The body passed an amendment that gave the Planning Board permission to investigate whether the Maxwell House site on the waterfront qualifies to become a city-designated redevelopment site.
The council also held its annual budget hearing. Only two people spoke at the hearing, but more questions than answers were raised about the upcoming $59.6 million budget. What was clear was that the budget is still not yet finished and will undergo several changes before it is finally adopted.
Finally, the city approved the selection of Mayor David Roberts' former campaign manager, Michael Lenz, as the city's interim chief financial officer.
Investigating Maxwell House redevelopment
The council voted on and approved a resolution authorizing the Planning Board to undertake a preliminary investigation to determine whether the old Maxwell House site should be designated as a "redevelopment" site.
Currently the developers of the property have before the Planning Board an application for 982 residential units, including townhouses, duplexes, and apartments; 1,674 parking spaces, and a four-acre waterfront park that will be fully accessible to the public. Each unit in the development, if approved, will be slightly over 1,100 square feet in area, and the entire residential component will equal roughly 1,090,000 square feet. The former Maxwell House Plant closed in 1992 and has not been developed.
But now it has been announced that the city is taking the first steps toward possibly declaring the site a redevelopment site.
Redevelopment is a technical zoning term that means that there is an area within the municipality that, for one or more reasons, is not being used to its full potential.
The governing body of the municipality, in this case the City Council, is the entity that is charged with the responsibility of assessing the conditions of an area to determine whether it should be named for redevelopment.
The procedure begins with a resolution by the governing body directing the Planning Board to undertake a preliminary investigation to assess the site. After publication of the required notice, preparation of a map, and statement of the basis for the investigation, a hearing is held at which people who are interested will be heard and afforded an opportunity to express their objections, have them considered, and made part of the public record.
After completing the hearing, the Planning Board makes recommendations to the governing body who then can adopt a resolution determining the area, or any part of it, a redevelopment area.
One of the biggest advantages to declaring the Maxwell House site a redevelopment site is that the city would be able to establish a Payment in Lieu of Taxes (PILOT) agreement with the developers. According to the Local Redevelopment and Housing Law and its companion statutes, tax abatements are allowed and encouraged to attract private parities to implement the redevelopment plans.
In this case, the city would come to an agreement with the developers on a discounted tax rate. The city would benefit from that discounted rate because all of the money raised from PILOT payments would go directly into the city's coffers. Property taxes are usually divided between the city, the county, and the school district. But with PILOT, the schools and the county are cut out and all the money goes directly to the city.
According to City Business Administrator Robert Drasheff, PILOT payments are a "win-win" situation for both the city and the developer. He said that in addition to claiming a larger piece of the tax pie, the city "would be able to work with the developer to downsize the development" because the developers are receiving a reduced tax rate.
Developer George Vallone said Thursday that he would support establishing a PILOT payment as long as those negotiations do not "slow or stop" the application that is currently ongoing before the Planning Board. The application for the 982-unit development has already had 15 hearings before the Planning Board and Vallone said he fully intends to stay the course and continue with his current proposal, but he added that he is will to listen to what the city has to say.
Local activists have said the project is too big.
There is language in Wednesday's resolution that allows that currently proposed project to continue before the Planning Board at its next scheduled hearing on Oct. 17 at 7 p.m. The resolution states that "the parties will negotiate concerning redevelopment, but the city will not proceed to adopt any redevelopment ordinance affecting the Maxwell House site without the applicant's consent before a decision on the applicant's current Planning Board Application."
While the developers' rights are protected by the wording of the resolution, Director of Community Development Fred Bado said Thursday that making the property a redevelopment area could give the city more say in what is eventually built on the site. He said that the city could negotiate with the developers on both density and use issues.
He added that one concept that the redevelopment plan might revive is placing a school on the site. Last year the mayor established the Hoboken/Steven Partnership for Public Education, with the goal of building a school on the Maxwell House property. While details of those plans are in limbo, the possible designation of the Maxwell House property as a redevelopment site increases the possibility that one day there could be a school on that property, said Bado. "Trying to impose this public plan into an existing private plan really doesn't work," said Bado about the possibility of a public school on the site. But under a redevelopment plan that the city creates with the developer, there is a much greater possibility of a public/private partnership.
He added that another benefit to labeling the property a redevelopment site is that new funding for projects could become available, from sources such as the Economic Development Authority and the New Jersey Redevelopment Authority.
City Council President Ruben Ramos Jr. said Thursday that he hopes the city can work with the developers to create a plan that benefits as many residents as possible. "I think it is absolutely a good idea," said Ramos about the prospects of redevelopment. "We need to sit down [with the developers] and try to hammer something out."
He added that some of the ideas he has for the site include a school, a firehouse or a library. He also said that it might be in the best interest of the city to downsize the project.
Budget in flux
The City Council held its annual budget hearing Wednesday, but City Business Administrator Robert Drasheff was clear that there will be significant amendments to the budget before it is finally voted on and approved. The budget that was introduced calls for $59.6 million in spending, which is $4.7 million more than last year.
The budget calls for $17.4 million to be raised by taxes, approximately $800,000 more than last year. Drasheff blamed the increase on substantial hikes in health care costs and municipal debt service, as well as the burden of overexpenditures from previous years.
But according to Drasheff, the increase in the municipal tax levy should be off set by new taxable properties coming on line in the next year, and the municipal portion of the tax rate should stay stable at $7.84 per $1,000 of assessed property.
According to Drasheff, what is shaping up as a possible amendment to the budget is the prospect of a new parking department. In the current proposed budget there is no Parking Utility. Roberts has taken the first steps toward dissolving the Hoboken Parking Authority (HPA) and bringing its property and services under the oversight of the city.
This Wednesday, the Division of Local Government Services under the Department of Community Affairs is scheduled to hold a hearing in Trenton to approve or deny Hoboken's plan to absorb the HPA. If they give the city the OK, and the council approves the move at the next council meeting Oct. 16, Drasheff can insert the anticipated revenues and expenses of the former HPA into a budget item titled "Parking Utility".
Drasheff also said that several possible revenue sources and state aid awards have not been realized, which may also cause the budget to be amended. "The revenue side is starting to look a lot brighter," said Drasheff. "With the help of the state, we are cleaning up the books and dealing with the difficulties left by the CFO that must be clarified." (The city announced last week that it has suspended its chief financial officer, George DeStefano, and charged that he may have mishandled city funds over the past three years.)
Another area of the budget that might be amended concerns the possibility of the city selling the municipal garage on Observer Street this year, said Drasheff.
Currently the city has budgeted $2.6 million in revenue from the sale of the garage. "Depending on resolution of several revenue issues there is a chance that will be put off until next year," said Drasheff.
Drasheff forecasted that there will be several other amendments before a final budget is presented to the council and the public.
Because there are likely to be major changes, Councilman Tony Soares proposed that the public hearing remain open until the final budget is presented. Drasheff advised that it is proper to close the hearing but that the public would have an opportunity to speak on any amendments that are made.
It has not yet been announced when public hearing on the amendments or a final vote on the budget will be held.
Lenz hired as interim CFO
At Wednesday's meeting, the council approved the hiring of temporary CFO Michael Lenz to become the full-time interim CFO. Lenz was Roberts' campaign manager during last year's mayoral election. Later, around the time the Parking Authority failed to give him an HPA appointment that he was rumored to be getting, he broke from Roberts and ran unsuccessfully against Roberts' candidate, Christopher Campos, in the 4th Ward council election.
Lenz has also has served as president on the Hoboken Board of Education. In the early 1990s, while he was board president, the board (which contained Lenz's "reform" majority) came under fire for suspending Superintendent of Schools Edwin Duroy. When a new school board majority was elected, they brought Duroy back, and an outside investigator found no proof of the financial mismanagement charges against Duroy. (Duroy is currently the head of the Paterson school district.)
While Lenz is an experienced Certified Public Accountant, he does not have a CFO certification, according to Drasheff. But the state statute allows an interim CFO to serve one year as long has he or she attends state mandated classes. Drasheff added that the interim period can be extended an extra year with state approval. If Lenz does complete the state-required classes he will be eligible to become the permanent CFO. The city placed an ad in the Reporter seeking a CFO last week.
According to Lenz, he is currently taking classes two days a week, and is paying the costs of the classes out of his own pocket. He said he does not know if he will be reimbursed.
According to Drasheff, Lenz's salary is still being negotiated.
The position of CFO became vacant last week when George DeStefano was suspended indefinitely.