[HISTORY: Adopted by the Township Committee
of the Township of Lumberton as indicated in article histories. Amendments
noted where applicable.]
[Adopted 12-1-2009 by Ord. No. 2009-11-013[1]]
[1]
Editor's Note: This ordinance superseded former Art. I, Route
38 Commercial Corridor, adopted 4-6-1998 by Ord. No. 1998-15.
The Township of Lumberton may enter into agreements with property
owners and/or developers for tax abatement and/or exemptions on commercial
and industrial improvements or projects, pursuant to the provision
of P.L. 1991, c. 441,[1] as amended, for periods not to exceed five years.
[1]
Editor's Note: See N.J.S.A. 40A:21-1 et seq.
The following definitions shall govern agreements for tax abatement
and/or exemption entered into by the Township of Lumberton and developers:
A.
ABATEMENT
COMPLETION
CONSTRUCTION
EXEMPTION
IMPROVEMENT
Definitions. The following words shall have the following meanings,
consistent with the provisions of N.J.S.A. 40A:21-3:
That portion of the assessed value of a property as it existed
prior to construction or improvement of a building or structure thereon,
which is exempted from taxation pursuant to this Act.[1]
Substantially ready for the intended use for which a building
or structure is constructed or improved.
The provision of a new commercial or industrial structure,
or the enlargement of the volume of an existing commercial or industrial
structure by more than 30%, but shall not mean the conversion of an
existing building or structure to another use.
That portion of the Assessor's full and true value of
any improvement or construction not regarded as increasing the taxable
value of a property pursuant to this article and the Five Year Exemption
and Abatement Law, L. 1991, c. 441,[2] as amended.
A modernization, rehabilitation, renovation, alteration or
repair which produces a physical change in an existing building or
structure that improves the safety, sanitation, decency or attractiveness
of the building or structure as a place for human habitation or work,
and which does not change its permitted use. In no case shall it include
the repair of fire or other damage to a property for which payment
of a claim was received by any person from an insurance company at
any time during the three-year period immediately preceding the filing
of an application pursuant to this Act.[3]
The following procedures shall be followed in applying for the
benefits authorized by the article:
A.
All improvements and construction, as defined above, shall be exempt
from local real property taxes, if approved by the Township Committee
after proper application has been made pursuant to L. 1991, c. 441,[1] to both Committee and the Tax Assessor. Application shall
be made upon the forms prescribed by the Director of the Division
of Taxation in the Department of the Treasury.
[1]
Editor's Note: See N.J.S.A. 40A:21-1 et seq.
B.
Applicants shall be encouraged to apply for tax exemption and/or
abatement on improvements and construction prior to the commencement
of construction of the improvement or construction, provided that
the applicant must file a proper application with the Township Committee
and the Tax Assessor within 30 days of the completion of the improvement
or construction in order to be eligible for tax exemption thereon.
The Tax Assessor will simultaneously file with the Mayor and Township
Clerk copies of the application.
C.
Every properly completed application for exemption of one or more
improvements or construction projects, which is filed within 30 days
of the completion of the improvement or construction project, shall
be considered by the Committee and Assessor to the degree that the
application is consistent with the provision of the adopting ordinance
or tax agreement, provided that the improvement, conversion, alteration
or construction for which the application is made qualifies as an
improvement, a conversion, alteration or construction pursuant to
the provisions of the Five Year Exemption and Abatement Law, L. 1991,
c. 441 (N.J.S.A. 40A:21-1 et seq.), and the tax agreement, if any.
The granting of an exemption, or exemption and abatement, or tax agreement
shall be recorded and made a permanent part of the official tax records
of the municipality, which records shall contain a notice of determination
date thereof.
D.
New construction. Applicants for tax exemption and abatement for
new construction of commercial or industrial structures shall provide
the municipal governing body with an application setting forth:
(1)
A general description of the project for which exemption and abatement
is sought;
(2)
A legal description of all real estate necessary for the project;
(3)
Plans, drawings, and other documents as may be required for the Township
of Lumberton to demonstrate the structure and design of the project;
(4)
A description of the number, classes, and types of employees to be
employed at the project site within two years of completion of the
project;
(5)
A statement of the reasons for seeking tax abatement on the project,
and a description of the benefits to be realized by the applicant
if a tax agreement is granted;
(6)
Estimates of the cost of completing such a project;
(7)
A statement showing: 1) the real property taxes currently being assessed
at the project site; 2) estimated tax payments that would be made
annually by the applicant on the project during the period of the
agreement; and 3) estimated tax payments that would be made by the
applicant on the project during the first full year following the
termination of the tax agreement;
(8)
A description of any lease agreements between the applicant and proposed
users of the project, and a history and description of the users'
business; and
(9)
Such other pertinent information as the Township Committee may require,
which shall simultaneously be filed with the Tax Assessor and Township
Clerk.
E.
Determination of value. In determining the value of property, the
Township shall regard up to the Assessor's full and true value
of the improvements as not increasing the value of the property for
a period of five years, notwithstanding that the value of the property
to which the improvements are made is increased thereby. During this
exemption period, the assessment on the property shall not be less
than the assessment thereon existing immediately prior to the improvements,
unless there is damage to the structure through action of the elements
sufficient to warrant a reduction. Notwithstanding anything else herein
contained in this article to the contrary, it is specifically provided
that any exemption for improvements shall be authorized on an individual
basis as to review, evaluation and approval of each application by
the governing body.
F.
Tax agreements. Upon adoption of this article, and upon its reaching
its effective date as provided for in Article V, Section 3,[2] below, the governing body may enter into a written agreement
with the applicant for exemption and abatement of local real property
taxes. The agreement shall provide for the applicant to pay to the
municipality in lieu of full property tax payments an amount annually
to be computed by one, but in no case a combination, of the following
formulas:
(1)
Cost basis: The agreement may provide for the applicant to pay to
the municipality in lieu of full property tax payments an amount equal
to 2% of the cost of the project. For the purposes of the agreement,
"the cost of the project" means only the cost of fair market value
of direct labor and all materials used in the construction, expansion,
or rehabilitation of all buildings, structures and facilities at the
project site, including the costs, if any, of land acquisition and
land preparation, provision of access roads, utilities, drainage facilities,
together with architectural, engineering, legal, surveying, testing,
and contractors' fees associated with the project; which the
applicant shall cause to be certified and verified to the governing
body by an independent and qualified architect, following the completion
of the project.
(2)
Gross revenue basis: The agreement may provide for the applicant
to pay the municipality in lieu of full property tax payments an amount
annually equal to 15% of the annual gross revenues from the project.
For purposes of the agreement, "annual gross revenues" means the total
annual gross rental and other income payable to the owner from the
project. If in any leasing, any real estate taxes or assessments on
property included in the project, any premiums for fire or other insurance
on or concerning property included in the project, or any operating
or maintenance expenses ordinarily paid by the landlord, are to be
paid by the tenant, then those payments shall be computed and deemed
to be part of the rent and shall be included in the annual gross revenue.
The tax agreement shall establish the method of computing the revenues
and may establish a method of arbitration by which either the landlord
or tenant may dispute the amount of payments so included in the annual
gross revenue.
(3)
Tax phase-in basis: The agreement may provide for the applicant to
pay the municipality in lieu of full property tax payments an amount
equal to a percentage of taxes otherwise due according to the following
schedule:
(a)
In the first full year after completion, no payment in lieu
of taxes otherwise due;
(b)
In the second tax year, an amount not less than 20% of taxes
otherwise due;
(c)
In the third tax year, an amount not less than 40% of taxes
otherwise due;
(d)
In the fourth tax year, an amount not less than 60% of taxes
otherwise due; and
(e)
In the fifth tax year, an amount not less than 80% of taxes
otherwise due.
[2]
Editor's Note: Article V, Section C, of this ordinance
stated that "this ordinance shall take effect after proper passage
in accordance with the law."
Disqualification from exemption/abatement. No exemption or abatement
shall be granted, or tax agreement entered into, pursuant to this
article or the statute authorizing this article with respect to any
property for which property taxes are delinquent or remain unpaid,
or for which penalties for nonpayment of taxes are due; or for which
other municipal charges (water, sewer, land use escrow fees, etc.)
are due.
A.
All tax agreements entered into by the Township pursuant to this
article shall be in effect for no more than five full tax years next
following the date of completion of the project.
B.
Any agreement entered into pursuant to this article shall be subject
to the condition that all taxes and other municipal charges (water,
sewer, land use escrow fees, etc.) shall be kept current to the extent
same are assessed. In the event taxes and charges go unpaid for more
than six months beyond the date upon which become due, then the agreement
shall become null and void, and the abatement/exemption agreed to
therein shall expire and be lost to the property owner and/or developer;
and the property shall be restored to full assessment. This condition
shall be binding and effective notwithstanding the absence of any
reference to same in the tax abatement/exemption agreement with the
owner/developer.
