Mayor Baraka signed into effect today changes and additions to a city ordinance that will hold real estate taxes steady until 2020 for multiple dwelling, commercial and industrial redevelopment projects, and offer a varied tax basis until 2020 for newly constructed multiple dwelling, commercial or industrial properties located in Newark neighborhoods, specifically outside of the downtown district, the Newark Airport and the Newark Port.
“Time and time again we hear the concerns of residents that they want for their respective communities the exact sort of development currently happening downtown. Not only does this legislation incentivize developers to seek out neighborhoods typically ignored, it ensures Newarkers will see their immediate communities revitalized,” said Khalil Nassiruddin, Chief of Staff for Councilwoman Chaneyfield Jenkins.
As part of the Mayor’s development and revitalization strategy, the Newark City Council approved and he signed into law, legislation that seeks to promote real-estate development throughout the City and incentivize small developers and business and property owners to improve their assets.
• Property owners of multiple dwelling, commercial or industrial properties within the designated neighborhoods that make improvements to their properties will not receive any increase in their tax assessment over the next five (5) years.
• New construction of multiple dwelling, commercial or industrial properties shall receive a five-year tax assessment based on one of the following formulas¹:
o Costs basis: Two percent of construction costs of construction :
o Gross-revenue basis: Fifteen percent of the project’s annual gross revenues
o Tax phase-in basis:
Year 1: 0% payment in lieu of taxes
Year 2: 20% payment in lieu of taxes
Year 3: 40% payment in lieu of taxes
Year 4: 60% payment in lieu of taxes
Year 5: 80% payment in lieu of taxes
As part of the City’s Department of Economic & Housing Development’s charge to stimulate development citywide, the ordinance was approved third quarter 2015 and takes effect this tax year, 2016. “This is one of the most aggressive measures we have taken to improve our neighborhoods,” said Economic & Housing Development Director and Deputy Mayor Baye Adofo-Wilson. “Incentives like these are essential to ensuring that all of Newark’s neighborhoods grow and prosper. This five-year abatement allows everyone to participate in the City’s growth and development.”
All tax exemptions and abatements will require final approval by the Newark City Council. Additionally, qualifying categories for improvements will also require Newark City Council or tax assessor approval. A written application for the exemption or abatement must be filed within 30 calendar days of project and/or improvement completion.
¹ Specified in N.J.S.A. 40A:21-9
