2682-22 Tax Exemption and Abatement Ordinance.pdf

1 #12938269.1 2682-22 AN ORDINANCE SUPERSEDING AND AMENDING CHAPTER 22, TAXATION, SUBSECTION 1, FIVE-YEAR TAX EXEMPTION FOR CERTAIN IMPROVEMENTS TO RESIDENTIAL AND COMMERCIAL STRUCTURES, OF THE REVISED GENERAL ORDINANCES OF THE TOWNSHIP OF WEST ORANGE BE IT ORDAINED, by the Township Council of the Township of West Orange, in the County of Essex, State of New Jersey as follows: Section 1. Chapter 22, Taxation, Subsection 1, Five-Year Tax Exemption For Certain Improvements To Residential And Commercial Structures, of the Revised General Ordinances of the Township of West Orange is hereby deleted and replaced in its entirety with the following: §22-1 FIVE-YEAR TAX EXEMPTION FOR IMPROVEMENTS TO RESIDENTIAL AND CERTAIN COMMERCIAL STRUCTURES AND PROVIDING FOR AGREEMENTS FOR PAYMENTS IN LIEU OF TAXES FOR CERTAIN COMMERCIAL AND MULTIFAMILY CONSTRUCTION §22-1.1 Policy. The Township of West Orange recognizes that there are residential and commercial areas within its boundaries that are threatened with economic decline. There are, however, various New Jersey statutes which enable municipalities to encourage property owners to improve their properties by offering them temporary relief from a portion of their real estate taxes and to offer incentives to encourage construction of certain commercial and multifamily uses through tax exemptions and payments in lieu of taxes. One such statute is N.J.S.A. 40A:21-1 et seq., the Five-Year Exemption And Abatement Law. This legislation encourages municipalities to offer certain tax incentives to property owners as a means of addressing local problems associated with areas in economic decline. The within section is adopted pursuant to the authority granted by N.J.S.A. 40A:21-1 et seq. §22-1.2 Definitions. The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise: ABATEMENT — Shall mean that portion of the assessed value of a property as it existed prior to construction, improvement or conversion of a building or structure thereon, which is exempted from taxation pursuant to this chapter. AREA IN NEED OF REHABILITATION — Shall mean all of the Township which has been determined to be an area in need of rehabilitation or redevelopment pursuant to the “Local Redevelopment and Housing Law”, P.L. 1992, c. 79 (C. 40A:12A-1 et seq.). Pursuant to Resolution

hich has been determined to be an area in need of rehabilitation or redevelopment pursuant to the “Local Redevelopment and Housing Law”, P.L. 1992, c. 79 (C. 40A:12A-1 et seq.). Pursuant to Resolution #323-21, adopted December 14, 2021, the entire Township has been designated as an area in need of rehabilitation, pursuant to N.J.S.A. 40A:12A-14.

2 #12938269.1 ASSESSOR — Shall mean the officer of the Township of West Orange charged with the duty of assessing real property for the purpose of general taxation. COMMERCIAL OR INDUSTRIAL STRUCTURE — Shall mean a structure or part thereof used for the manufacturing, processing or assembling of material or manufactured products, or for research, office, industrial, commercial, retail, recreational, hotel or motel facilities, or warehousing purposes, or for any combination thereof, which the governing body determines will tend to maintain or provide gainful employment within the Township, assist in the economic development of the Township, maintain or increase the tax base of the Township and maintain or diversify and expand commerce within the Township. COMPLETION — Shall mean substantially ready for the intended use for which a building or structure is constructed, improved or converted. CONDOMINIUM — Shall mean a property created or recorded as a condominium pursuant to the 'Condominium Act,' P.L.1969, c. 257 (C. 46:8B-1 et seq.). CONSTRUCTION — Shall mean the provision of a new dwelling, multiple dwelling or commercial or industrial structure, or the enlargement of the volume of an existing multiple dwelling or commercial or industrial structure by more than thirty (30%) percent, but shall not mean the conversion of an existing building or structure to another use. CONVERSION OR CONVERSION ALTERATION — Shall mean the alteration or renovation of a nonresidential building or structure, or hotel, motel, motor hotel or guesthouse, in such manner as to convert the building or structure from its previous use to use as a dwelling or multiple dwelling. COOPERATIVE — Shall mean a housing corporation or association, wherein the holder of a share or membership interest thereof is entitled to possess and occupy for dwelling purposes a house, apartment, or other unit of housing owned by the corporation or association, or to purchase a unit of housing owned by the corporation or association. COST — Shall mean, when used with respect to abatements for dwellings or multiple dwellings, only the cost or fair market value of direct labor and materials used in improving a multiple dwelling, or of converting another building or structure to a multiple dwelling, or of constructing a dwelling, or of converting another building or structure to a dwelling, including

oving a multiple dwelling, or of converting another building or structure to a multiple dwelling, or of constructing a dwelling, or of converting another building or structure to a dwelling, including any architectural, engineering, and contractor’s fees associated therewith, as the owner of the property shall cause to be certified to the governing body by an independent and qualified architect, following the completion of the project. DWELLING OR DWELLING UNIT — Shall mean a building or a part of a building used, to be used or held for use as a home or residence, including accessory buildings located on the same premises, together with the land upon which such building or buildings are erected and which may be necessary for the fair enjoyment thereof, but shall not mean any building or part of a building, defined as a “multiple dwelling” pursuant to the “Hotel and Multiple Dwelling Law,” P.L. 1967, c. 76 (C. 55:13A-1 et seq.). A dwelling shall include, as they are separately conveyed

3 #12938269.1 to individual owners, individual residences within a cooperative, if purchased separately by the occupants thereof, and individual residences within a horizontal property regime or a condominium, but shall not include “general common elements” or “common elements” of such horizontal property regime or condominium as defined pursuant to the “Horizontal Property Act, ” P.L.1963, c. 168 (C. 46:8A-1 et seq.), or the “Condominium Act,” P.L.1969 c. 257 (C. 46:8B-1 et seq.), or of a cooperative, if the residential units are owned separately. EXEMPTION — Shall mean that portion of the assessor’s full and true value of any improvement, conversion alteration, or construction not regarded as increasing the taxable value of a property pursuant to this chapter. HORIZONTAL PROPERTY REGIME — Shall mean a property submitted to a horizontal property regime pursuant to the “Horizontal Property Act,” P.L.1963, c. 168 (C. 46:8A-1 et seq.). IMPROVEMENT — Shall mean a modernization, rehabilitation, renovation, alteration or repair which produces a physical change in an existing building or structure that improves the safety, sanitation, decency or attractiveness of the building or structure as a place for human habitation or work, and which does not change its permitted use. In the case of a multiple dwelling, it includes only improvements which affect common areas or elements, or three or more dwelling units within the multiple dwelling. In the case of a multiple dwelling or commercial or industrial structure, it shall not include ordinary painting, repairs and replacement of maintenance items, or an enlargement of the volume of an existing structure by more than thirty (30%) percent. In no case shall it include the repair of fire or other damage to a property for which payment of a claim was received by any person from an insurance company at any time during the three (3) year period immediately preceding the filing of an application pursuant to this ordinance. MULTIPLE DWELLING — Shall mean a building or structure meeting the definition of “multiple dwelling” set forth in the “Hotel and Multiple Dwelling Law,” P.L.1967, c. 76 (C. 55: 13A-1 et seq.), and means for the purpose of rehabilitation, improvement or construction the “general common elements” and “common elements” of a condominium, a cooperative, or a horizontal property regime. §22-1.3 Tax Exemption and

e purpose of rehabilitation, improvement or construction the “general common elements” and “common elements” of a condominium, a cooperative, or a horizontal property regime. §22-1.3 Tax Exemption and Abatement Program For Improvements to Residential Properties, Conversion to Residential Uses and Improvements to Certain Commercial Properties. a. There is hereby adopted and provided in the Township of West Orange a five-year tax exemption program pursuant to N.J.S.A. 40A:21-1, et seq., as amended. This program shall apply to all dwellings in the Township and provide for the exemption from real property taxation of the aggregate first twenty-five thousand ($25,000.00) dollars in Assessor’s full and true value of improvements for each dwelling unit primarily and directly affected by an improvement in any dwelling as defined in this chapter more than twenty (20) years old, as not increasing the value of such property for a period of five (5) years, notwithstanding that value of the dwelling to which such improvements are made is increased thereby. Provided, however, that during the exemption period, the assessment on said dwelling shall not be less than the assessment thereon existing

4 #12938269.1 immediately prior to such improvements, unless an abatement is granted pursuant to subsection b. of this section or there is damage to a dwelling through action of the elements sufficient to warrant a reduction. b. Properties for which an exemption for improvements to dwellings is granted pursuant to Section “a” above shall also receive an abatement of seven thousand five hundred dollars ($7,500) of the assessed value of property receiving the exemption as it existed immediately prior to the improvement for a period of five (5) years. c. The program shall also include exemptions for a portion of the assessed valuation of construction of new dwellings or of conversions of other buildings and structures, including underutilized public buildings to dwelling use, or both. In determining the value of real property covered by such an exemption, the Township shall regard thirty (30%) percent of the Assessor's full and true value of the dwelling constructed, or conversion alterations made, as not increasing the value of the property for five (5) years, notwithstanding that the value of the property upon which the construction or conversion occurs is increased thereby. d. This program shall also include an exemption for improvements to commercial or industrial structures, which shall be requested on an individual basis for review, evaluation and approval or disapproval by the governing body. In the case of approved exemptions for improvements to commercial or industrial structures, the Assessor shall regard the full and true value of the improvements as not increasing the value of the property for a period of five (5) years, notwithstanding that the value of the property to which the improvements are made is increased thereby. However, during this exemption period the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements unless there is damage to the structure through action of the elements sufficient to warrant an exemption. e. The program shall also provide for an exemption for improvements to multiple dwellings, or of conversions of other buildings and structures, including underutilized public buildings, to multiple dwelling use, or both, which shall be requested on an individual basis for review, evaluation and approval or disapproval by the governing body. In the case of approved

d public buildings, to multiple dwelling use, or both, which shall be requested on an individual basis for review, evaluation and approval or disapproval by the governing body. In the case of approved exemptions, in determining the value of real property the Township shall regard up to the Assessor’s full and true value of the improvements or conversion alterations as not increasing the value of the property for a period of five (5) years, notwithstanding that the value of the property to which the improvements or conversion alterations are made is increased thereby. During the exemption period, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements or conversion alterations, unless there is damage to the multiple dwelling through action of the elements sufficient to warrant a reduction. §22-1.4. Application Procedure.

5 #12938269.1 Applicants for tax exemptions for improvements to commercial or industrial structures or to multiple dwellings, or conversion of other buildings to multiple dwelling use, shall provide the municipal governing body with a completed application setting forth the following: a. A general description of the project for which exemption is sought; b. A legal description of all real estate necessary for the project; c. Plans, drawings and other documents as may be required by the governing body to demonstrate the structure and design of the project; d. A statement of the reasons for seeking tax exemption on the project, and a description of the benefits to be realized by the applicant if a tax exemption is granted; e. Estimates of the cost of completing such project, which shall include, at a minimum, all items required to accompany an application for a construction permit under the Uniform Construction Code, pursuant to Paragraph 4 of N.J.A.C. 5:23-2; f. A statement showing (1) the real property taxes currently being assessed at the project site; (2) estimated tax payments that would be made annually by the applicant on the project during the period of the exemption, and (3) estimated tax payments that would be made by the applicant on the project during the first full year following the termination of the tax exemption; g. A description of any lease agreements between the applicant and proposed users of the project, and a history and description of the users’ businesses; and h. Such other pertinent information as the governing body may require, or as may be required by the assessor. i. Such exemptions shall be reviewed, evaluated and approved on an individual basis by the governing body. §22-1.5. Applications for Tax Exemption and Abatement for New Construction of Commercial and Multifamily Uses. There is hereby adopted a tax exemption and abatement program pursuant to N.J.S.A. 40A:21-1, et seq., as amended, for construction of commercial or industrial structures and/or multiple dwellings. Such exemptions and abatements shall only be granted after the filing of an application containing all of the information below and the approval of such application by the governing body. All applications pursuant to this subsection 1.5 shall be subject to an agreement to be approved and executed by the governing body. All tax agreements shall be applied for

tion by the governing body. All applications pursuant to this subsection 1.5 shall be subject to an agreement to be approved and executed by the governing body. All tax agreements shall be applied for and granted on an individual or project basis, after review, evaluation and approval of each application by the governing body.