Despite a presentation from officials of the newly-opened 77 Hudson Street condominium towers, the City Council on Wednesday denied an application for an extension of their tax abatement, as recommended by Mayor Jerremiah Healy.
The council resolved 8-0 to “disapprove” an extension of the abatement from 20 to 30 years and to lower the service charge they pay to the city in lieu of taxes, changes the developers said were necessary to sell more condos in a difficult economy.
The vote was only days after the grand opening ceremony for the complex in downtown Jersey City. Attended by Mayor Healy, associates of K. Hovnanian Homes and EQR, the developer partners in the project, and other guests, the event on Oct. 8 for the two buildings – a 420-unit condo building and a 481-unit rental building – was not without some intrigue.
“We believe it’s a fairness issue.” – Eugene Paolino
Healy said in the letter that 77 Hudson Street is located in an area that will see a consistent stream of residents moving into the condo building and does not need the abatement to survive the tough economy.
When interviewed at the grand opening, Healy said he will “not change his mind” on standing against the abatement. Wednesday his stance was adopted by the City Council, seven of whom ran on his election ticket in May.
Ward B Councilman Phil Kenny was not present. He stepped down from his council seat on Oct. 6 after he pled guilty to accepting bribes from a federal informant. (see story pg. 3).
Developers were seeking ‘fairness’
K. Hovnanian official Tom Graham said at the grand opening that his company would make a presentation at last Wednesday’s council meeting to try to convince the council to approve the change. That presentation was given during the public speaking portion of the meeting.
The developer’s attorney, Eugene Paolino, spoke much longer than the allotted five minutes to argue why the change in the 77 Hudson Street abatement should be approved by the council.
Paolino cited the letter by Healy advising the council not to vote for the abatement change, pointing out last summer Healy had supported a change for the abatement for Crystal Point, a 42-story, 269-unit building that initially also had a 20-year abatement with a 16 percent service charge.
At a July meeting the council approved an amendment that increased Crystal Point’s abatement to 30 years, and reduced the service charge payments to 10 percent for the first five years, 12 percent for the next five years, and then 16 percent for the final 20 years.
But Healy said in the letter that Crystal Point was located in an area not accessible to public transit and would have a harder time getting people to move there.
Paolino said the situations for both buildings are not any different. Both are struggling to sell condos, he said, and are “competitors.”
“We believe it’s a fairness issue,” Paolino said. “What’s proper for Crystal Point is proper for us.”
After Paolino, three other people spoke to buttress the case for the 77 Hudson Street abatement change. However, Randy Brosseau, area president for K. Hovnanian, may have alienated some on the council who were considering voting for the change.
When Councilman Steven Fulop asked Brosseau how many 77 Hudson Street condo units have been sold so far, he would not give precise figures, claiming the information could not be divulged due to “corporate policy.” Brosseau estimated only a “third” of the condos had been sold, which would be 140.
Fulop replied that he needed “specific” information from an applicant who wanted an abatement change.
Ricardo Kaulessar can be reached at firstname.lastname@example.org.