5/22/17 Caucus & 5/24/17 Council Meetings

PERTH AMBOY – An Ordinance of the City of Perth Amboy, County of Middlesex, New Jersey – Approving the PILOT Application and authorizing the Mayor pursuant to N.J.S.A., 40A:20-1ET SEQ – To execute a financial agreement by and between the City of Perth Amboy and Bridge Perth Amboy I Urban Renewal, LLC.

Leigh Anne Hindenlang and Bob Benecke (Benecke Economics) came up to answer questions from the Council.

Hindenlang gave an overview of the property from the times that Viridian Partners had it until it was taken over by Bridge. She stated, “Viridian was the original developer, then sold it to Bridge. There had to be a transfer agreement to Bridge.”

Business Administrator Adam Cruz interrupted Hindenlang to remind the Council, “The original PILOT Program submitted by Bridge Partners was reduced from 25 years to 22 years.”

Hindenlang then continued and answered a Councilman’s question in regards to Target coming into one of the Bridge Buildings and a job fair that they had. She said, “We requested that Target have a job fair in Perth Amboy to give our residents first choice of positions whether or not Target locates here or not.”

Benecke then spoke about the percentages of money that each entity will get if a PILOT Program is put in place. These percentages are the ones that Benecke revised after Resident Stanley Sierakowski gave him corrections. “26.3% for the school, 61% paid to the City and the balance of 13% to the County. 95% of the PILOT money will go to the City. $1.8 million will be your net gain in 2 years. If the building is occupied without a PILOT, your net gain will be $800,000. I suggested to the Business Administrator and the Administration that you should dedicate this money to tax relief. It will be memorialized in a resolution. As per the State, the money will be put in a trust designated where the money goes. You can state that it be put in the budget for tax relief if you so desire. The company right now has a tax appeal.”

Councilman Irizarry interrupted and ask,”Can the City afford the PILOT?”

Benecke answered, “There was $150 million investment. $2.88 value is our tax rate; $3.6 million of tax value with tenants occupied.”

Annie Hindenlang provided more information, “Viridian had the property 3 years before Bridge took over for the Vertical building. We (PARA) negotiated for 6 to 7 months for the PILOT Project terms.”

Council President Bill Petrick told Hindenlang, “Viridian said they didn’t want a PILOT.”

Hindenlang answered back, “Viridian had a huge escrow and got that back, plus they made a huge profit on top of that. They (Viridian) made an application to the Administration first. We went to the Tax Assessor first to see if a PILOT was acceptable.”

Councilman Fernando Gonzalez brought up the issue which involved the tax rate dealing with the School System.

Resolution R-207 – Certifying to the Middlesex County Board of Taxation a Local Tax Levy in the amount of $25,853,697 for the 2017-2018 Perth Amboy School Budget.

CFO Jill Goldy came up to respond, “It’s 4 Cents on the tax rate which is $95 per year to a home owner whose home value is $239,000.”

Gonzalez responded back, “That’s why I voted against the budget. I predicted this tax increase.”

Business Administrator Cruz responded, “We can’t predict what the school board or county tax increase will be.”

Gonzalez stated, “We work for the Citizens – not the City! I pay $14,000 in taxes. I can afford it because my son moved in with me. We have to work hard to make sure our citizens do not continue getting tax increases.”

Cruz finished his argument stating, “We have power only on balancing our Municipal Budget.”

Mayor Diaz came up later in the meeting to make a case for the Bridge PILOT. Before doing so, she wanted to let the Council and Residents know that the State Attorney acknowledged the Police Department for their great work with the community. She continued, “A lot of work went into this PILOT (Bridge). I was skeptical at first of the PILOT Program, but they help put people to work. The Point Pleasant Mayor said they were looking at PILOTs to help with their shorelines. I said we are using them to bring in industries. Gerdau Ameristeel will be asking for a PILOT. Bridge had buildings that were just shells. Viridian could not finish their project. It was understood that whoever Viridian sold to was going to ask for a PILOT. I believe Target wants to come, but right now, there’s no C/O. You (the Council) want to attract long term tenants. You want to protect the workers when it comes to decent wages and to have a bargaining unit. Other Mayors use PILOTs to move their projects. PILOTs will jump-start our economy. People can shop and dine here. Our residents that work there can put the money back into our community. This money can build a firehouse in that section of town. It can put in money for tax relief, too. Using bonds come with a cost. There are a lot of if’s. Look at all the information given to you (the Council) and the hard work by PARA and other agencies. We need more of an economic engine than just PILOTs for housing.”

At the 5/24/17 Council Meeting, the Council still had concerns about the Bridge PILOT, especially the amount of time it would be in effect.

Councilman Joel Pabon said, “22 years is very long and they have too many whereas in the contract. I’m all for the PILOT, and we’re probably going to need more.”

Business Administrator Cruz answered Pabon’s concerns. “First I want to thank the Council for placing this Ordinance on the Agenda. We have brought in 3 levels of expertise (to explain this particular PILOT). We reduced the terms from the initial amount of 30 to 22 years. This is what other Municipalities have. We have a 50 year PILOT Program going on right now.”

Council President Bill Petrick had some thoughts on this, “I don’t think we need to give a PILOT for an out of town large corporation. We always had a large workforce (in the City for years). The roads, railroad and river is why all large corporations wanted to be here.”

Cruz responded, “All of these large corporations also left pollutants.”

Petrick continued, “Bridge already had a clean site when they bought it from Viridian. The building we are talking about already has a tenant coming here.”

Councilman Jelmin Caba spoke up, “Just like Adam (B.A. Cruz) said, we have a lot of blighted areas that may continue (to exist) without PILOTs. I agree with Councilman Pabon about the years. Maybe we can revisit this in 10 years.”

Irizarry spoke next, “I understand the rationality for 22 years and maybe Mr. Benecke can explain why it’s for that amount of time.”

Pabon responded, “Companies come here and offer very little jobs to our residents. I understand what Benecke said, but still 22 years is too long.”

Councilman Fernando Gonzalez agreed stating, “I believe 22 under any conditions is not proper. Viridian said they will never need a PILOT. I think that a 22 year commitment is too long. We should encourage this company. I don’t want to tie the hands of a new Council.”

Pabon questioned, “We know that others will be asking for PILOTS. Will they be getting the same amount of years?”

When it came for the vote, Irizarry and Caba voted “Yes” to the ordinance and Gonzalez, Pabon and Petrick voted “No.” Ordinance did not pass.

During the last Public Portion, Resident Stanley Sierakwoski had a suggestion, “The real issue is the divergence of the money distributed. The Board of Education and library percentages will shrink. Let the County get a smaller percentage or even 0%. I’m in favor of PILOTs, if you don’t steal from the schools and library. Just do the PILOT for 12 to 15 years instead.”

Mayor Diaz came up to speak, telling the Council how disappointed she was. “Full disclosure wasn’t given. Viridian had $12 million to $14 million in escrow and that is why they didn’t ask for a PILOT.”

She then addressed Council President Bill Petrick and said,”I know that you are against PILOTs.”

Petrick responded, “I have seen PILOTs that have failed in the past. Also the experts that have come here (in reference to the Bridge PILOT) have given us wrong numbers. Under Fehrenbach (former B.A.) and Jimenez, there were not going to be PILOTs.”

Mayor Diaz responded, “He (Fehrenbach) was talking a bout another company. Viridian was not the original company. It was Panatone. They (Bridge) are creating ratables and jobs with Union Benefits. I told the Union that the Council will support them.”

The person who has signed on to a 50 year PILOT came up to speak. He is the Owner/Manager of the building located at 315 High St. He stated, “When the rent increases, the PILOT increases. The PILOT worked against us. We pay $155,000 in taxes. If we were taxed the traditional way, we  would pay $95,000. I came here tonight to see if something can be done (with the terms of the agreement).

Councilman Fernando Gonzalez said, “It’s strange that you’re here talking about how your 50 year PILOT worked against you. The Administration is the one you’ll have to talk to.”

Council President Bill Petrick told the owner of 315 High St. That there is a big difference between your PILOT Program (and the one we’re discussing tonight).

Resident Reinaldo Aviles told the Council, “Retail is not doing well. These are different jobs than years ago which will not be a waste. It’s light industrial at the very least.”

Resident David Caba came up to speak,”Why give these billionaires PILOTs based on what they promise us? I bet that Kushner will ask for a PILOT if he builds his 600 units. These billionaires don’t think about the residents – just what the Mayor wants. You guys can compromise when it comes to PILOTs. Why doesn’t the State pay for the PILOTs instead of the Municipalities?”

Resident Mark Achamizo commended the Council for turning down the PILOT and suggested that they renegotiate every 5 years, “I like that the Mayor incorporated union benefits. We need to have our buildings more energy efficient, especially when it comes to any new buildings.

During the Council Comments, Jelmin Caba stated, “This PILOT (Bridge) is not a residential mix and it’s in the blighted area. I don’t want Bridge to be discouraged and they should come back to renegotiation. I understand that the Council President doesn’t like PILOTs, but they are needed.”

Fernando Gonzalez stated, “We have approved PILOTs in the past. Mendez Dairy had a 5 year PILOT Program. I like that the industries, businesses, residents and the City work together.”

Joel Pabon said, “I’m not against PILOTs. I’m just concerned about the length of years and I hope that Bridge comes back. I looked at neighboring cities (that have PILOTs)  and I’ve been on the phone constantly. I have to look on how this will affect 60,000 people. Maybe if Bridge comes back with a decent number, we can work with that.”

Council President Bill Petrick made it clear that he’s just against bad PILOTs that don’t benefit the City. “You have to realize that Perth Amboy is a valuable Community where you don’t have to give up our worth. I will base each PILOT on it’s own merit.”

Petrick also wished everyone a great weekend and to think about those who sacrificed while we are having a good time.