The ordinance was for the approval of a 20-year tax abatement for a project to be built at 20 Newport Parkway.
The building would be 16 stories with 212 market rate residential condominium units; a 7-story parking garage for 542 parking spaces, and one retail unit with approximately 36,300 square feet of space.
James McCann, an attorney for the Shore Club South Urban Renewal Company, LLC (of which James and Richard LeFrak of the Newport Development Company are the principals), said at the meeting that if the council granted the abatement, construction would start as early as this summer and end in 2007.
But this abatement has been controversial from the time it was introduced in the City Council at the previous meeting on Feb. 9.When abatements are granted, it means that developers pay a percentage of the revenue earned from the development directly to a municipality instead of regular property taxes that change from year to year. The payments are often called PILOTs (payments in lieu of taxes), whereby developers give the money directly to the municipalities rather than paying full taxes for a period of 20 or 30 years.
PILOTs are hotly debated because while the payments are legal under state statute, they allow developers to avoid paying school and county taxes, while regular taxpayers have to bear the costs of both.
Abatements have been designed to draw developers to unused or blighted land. But their critics have argued that in this development climate, they're no longer necessary.
During the public speaking portion of an initial Feb. 9 meeting, two longtime Jersey City residents - Yvonne Balcer and Dan Falcon - spoke out against the abatement, saying the project would be constructed on a prime piece of real estate in an area that is already overdeveloped.
At that meeting, there were only a handful of attendees, but last week's meeting saw a much bigger crowd, many of the individuals finding out through the "JClist" Internet bulletin board that Falcon operates.
Balcer and Falcon again spoke out against the abatement, but were joined a number of other speakers, pro and con.
After nearly three hours of listening to public speaking for and against the abatements, the City Council voted 7-2 in favor of the abatement. What is an abatement?
The granting of abatements has always been hotly debated. But most developers justify the need by saying their buildings will provide jobs to city residents, and attract a populace who will bring more money into a city and contribute to the city's further economic growth.
In Jersey City, thousands of projects constructed over the past 20 years within the city have been granted abatements. Usually, the request is submitted to the City Council for their approval in the form of an ordinance.
In the case of last week's City Council meeting, there were other abatements for residential condominiums that were approved unanimously by the council with very little opposition from the public.
The City Council has often looked favorably on abatements because the money received has been utilized for closing budget gaps, which council members have stated at past council meetings enables the city to avoid raising municipal taxes.
(In this case, the developers would pay directly to the city an annual charge of $1,344,894 along with a contribution to the city's Affordable Housing Trust Fund in the amount of $373,963.) No abatement or no jobs
Some residents brought signs protesting the abatement.
Those in support were construction workers who had worked on previous projects in the Newport area, many coming in two buses parked in front of City Hall, and office workers working along the waterfront. They expressed the fear that the project by the Shore Club Company would not be built if the abatement was not approved.
"They need this work.....I hear the horror stories," said Don Capasso of the Jersey City-based Local 14 Building and Metal Trades Union. "This will be a light at the end of the tunnel. These are not just construction workers, but also they're your neighbors."
That prompted a question from Viola Richardson, asking if many of the construction jobs on the project would be filled by Jersey City residents. Capasso said many of the workers on the proposed project would be hired from Jersey City.
Eddie Torres, a construction worker who grew up in Downtown Jersey City, remembers how many developments were built in the mid 1980s in what became known as the Newport section. He said it happened as result of abatements on those projects.
"It gave me a five-year education," he said. "As the buildings got built....I was still able to work and I was still able to make a living."
But speakers against the abatement said the project could still be built without it. They said it would place further taxation upon homeowners and would not bring about further economic growth.
Sam Stoia, a resident of Jersey City since 1992 and a current homeowner in the Hamilton Park section, spoke against the abatement on the grounds that it would be an economic liability.
"There is nothing to demonstrate that this new building will bring new economic life to Jersey City. This building will go up with or without the abatement, and these union employees will be hired regardless," said Stoia.
Warren Curtin, a real estate agent and a homeowner who also resides in the Hamilton Park area, argued that giving an abatement to a developer who could afford to build and pay the normal taxes on a prime piece of real estate was "unconscionable." A 'Shore' bet
The council voted 7-2 to approve the 20-year tax abatement for the project by the Shore Club Company.
Ward A Councilwoman Kathleen Curran voted in favor on the basis that the abatement would allow for a project by a developer such as LeFrak who has also built several schools and recreation facilities in the Newport area. She said the PILOT payments would help to stabilize city's tax rate.
Ward F Councilperson Junior Maldonado, who represents most of Downtown Jersey City including the Newport area, voted against the abatement, pointing out that project would be built near the Jersey City waterfront, a location with plenty of development taking place.
"I see big projects going up on the waterfront in Hoboken and Weehawken and West New York that are being done without an abatement, and I have to ask, can [the Shore Club project] be done without an abatement?" said Maldonado. "I believe it can be done and will be done."
Maldonado also volunteered his services as a chairman of the Jersey City Redevelopment Agency to help find a developer who would build the project without tax abatement.