SOUTH AMBOY – Councilmen Brian McLaughlin (L) and Thomas Reilly (R) at the 10/6/21 Business Meeting
*Photos by Katherine Massopust

10/6/21 Business Meeting

By: Katherine Massopust

SOUTH AMBOY – The meeting began at 6 p.m. Council President Mickey Gross was not present at the meeting because he had surgery, so Vice President Christine Noble conducted the meeting. The consent agenda was passed unanimously by the council (No. 21-200 thru 21-206). No. 21-207 was pulled. Ordinance No. 2021-16 (Second Reading/Adoption) was passed.

First Reading/Introduction

Ordinance No. 2021-19 – Ordinance of the city of South Amboy, county of Middlesex, New Jersey approving application for a long-term tax exemption and authorizing the execution of a financial agreement with Manhattan Beach Phase1 Urban Renewal LLC.

Ordinance No. 2021-20 – Ordinance of the City of South Amboy, County of Middlesex, New Jersey approving application for a long-term tax exemption and authorizing the execution of a financial agreement with SA 101 Main Street Urban Renewal LLC.

Business Administrator Glenn Skarzynski made it clear that the Ordinance No. 19 was referring the residential portion of the project and Ordinance No. 20 referred to the warehouse portion. The plans for the redevelopment area are on South Amboy’s website at: https://www.southamboynj.gov/_Content/pdf/Proposed-Beach-Club-District-Redevelopment-Plan.pdf 

Councilman Tom Reilly had a long list of issues with the proposed tax abatement. The following is the long discussion between Councilman Tom Reilly and Attorney Kevin P. McManimon from MS&B – McManimon, Scotland, and Baumann who was representing Manhattan Beach developers:

Tom Reilly: Why did we do a cost analysis?

Kevin McManimon: This is not townhouses. The city reviewed the long-term tax exemption.

TR: What about the cost benefit analysis – the community impact?

KM: There was a consultant. I know it was consistent. He concluded that the PILOT asked for by the developer was reasonable.

SOUTH AMBOY – SARA Commissioner David Kales speaks at the 10/6/21 Business Meeting

TR: I would like to see that report of the cost of cleanup.

B.A. Glenn Skarzynski answered: Between $8-$11 million. There will be 8 buildings. There will be one cleanup for the entire property. We can provide you with this.

TR: Can we put out there what the abatements will be? Let residents see what is being put out there. After we grant the abatement, what will it show?

KM: Once the project is done, the redevelopers are subject to the agreement. PILOTS are subject to audits.

TR: Do you want to know why I’m against this PILOT? Woodmont. They spent $24 million and sold it for $46 million. In my opinion, they took advantage of this town. Do you think they would have gotten a profit like that without a tax abatement? Who is the auditor (for this project)?

KM: The developer submits an auditor. 

TR: Woodmont was supposed to bring an influx of people shopping on Broadway. It had no impact.

Mayor Fred Henry then said: The property has been there and no one who has seen it wants anything to do with it. Once they see the area, they see the cleanup needed and walk away. The developer we have right now has the means to do it. That is why the state has provisions and programs for PILOTS.

TR: What is the impact on the schools, Fire Department and First Aid?

KM: The developer will have to answer that.

TR: The PILOT is 30 years. 

KM: That is what the market goes for.

TR: It takes 30 years to make up the cost? We’ve improved roads, got a ferry.

KM: Many costs of the developer has to pay out of his own pocket.

TR: We are taxing the land. The property is now going to be reduced in tax. Every time I do something to my house, my taxes go up. They are not bound to this property. They can sell it?

KM: Yes.

B.A. Glenn Skarzynski then stated: The superintendent of schools was notified of the project and was ok with the potential number of schoolchildren.

TR: What do you think the taxes would be without the PILOT? Can you give me that number?

KM: They wouldn’t be able to build the property at all.

TR: For every PILOT executed, the county gets less revenue. We are giving tax abatements all over. We need a grocery store. We start increasing the population of our town and there is more strain on our services. I think we are going down the wrong road. I spoke to Jersey City. They have $2 billion in property value and $120 million reflecting (tax loss). Do you think developers feel they are entitled to PILOTS?

KM: Redevelopers are atypically challenged, especially in New Jersey where most land available for redevelopment is environmentally contaminated and/or have unique space. When you consider it, it’s more challenging.

TR: We did millions in infrastructure improvements. There are 1850 units. Now we are adding 600 more units.

KM: The land accounted for was underwater – not uncommon for the purpose of calculating density. It was not part of the initial project.

TR: PILOTS dictate what the developer pays the city.

KM: Developers ask for something that they collectively feel was more reasonable. It is driven by what revenue is taken in.

TR: If there is a vacancy, then there is no revenue (in that unit). The developer charges what they rent they want.

KM: Yes, if you own property, the revenue generally is that you take in as much as you can.

TR: I am voting “No” for the PILOT. This town is sinking with all the PILOTS.

Councilman Brian McLaughlin had a few questions of his own to Attorney Kevin McManimon.

BM: What towns have you had developments in? Did they all give PILOTS?

KM: Rutherford, Bergan County, Carteret, West Windsor, East Windsor, Piscataway… Most towns gave a PILOT. Not everyone, but most did.

When it came time to vote on 2021-19 and 2021-20 Tom Reilly was the only “No” vote.

Council Comments:

Councilman Tom Reilly thanked the food pantry and first responders. “I want to congratulate the fire department for Wildwood (winning trophies at the NJ State Fireman’s Convention). There is a group of individuals I want to recognize at the October 20th council meeting. I want to congratulate people who gave a lot of time to the town. This was put off due to the pandemic.”

Councilman Brian McLaughlin stated, “This was supposed to be in March 2020. There are a bunch of volunteers to be recognized. Congratulations to the fire department.”

Councilwoman Zusette Dato said, “We recently had a beach cleanup. It was well attended. We picked up litter – plastic. We had to fight off infestations of those lanternflies. Well done. The library is celebrating Hispanic Heritage Month. The roses in the center of the divider on Bordentown Avenue are beautiful. They have taken off brilliantly. I would like to fill the dividers on Main Street. It will beautify our city further.”

Law Director Francis Womack said, “Delivery of our new fire trucks is imminent. The library is having a Business Fair.

Vice President Christine Noble stated, “Mickey (Gross) had surgery and is recovering.

Mayor Fred Henry said, “I thank Kevin McManimon for being here tonight and anyone who helped with the Irish Festival. It was well put together. I signed the Waterfront Permit for the Army Corps. There are RFP’s for construction of the pier. Congratulations to the Fire Department. Wishing Mickey Gross a speedy recovery.

Councilman Tom Reilly added, “The Friends of South Amboy will be having 4 basketball games on December 18th.  They are selling tickets. Last year we (the city) missed it (due to Covid). It benefits families in need.”

Public Portion:

Mary Szaro spoke. “On behalf of the Planning Board/Historic Preservation Commission, our first designation in town – the Independence Firehouse – the language is already part of the resolution. There is an update on the Demolition Ordinance. We feel we can move forward on the ordinance. It does not need to be updated in the Master Plan or the element. It will include an appendix.” 

Law Director Francis Womack stated, “Mrs. Szaro will indicate the process at our next meeting. When it comes back, it will be on the agenda to designate the Independence Firehouse.” He then added, “There will be a Cemetery Tour on October 23rd.”

Resident Greg Babolack spoke next. “Mickey (Gross) is doing well. Are the two PILOTS for the same company – Manhattan Beach? Are they tied together? One is residential – one is a warehouse.”

Attorney Kevin McManimon answered, “It is a joint venture working together.”

Babolack asked, ‘Who looks for potential developers to come into our town? Does anyone do this for us?

Resident and SARA (South Amboy Redevelopment Agency) Commissioner David Kales then came up to speak. “I was asked to present to why I voted “Yes” for the PILOT. I spent 20 hours on this presentation. Councilman Reilly, I commend you for your due diligence. For townhouses, we as a city get $1.6 million in money. 43.9% is all we are expecting in tax revenue. 51.9% goes to schools; 43.2% goes to the city; 5% goes to the county. We would need $4.3 million to generate some of the money. The city will receive for it. The revenue of the PILOT – it was in their acceptance. I am a retired police officer in South Amboy. I was also a developer. In the industry, there are only 15 developers (in New Jersey) who can build this. Todays, the property we are talking about, there is not that. For the project, we have a contaminated property. The person is going to risk their life on the property. There is a lot of money. No one is complaining about the warehouse. The question is with the rentals. We are predicting $2 per square foot. That is $616,000/year. Yes, a tax credit. This PILOT – in 10 years that PILOT goes up 1%. That’s $7.5 million in gross revenue. Put your personal and professional self aside. We educated ourselves on another PILOT. What is the best for me and everyone else here? We have $10.5 million liability. Environmental law states we find out who contaminated the property. This is not petroleum hydrocarbon. The liability is much worse than this. The city of South Amboy has liability here. This developer has indemnified the city of South Amboy. That takes the liability off of us. Ferry Road will be open to the public. This is why the state made a PILOT. It is for properties like this. Right now, we have property we can’t use. The only thing the city of South Amboy is responsible for is police, fire, and first aid (departments) – if you manage our money correctly, which you are elected to do. For every one-thousand people you get, we need one police officer – three shifts – so three police officers. We are going to increase our police department (we are assured by our city council). In the first year, we will need 3 police officers. That’s $609,335/year. My taxes should not go up. We elect you to run it right. I did my due diligence. Tom (Reilly), I don’t know what number will make you happy. The difference is $89,000/year. Do the arithmetic. $1.4 million for 1.5% in revenues from the PILOT. Over time, this is the lowest PILOT. It makes sense. Every single one can be Chapter 11. I am asking you to look at the PILOT. This is the one we need. The apartments will include: 73 studio apts.; 234 l1-bedroom apts.; 117 1-bedroom apts. with a den; 62 2-bedroom-2 bathrooms. How many kids are involved? I know our schools are overcrowded. If you get 20% with 2-bedroom with kids that’s 12 kids. You are going to have 12 more students. SARA gave $300,000 for computers. How many kids did we get from Woodmont? 8 kids from Woodmont. Look at it with open minds. There are 15 developers in the state who can handle it. If we don’t go forward, it puts us in 2 years. That puts us back $2.5 million. If you walk away, you have nothing. You asked me to do my due diligence. I took it seriously. I want you to look openly and fairly. I know what you are dealing with. We get $2 million, and we get rid of a liability. It’s the biggest headache in this town.”

Councilwoman Zusette Dato thanked Mr. Kales for his work. 

The meeting went into closed session at 7:40 p.m.

SOUTH AMBOY – Lawyer Kevin P. McManimon who is representing Manhattan Beach LLC is questioned by Councilman Tom Reilly