jewelers in the UEZ for many years, questioned the resolution in public comment, saying an impact study should be conducted before any such action. But Sanchez said her concerns were covered in the original impact study on the tax abatement.

Sanchez said the five-year abatement itself was "not new" and had been on the books since 1978.

The process of declaring the UEZ in need of rehabilitation  goes back a way itself. From the resolution:

On August 14, 2016, City Council adopted resolution R-324-16 directing the Planning Board to conduct an investigation as to whether the Urban Enterprise Zone (UEZ) satisfies the statutory criteria of the Local Redevelopment and Housing Law in order to be determined to be an area in need of rehabilitation. On October 20, 2016, the Planning Board conducted a public hearing and concluded the UEZ as well as adjacent and contiguous areas separated by public rights-of-way do satisfy the statutory criteria. 

The UEZ formerly brought revenues into the city for improvements within the zone. Certified UEZ retailers were allowed to charge only half the sales tax, which the Urban Enterprise Zone Authority then returned to the city for approved projects in the zone, such as new trash receptacles, security cameras and street furniture. But after a study found the state was getting a return of eight cents for every dollar expended on  UEZs, Gov. Chris Christie wanted the program phased out. Fund balances were returned to UEZ municipalities and most recently, designations for five including Plainfield expired at the end of 2016.

While eliminating the 3.5 percent state sales tax benefit, Christie reduced the 7 percent sales tax to 6.85 percent.

Sanchez said a property owner in the UEZ who rehabilitates a building can apply to the tax assessor  for an abatement. He said new development can also be eligible for the 5-year abatement, with council approval. For more information, inquire at the Office of Economic Development.

The next City Council meeting is an agenda-fixing session, 7:30 p.m. Feb. 6 in City Hall Library, 515 Watchung Ave.


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