City of East Orange, NJ
Essex County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the City Council of the City of East Orange as indicated in article histories. Amendments noted where applicable.]
GENERAL REFERENCES
Rent control and conversions — See Ch. 218.
Tenants' property tax rebate — See Ch. 251.
Article I Five-Year Tax Exemptions and Abatements

§ 247-1 Purpose.

§ 247-2 Definitions.

§ 247-3 Exemptions or abatements for improvements to dwellings, construction of new dwellings and conversions to dwellings.

§ 247-4 Exemptions or abatements for improvements to or conversion to multiple dwellings.

§ 247-5 Exemptions or abatements for improvements to commercial or industrial structures.

§ 247-6 Application procedure; contents of applications and financial agreements.

§ 247-7 Tax agreements for exemptions and abatements on new construction of dwellings, commercial or industrial structures or multiple dwellings.

§ 247-8 Termination of agreements.

§ 247-9 Assessment of true taxable value and determination of tax due.

§ 247-10 Additional improvement, conversion or construction.

§ 247-11 Ineligibility of property for which property taxes are due.

§ 247-12 Applicability of exemption or abatement.

§ 247-13 Payment of fee.

§ 247-14 Conformance with construction, statutory and regulatory requirements.

§ 247-15 Effective date of applications.

§ 247-16 Amendments; effect.

§ 247-17 Report of exemptions and abatements.

§ 247-18 Notice to property owners in eligible areas.

Article II Long-Term Tax Exemptions and Payments in Lieu of Taxes

§ 247-19 Purpose.

§ 247-20 Definitions.

§ 247-21 Mayor's Tax Exemption Review Committee.

§ 247-22 Application.

§ 247-23 Consideration and recommendation.

§ 247-24 Enabling legislation.

§ 247-25 Form of financial agreement.

§ 247-26 Execution and distribution of financial agreement.

§ 247-27 Oversight and billing.

§ 247-28 Administration of agreements after project completion.

§ 247-29 Termination of long-term tax exemptions.

§ 247-30 Second term tax exemption.

§ 247-31 Review of second term tax exemption request.

§ 247-32 Form of financial agreement for second term tax exemption.

§ 247-33 Term of second term tax exemption.

§ 247-34 Filing.

[Adopted 11-24-2008 by Ord. No. 20-2008[1]; amended in its entirety 5-16-2011 by Ord. No. 13-2011]
[1]
Editor's Note: This ordinance also repealed former Ch. 247, Tax Exemptions and Abatements, adopted 6-12-1995 by Ord. No. 7-1995, which ordinance was originally adopted as Ch. 247A, but was renumbered as Ch. 247, Art. I, to fit into the organizational structure of the Code.

§ 247-1 Purpose.

The Five-Year Exemption and Abatement Law, N.J.S.A. 40A:21-1 et seq., was enacted to consolidate the various five-year tax exemption and abatement statutes enacted pursuant to Article VIII, Section 1, Paragraph 6 of the New Jersey Constitution. The purpose of this article sets forth the procedures to be followed by the City in consideration of all applications for the exemption from or abatement of property taxes, and in the administration of all tax exemption and/or abatement agreements as are authorized by the City Council consistent with and pursuant to the Five-Year Exemption and Abatement Law, N.J.S.A. 40A:21-1 et seq., as amended and supplemented from time to time. The intent of said property tax exemptions and abatements is to induce construction and rehabilitation of residential, industrial and commercial facilities and to stabilize the economic base of the City.

§ 247-2 Definitions.

A. 
As used in this article, the following terms shall have the following meanings unless the context clearly indicates that a different meaning is intended:
ABATEMENT
That portion of the assessed value of a property as it existed prior to construction, improvement or conversion of a building or structure thereon, which is exempted from taxation pursuant to applicable state law.
AREA IN NEED OF REHABILITATION
A portion or all of a municipality which has been determined to be an area in need of rehabilitation or redevelopment pursuant to the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq.
ASSESSOR
The officer of a taxing district charged with the duty of assessing real property for the purpose of general taxation.
COMMERCIAL OR INDUSTRIAL STRUCTURE
A structure or part thereof used for the manufacturing, processing or assembling of material or manufactured products, or for research, office, industrial, commercial, retail, recreational, hotel or motel facilities, or warehousing purposes, or for any combination thereof. The governing body must determine that said structure will tend to maintain or provide gainful employment within the municipality, assist in the economic development of the municipality, maintain or increase the tax base of the municipality, and maintain or diversify or expand commerce within the municipality. It shall not include any structure, or part thereof, used or to be used by any business relocated from another qualifying municipality.
COMPLETION
Substantially ready for the intended use for which a building or structure is constructed, improved or converted.
CONDOMINIUM
A property created or recorded as a condominium pursuant to the Condominium Act, N.J.S.A. 46:8B-1 et seq.
CONSTRUCTION
The provision of a commercial or industrial structure, a new dwelling or multiple dwelling, or the enlargement of the volume of any such structures by more than 30%. However, it shall not mean the conversion of an existing building or structure to another use.
CONVERSION
The alteration or renovation of a nonresidential building or structure, hotel or motel, or motor hotel or guesthouse in such a manner as to convert the building or structure from its previous use to use as a dwelling or multiple dwelling.
COOPERATIVE
A housing corporation or association wherein the holder of a share or membership interest thereof is entitled to possess and occupy for dwelling purposes a house, apartment or other unit of housing owned by the corporation or association, or to purchase a unit of housing owned by the corporation or association.
COST
When used with respect to abatement for dwellings or multiple dwellings, only the cost or fair market value of direct labor and materials used in improving a multiple dwelling, or of converting another building or structure to a multiple dwelling, or of constructing a dwelling, or of converting another building or structure to a dwelling. The cost shall include any architectural, engineering and contractors' fees associated therewith, as the owner of the property shall cause to be certified to the governing body by an independent and qualified architect after completion of the project.
DWELLING
A building or part of a building used, to be used, or held for use as a home or residence, including accessory buildings located on the same premises together with the land upon which such buildings are erected and which may be necessary for the fair enjoyment of the property, but it shall not mean any building or part of a building defined as a multiple dwelling pursuant to the Hotel and Multiple Dwelling Law, N.J.S.A. 55:13A-1 et seq.
EXEMPTION
That portion of the Assessor's full and true value of any improvement, conversion or construction not regarded as increasing the taxable value of a property pursuant to applicable state law.
HORIZONTAL PROPERTY REGIME
A property submitted to a horizontal property regime pursuant to the Horizontal Property Act, N.J.S.A. 46:8A-1 et seq.
IMPROVEMENT
A modernization, rehabilitation, renovation, alteration or repair which produces a physical change in an existing building or structure that improves the safety, sanitation or attractiveness of the building or structure as a place for human habitation or work and which does not change its permanent use. In the case of a multiple dwelling, it includes only improvements which affect common areas or elements or three or more dwelling units within the multiple dwelling. In the case of a multiple dwelling or commercial or industrial structure, it shall not include ordinary painting, repairs and replacement of maintenance items or an enlargement of the volume of an existing structure by more than 30%. 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 for tax exemption and abatement.
MULTIPLE DWELLING
A building or structure meeting the definition of multiple dwelling set forth in the Hotel and Multiple Dwelling Law, N.J.S.A. 55:13A-1 et seq. It means, for the purpose of improvement or construction, the general common elements and common elements of a condominium, a cooperative or a horizontal property regime.
B. 
Any other words and phrases used in this article and not defined above shall have the meanings set forth in N.J.S.A. 40A:21-3.

§ 247-3 Exemptions or abatements for improvements to dwellings, construction of new dwellings and conversions to dwellings.

A. 
Improvements to dwellings.
(1) 
In determining the value of real property for purposes of an exemption from taxation of improvements to dwellings, the first $15,000 in assessor's full and true value of improvements for each dwelling unit primarily and directly affected by the improvement in any dwelling more than 20 years old shall be regarded 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 the exemption period, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements, unless an abatement is granted pursuant to Subsection A(2) of this section or there is damage to the dwelling through action of the elements sufficient to warrant a reduction.
(2) 
Abatements for improvements to dwellings. In addition to providing for an exemption for improvements to dwellings, an abatement may also be provided of some portion of the assessed value of property receiving the exemption as it existed immediately prior to the improvements, as follows:
(a) 
The annual amount of the abatement granted to any single property shall be up to 30% of the annual amount of the exemption granted for a total period of up to five years.
B. 
Construction of new dwellings and conversion to dwellings.
(1) 
In determining the value of real property for purposes of an exemption from taxation of some portion of the assessed valuation of construction of new dwellings or conversions of buildings and structures, including unutilized public buildings to dwelling use, up to 25% of the Assessor's full and true value for each new construction or conversion alteration unit made shall be regarded as not increasing the value of the property for a total period of up to five years, notwithstanding that the value of the property upon which the new construction or conversion occurs is increased thereby.
(2) 
Abatements for construction of new dwellings and conversion to dwellings. In addition to providing for an exemption of some portion of the assessed valuation of construction of new dwellings or conversions of buildings and structures, an abatement may also be provided of some portion of the assessed value of the property receiving the exemption as it existed immediately prior to the construction or conversion alteration as follows:
(a) 
The annual amount of the abatement granted to any single property shall be up to 30% of the total cost of the construction or conversion alteration for a total period of up to five years.

§ 247-4 Exemptions or abatements for improvements to or conversion to multiple dwellings.

A. 
In determining the value of real property for purposes of an exemption from taxation of improvements to multiple dwellings or of conversions of other buildings and structures, including unutilized public buildings, to multiple-dwelling use, or both, up to the Assessor's full and true value of the improvements or conversion alterations shall not be regarded as increasing the value of the property for a period of five years, notwithstanding that the value of the property to which the improvements or conversion alterations are made is increased thereby. During the exemption period, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements or conversion alterations, unless an abatement is granted pursuant to Subsection B of this section or there is damage to the multiple dwelling through action of the elements sufficient to warrant a reduction.
B. 
Abatements for improvements to or conversion to multiple dwellings. In addition to providing an exemption of some portion of the assessed value of improvement or conversion alteration to a multiple dwelling as it existed immediately prior to the improvement or conversion alteration, an abatement may also be provided of some portion of the assessed value of property receiving the exemption as it existed immediately prior to the improvement or conversion alteration, as follows:
(1) 
The annual amount of the abatement granted shall be up to 20% of the total cost of the improvement or conversion alteration, and the total number of abatements granted to any single property shall not exceed the total cost of the improvement or conversion alteration. The abatement shall be for a total period of up to five years.

§ 247-5 Exemptions or abatements for improvements to commercial or industrial structures.

A. 
Exemptions for improvements to commercial or industrial structures. In determining the value of real property for purposes of an exemption from taxation of improvements to commercial or industrial structures, up to the Assessor's full and true value of the improvements shall not be regarded as increasing the value of the property for a period of five years, notwithstanding that the value of the property to which the improvements or conversion alterations are made is increased thereby. During the exemption period, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvements or conversion alterations, unless there is damage to the multiple dwelling through action of the elements sufficient to warrant a reduction.
B. 
Authorization of exemptions on a case-by-case basis. Exemptions for improvements to commercial or industrial structures shall only be authorized on a case-by-case basis after review, evaluation and approval of each application by the City Council.

§ 247-6 Application procedure; contents of applications and financial agreements.

A. 
Application procedure for Five-Year Exemption and Abatement Law.
(1) 
No exemption or abatement shall be granted pursuant to the Five-Year Exemption and Abatement Law except upon written application filed with and approved by the Assessor. Every application shall be on a form prescribed by the Director of the Division of Taxation in the Department of the Treasury of the State of New Jersey. Such form shall be on file in the City of East Orange Tax Assessor's office. The form shall be filed with the Assessor within 30 days, including Saturdays and Sundays, following the completion of the improvement, conversion, alteration or construction. The Assessor shall provide a copy of any completed and approved application for new construction or conversion alteration to the Tax Collector.
(2) 
Every application for exemption for existing structures which does not increase the volume of the structure by more than 30% and which is filed within the time specified shall be approved and allowed by the Assessor to the degree that the application is consistent with the provisions of this article, and provided that the improvements for which the application is made qualifies as an improvement pursuant to the provision of this article. Each such determination by the Assessor shall be made no later than 60 days of the filing of the application. The granting of such exemption shall be recorded and made a permanent part of the official tax records of the City, which record shall contain a notice of the termination date thereof.
(3) 
Each application for new construction or conversion alteration shall also contain the items set forth in § 247-6B.
B. 
Applications for exemptions and abatements on new construction of dwellings, commercial or industrial structures or multiple dwellings pursuant to N.J.S.A. 40A:21-9.
(1) 
Applicants for tax exemption and abatement for new construction of commercial or industrial structures or multiple dwellings shall provide the Assessor with 12 copies of an application setting forth:
(a) 
A general description of a project for which exemption and abatement is sought.
(b) 
A legal description of all real estate necessary for the project.
(c) 
Plans, drawings and other documents as may be required by the City to demonstrate the structure and design of the project.
(d) 
A description of the number, classes and type of employees to be employed at the project site within two years of completion of the project.
(e) 
A statement of the reasons for seeking tax exemption and abatement on the project, and a description of the benefits to be realized by the applicant if a tax agreement is granted.
(f) 
Estimates of the cost of completing such project.
(g) 
A statement showing the real property taxes currently being assessed at the project site; estimated tax payments that would be made annually by the applicant on the project during the period of the agreement; and 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.
(h) 
If the project is a commercial or industrial structure, a description of any lease agreements between the applicant and proposed users of the project, and a history and description of the users' businesses.
(i) 
If the project is a multiple dwelling, a description of the number and types of dwelling units to be provided, a description of the common elements or general common elements, and a statement of the proposed initial rentals or sales prices of the dwelling units according to type and of any rental lease or resale restrictions to apply to the dwellings units respecting low- or moderate-income housing.
(j) 
Such other pertinent information as the governing body may require.
(2) 
The application shall be distributed to and reviewed by the Mayor's Tax Exemption and Abatement Committee, consisting of the City Council Finance Committee, City Administrator, Tax Assessor, Tax Collector, Director of Finance, Director of Policy, Planning and Development, Director of Public Works, Director of Property Maintenance and Corporation Counsel or their designees, within 45 days of receipt thereof.

§ 247-7 Tax agreements for exemptions and abatements on new construction of dwellings, commercial or industrial structures or multiple dwellings.

Upon review, evaluation and approval of an application submitted in accordance with § 247-6B, the City shall enter into written agreements with the applicants for the exemption or exemption and abatement of local real property taxes for construction of commercial or industrial structures or multiple dwellings, or both. The agreement shall provide for the applicant to pay to the City in lieu of full property tax payments an amount annually to be computed by one, but in no case a combination, of the formulas set forth in N.J.S.A. 40A:21-10 and shall comply with the conditions set forth in N.J.S.A. 40A:21-11.

§ 247-8 Termination of agreements.

A. 
Failure to meet qualifying conditions. If during any tax year prior to the termination of the tax agreement the property owner ceases to operate or disposes of the property, or fails to meet the conditions for qualifying, then the tax which would have otherwise been payable for each tax year shall become due and payable from the property owner as if no exemption and abatement had been granted. The City through the Assessor shall notify the property owner and Tax Collector forthwith, and the Tax Collector shall, within 15 days thereof, notify the owner of the property of the amount of taxes due. However, with respect to the disposal of the property, where it is determined that the new owner of the property will continue to use the property pursuant to the conditions which qualified the property, no tax shall be due, the exemption and the abatement shall continue, and the agreement shall remain in effect.
B. 
Termination. At the termination of a tax agreement, a project shall be subject to all applicable real property taxes as provided by state law and regulations and local ordinances, but nothing herein shall prohibit a project, at the termination of an agreement, from qualifying for and receiving the full benefits of any other tax preferences provided by law.

§ 247-9 Assessment of true taxable value and determination of tax due.

The Assessor shall determine, on October 1 of the year following the date of the completion of an improvement, conversion or construction, the true taxable value thereof. Except for projects subject to tax agreement, pursuant to N.J.S.A. 40A:21-9 through 40A:21-12, the amount of tax to be paid for the first full tax year in which the project is completed shall be based on the assessed valuation of the property for the current tax year, minus the amount of the abatement, if any, allowed pursuant to the Five-Year Exemption and Abatement Law and prorated, plus any portion of the assessed valuation of the improvement, conversion or construction not allowed an exemption pursuant to the Five-Year Exemption and Abatement Law, also prorated. Subject to the provisions of this article, the property shall continue to be treated in the appropriate manner for each of the four tax years subsequent to the original determination by the Assessor and shall be prorated for the final tax year in which the exemption or abatement expires.

§ 247-10 Additional improvement, conversion or construction.

This article provides that an additional improvement, conversion or construction completed on a property granted a previous exemption or abatement pursuant to this article and the Five-Year Exemption and Abatement Law during the period in which such previous exemption or abatement is in effect shall be qualified for an exemption, or exemption and abatement, just as if such property had not received a previous exemption or abatement. In such case, the additional improvement, conversion or construction shall be considered as separate for the purposes of calculating exemptions and abatements, pursuant to the Five-Year Exemption and Abatement Law, except that the assessed value of any previous improvement, conversion or construction shall be added to the assessed valuation as it was prior to that improvement, conversion, alteration or construction for the purpose of determining the assessed valuation of the property from which any additional abatement is to be subtracted.

§ 247-11 Ineligibility of property for which property taxes are due.

No exemption or abatement shall be granted or tax agreement entered into pursuant to this article and the Five-Year Exemption and Abatement Law with respect to any property for which property taxes are delinquent or remain unpaid or for which penalties for nonpayment of taxes are due. For purposes of this section, the existence of a tax installment agreement shall not be considered. All taxes, penalties and interest due and owing must be paid in full upon application.

§ 247-12 Applicability of exemption or abatement.

The exemption and abatement of real property taxes provided by the City pursuant to this article and the Five-Year Exemption and Abatement Law shall apply to property taxes levied for municipal purposes, school purposes, county government purposes and for the purposes of funding any other property tax exemptions or abatements.

§ 247-13 Payment of fee.

No application for tax exemption or abatement shall be accepted by the municipality unless accompanied by full payment of the required application fee as designated by the City.

§ 247-14 Conformance with construction, statutory and regulatory requirements.

A. 
All projects subject to tax agreements as provided herein shall be subject to all applicable federal, state and local laws and regulations on pollution control, worker safety, discrimination in employment, housing provision, zoning, planning and building code requirements.
B. 
All improvements, conversions or construction contemplated by this article shall, during construction and at completion, conform with all statutory and municipal requirements relating to construction, land, buildings and the use thereof.
C. 
Failure to comply with Subsections A or B above may be cause for termination of the abatement agreement.

§ 247-15 Effective date of applications.

Applications for exemptions and abatements from taxation may be filed to take initial effect for the first full tax year commencing after the tax year in which this article is adopted and for the tax years thereafter as set forth herein. No application for exemptions or exemptions and abatements shall be filed to take initial effect for the 11th full tax year or thereafter, unless this article is readopted by ordinance of the governing body.

§ 247-16 Amendments; effect.

The Five-Year Exemption and Abatement Law and this article may be amended from time to time. Amendments to same shall not affect any exemption, abatement or tax agreement previously granted and in force prior to the amendment.

§ 247-17 Report of exemptions and abatements.

The City, with the assistance of the Mayor and the Assessor, shall report, on or before October 1 of each year, to the Director of the Division of Local Government Services in the Department of Community Affairs and to the Director of the Division of Taxation in the Department of the Treasury the total amount of real property taxes exempted and the total amount abated within the City in the current tax year for each of the following:
A. 
Improvements of dwellings;
B. 
Construction of dwellings;
C. 
Improvements and conversions of multiple dwellings;
D. 
Improvements of commercial or industrial structures;
E. 
Construction of multiple dwellings under tax agreements; and
F. 
Construction of commercial or industrial structures under tax agreements.

§ 247-18 Notice to property owners in eligible areas.

A. 
The Tax Collector shall include the appropriate notice in the mailing of annual property tax bills to each owner of a dwelling located in an area in which exemptions, or exemptions and abatements, may be allowed pursuant to this article during the first year following the adoption of this article.
B. 
In the case of § 247-17E and F as set forth above, the report shall state instead the total amount of payments made in lieu of taxes according to each formula utilized by the City, and the difference between that total amount and the total amount of real property taxes which would have been paid on the project had the tax agreement not been in effect, for the current tax year.
[Adopted 11-24-2008 by Ord. No. 21-2008[1]]
[1]
Editor's Note: This ordinance was originally adopted as Ch. 248, but was renumbered as Ch. 247, Art. II, to fit onto the organizational structure of the Code.

§ 247-19 Purpose.

[Amended 4-12-2010 by Ord. No. 4-2010]
The purpose of this article is:
A. 
To undertake a detailed, critical and consistent evaluation of all applications for tax exemptions submitted by a qualified urban renewal entity in accordance with N.J.S.A. 40A:20-1 et seq., or a qualified housing sponsor in accordance with N.J.S.A. 55:14K-1 et seq.
B. 
To ensure that, before an application receives an affirmative recommendation from the Mayor's Tax Exemption Review Committee, the applicant will have demonstrated that the project will secure clear social and/or economic benefits for the residents of the City, all in accordance with the Long-Term Tax Exemption Law, as amended (N.J.S.A. 40A:20-1 et seq.), or the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended (N.J.S.A. 55:14K-1 et seq.), the rules promulgated thereunder (N.J.A.C. 5:80-1 et seq.), and all applicable guidelines.
C. 
To set forth the minimal requirements that must be satisfied to obtain an affirmative recommendation from the Mayor's Tax Exemption Review Committee. It also sets forth the procedures to be followed by City officials to evaluate applications and to administer financial agreements after they are approved.

§ 247-20 Definitions.

A. 
The definitions set forth in N.J.S.A. 40A:20-1 et seq. are incorporated herein by reference and shall have the same meaning.
B. 
As used in this article, the following terms shall have the meanings indicated:
AFFORDABLE HOUSING
Housing affordable to persons of low- or moderate-low-income as defined pursuant to the Fair Housing Act, N.J.S.A. 52:27D-301 et seq.
[Added 11-19-2012 by Ord. No. 32-2012]
ANNUAL GROSS REVENUE
The total annual gross rental or carrying charge and other income, including but not limited to state and federal rental subsidies of a housing sponsor from a housing project owned by the applicant seeking a tax exemption pursuant to N.J.S.A. 55:14K-37.
[Amended 4-12-2010 by Ord. No. 4-2010]
APPLICANT
The developer seeking a tax exemption for the construction of a project or, with respect to HMFA-financed housing projects, the improvement thereof.
APPLICATION
All information as the governing body may require to be submitted by an applicant seeking a tax exemption.
CERTIFICATE OF OCCUPANCY
Any certificate issued pursuant to N.J.S.A. 52:27D-133, whether temporary or permanent.
CERTIFIED AUDIT
A complete set of certified financial statements sufficient for the governing body to render an opinion on the applicant's annual financial statements and applicant's ability to complete the project. All audits shall be prepared in a manner consistent with the current standards of the Financial Accounting Standards Board and fully detail all items as required by any applicable law and regulation. The audit shall be certified as conforming with the standards of a certified public accountant who is licensed to practice in the State of New Jersey.
CITY
The Municipal Council of the City of East Orange.
DEVELOPER or SPONSOR or APPLICANT
The person or entity and principals or partners thereof who is seeking or receiving a long-term tax exemption, including an assignment or modification of an existing tax exemption or other modification of tax payment to the City, if any.
FINANCIAL AGREEMENT
The contract between the developer and the City, including all amendments and supplements thereto, by which a tax exemption is conferred and which is consistent with all applicable law and regulation.
GROSS INCOME
Total annual revenue from the project before operating and nonoperating expenses are deducted.
GROSS REVENUE
Annual gross revenue or gross shelter rent or annual gross rents, as appropriate, and other income, for each urban renewal entity designated pursuant to N.J.S.A. 40A:20-1 et seq.
[Added 4-12-2010 by Ord. No. 4-2010]
INCOME
All revenues as determined in accordance with generally accepted accounting principles.
LAW
The Long-Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., or the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended, N.J.S.A. 55:14K-1 et seq.
[Amended 4-12-2010 by Ord. No. 4-2010]
PILOT PAYMENTS
Payments in lieu of taxes on improvements which have been granted after application to the City. Such pilot payments shall run with the land, similar to real estate taxes. Any application for a tax exemption on a project with an existing exemption shall constitute a second term tax exemption.
[Added 11-19-2012 by Ord. No. 32-2012]
PROJECT
The real property and the improvements thereon which are the subject of the financial agreement.
PROPERTY
The real property and any improvements thereon which existed prior to the approval of the tax exemption.
SECOND TERM ABATEMENT
A real property or improvement with an existing abatement in which an applicant is seeking to create abatement and shall be considered a "second term tax exemption" for the purposes of this article.
[Added 11-19-2012 by Ord. No. 32-2012]
TAX EXEMPTION
The substitution of an annual payment for the amount of taxes which would otherwise be due for improvements made to property under conventional property tax law under the provisions of the Long-Term Tax Exemption Law, as amended (N.J.S.A. 40A:20:1 et seq.), or the provisions of the New Jersey Housing and Mortgage Finance Agency Law of 1983, as amended (N.J.S.A. 55:14K-1 et seq.). Conventional property taxes levied on the value of land shall continue to be levied and due.
TOTAL PROJECT COST
A detailed statement of hard and soft costs associated with the project, certified by the developer and presented with the application for tax exemption, that shall include, but not be limited to, any and all estimated and/or actual costs disclosed or to be disclosed to the City's Department of Property Maintenance for the purpose of obtaining permits and/or other approvals. Such statement of total project cost shall be subject to certified audits as set forth herein.

§ 247-21 Mayor's Tax Exemption Review Committee.

[Amended 4-12-2010 by Ord. No. 4-2010]
There is hereby established the Mayor's Tax Exemption Review Committee, consisting of the City Council Finance Committee, City Administrator, Tax Assessor, Tax Collector, Director of Finance, Director of Policy, Planning and Development Director of Public Works, Director of Property Maintenance and Corporation Counsel, or their designees, and any other person the Mayor or the governing body may deem appropriate. The purpose of the Committee is to meet as required to provide review of applications and information to make a recommendation to the Municipal Council as to whether or not an application should be approved or denied in accordance with the standards set forth hereinbelow.

§ 247-22 Application.

[Amended 4-12-2010 by Ord. No. 4-2010]
A. 
Form of application. All qualified applicants, before proceeding with any project, shall provide the City with an application in the manner and form as required by all applicable law and regulation, as may be amended from time to time, and such application shall include, at minimum, the following:
(1) 
An ALTA/ACSM Land Title Survey for the property for which the tax exemption is sought that shall be in accordance with the then-current "Accuracy Standards for Land Title Surveys" ("accuracy standards"), as adopted from time to time by the National Society of Professional Surveyors and the American Land Title Association, and incorporated herein by reference, including, but not limited to, the following:
(a) 
A record description of the property to be surveyed or, in the case of an original survey, the record description of the parent parcel that contains the property to be surveyed. Complete copies of the record description of the property (or, in the case of an original survey, the parent parcel), any record easements benefiting the property; the record easements or servitudes and covenants burdening the property ("record documents"); documents of record referred to in the record documents; and any other documents containing desired appropriate information affecting the property being surveyed and to which the survey shall make reference shall be provided to the surveyor for notation on the plat or map of survey;
(b) 
The name, address, telephone number, and signature of the professional land surveyor who performed the survey, his or her official seal and registration number, the date the survey was completed, the dates of all of the surveyor's revisions and the caption "ALTA/ACSM Land Title Survey";
(c) 
A survey boundary drawn to a convenient scale, with that scale clearly indicated. A graphic scale, shown in feet or meters, or both, shall be included. A North arrow shall be shown and, when practicable, the plat or map of survey shall be oriented so that North is at the top of the drawing. Symbols or abbreviations used shall be identified on the face of the plat or map by use of a legend or other means. If necessary for clarity, supplementary or exaggerated diagrams shall be presented accurately on the plat or map. The plat or map shall be a minimum size of 8 1/2 inches by 11 inches;
(d) 
All data necessary to indicate the mathematical dimensions and relationships of the boundary represented, with angles given directly or by bearings, and with the length and radius of each curve, together with elements necessary to mathematically define each curve. The point of beginning of the surveyor's description shall be shown as well as the remote point of beginning if different. A bearing base shall refer to some well-fixed line so that the bearings may be easily reestablished. The North arrow shall be referenced to its bearing base and, should that bearing base differ from record title, that difference shall be noted;
(e) 
Both the record and measured bearings, angles and distances shall be clearly indicated. If the record description fails to form a mathematically closed figure, the surveyor shall so indicate;
(f) 
Tax Map block and lot numbers, adjoining lot owners, a vicinity map, corresponding street addresses and all current Tax Map information; and
(g) 
Any such other information the governing body shall require.
(2) 
A general statement of the nature of the project, e.g., affordable housing, market rate, commercial, industrial, residential, senior housing, single-family, multiple dwelling, etc.
(a) 
If the project contains commercial or industrial structures, a description of any lease agreement between the applicant and past, present and proposed occupants and a rent roll listing such occupants; or
(b) 
If the project contains dwelling structures, a description detailing the number and types of dwelling units; common elements or general common elements, and a statement of the proposed initial rentals or sales prices of the dwelling units according to type.
(3) 
A statement of the reasons for seeking a tax exemption, and a description of the benefits to be realized by the City if a tax exemption is granted;
(4) 
A statement justifying the requested term or duration of the tax exemption being sought;
(5) 
A detailed description of the improvements to be made to the property, including architectural and site plans, and an estimate of the total cost of the project certified by a qualified architect or engineer;
(6) 
A statement disclosing the uses and sources of capital to be utilized in funding the project, which shall set forth, among other things, pecuniary and ownership interests and obligations associated with such funding sources, certified by the applicant;
(7) 
A fiscal plan and cash flow statement for the project outlining, among other things, purchase price of the site and improvements, detailed mortgage payouts, construction loan payouts, and any other payout associated with the sale and prior owner, the schedule of annual gross revenue, the estimated expenditures for operation and maintenance, payments for interest, amortization of debt and reserves, and payments to the municipality, each such item certified by the applicant;
[Amended 11-19-2012 by Ord. No. 32-2012]
(8) 
A detailed construction and/or improvement schedule indicating the date of project commencement and completion and significant milestones;
(9) 
A statement as to the fair market value of the property as of the date of the filing of the application and a statement of estimated fair market value after completion of the project;
(10) 
A statement of the tax levy on the property for the year in which the application is filed. In the case of tax-exempt property, the projected tax levy shall be stated as if the property had not been tax-exempt;
(11) 
The status of all municipal taxes, fees and charges due and payable to the City arising from or imposed on the property or any other property within the City that is owned by the developer or any principal of the developer or anyone with a pecuniary, ownership or other interest in the project;
(12) 
Disclosure statements as to all parties, including parent and subsidiary companies, having any interest in the property or the project or any other contracts or financial agreements then in force and effect in which any of those parties have any interest;
(13) 
A certification by the developer that construction and/or improvement of the project has not and will not commence prior to the final approval and full execution of the financial agreement, and for projects commencing prior to November 1, 2012, a certification that the developer before proceeding with the project has made a written application to the municipality in compliance with the Long-Term Tax Exemption Law, including N.J.S.A. 40A:20-8;
[Amended 11-19-2012 by Ord. No. 32-2012]
(14) 
The developer's estimate of the number, classes and type of temporary jobs to be created by the project during the term of its construction and the number, classes and type of permanent jobs to be created by the project within one year after its completion. The application shall set forth the project employment plan of the developer and a certification by the developer that such plan complies with the City's employment policy as delineated;
(15) 
A certification by the developer that the project meets the requirements of the laws of this state for consideration for tax exemption. Where those laws require the property to have been declared blighted by the City and a redevelopment plan to have been adopted by the City or to be an area in need of rehabilitation, the developer shall further certify that the proposed project complies with the redevelopment plan as adopted;
(16) 
A certification by the developer that he or she has made diligent inquiry to confirm the accuracy of all information contained in the application and that the information is true and correct to the developer's knowledge. The certification shall contain the original signature of the developer notarized or witnessed. In the case of a corporation, the developer shall submit a notarized corporate resolution, with the seal of the corporation and the signature of the secretary of the corporation, authorizing the signatory to bind the corporation, or similar bona fide evidence of authorization. In the case of a partnership, the developer shall submit a copy of the partnership agreement, certified to be in full force and effect, authorizing the signatory to bind the partnership, or other similar bona fide evidence of authorization;
(17) 
A financial agreement, prepared by the applicant, which shall be presented in such form as required by applicable law and regulation and as approved by the Corporation Counsel;
(18) 
Payment of the applicable nonrefundable fee as set forth in § 247-22C of this article for review of such application; and
(19) 
Such other documents or pertinent information as the Committee deems necessary or appropriate.
B. 
Submission of application. One original and 15 copies of the application shall be submitted to the Director of Policy, Planning and Development, either in person or by certified mail, at his or her office.
C. 
Fee schedule.
(1) 
The review fee shall be equal to:
(a) 
Up to $50,000: 1% of the total cost of improvement.
(b) 
From $50,001 to $150,000: 1.2% of the total cost of improvement.
(c) 
From $150,001 to $300,000: 1.4% of the total cost of improvement.
(d) 
From $300,001 to $500,000: 1.6% of the total cost of improvement.
(e) 
For projects where the total estimated cost of improvement is $500,001 and above: $10,000.
(2) 
As it pertains to § 247-23F(2) and § 247-31, the resubmission fee for conditionally rejected applications shall be 50% of the initial review fee set forth in § 247-22C.
(3) 
The review fee for a second application shall be as set forth in § 247-22C.

§ 247-23 Consideration and recommendation.

A. 
Distribution of application. Upon receipt of the application and payment of all applicable fees, the Director of Policy, Planning and Development shall forward one copy of the application to each member of the Finance Committee, one copy to the City Administrator, Director of Finance, Director of Public Works, Tax Assessor and Tax Collector, two copies to the Corporation Counsel and a copy to any other person the Mayor or the governing body may deem appropriate.
[Amended 4-12-2010 by Ord. No. 4-2010]
B. 
Legal review.
[Amended 4-12-2010 by Ord. No. 4-2010; 11-19-2012 by Ord. No. 32-2012]
(1) 
Within 30 days of receipt of the application from the Director of Policy, Planning and Development, Corporation Counsel shall make a determination as to the completeness and properness of the application. An application shall be deemed complete and proper if it is presented in the proper form, satisfies the requirements of applicable statutes, regulations and ordinances.
(2) 
In those cases where an application is deemed improper, Corporation Counsel shall note the deficiencies to the Mayor's Tax Exemption Review Committee for its consideration.
C. 
General review (Mayor's Tax Exemption Review Committee). Upon receipt of an application, the Director of Policy, Planning and Development shall schedule a meeting of the Mayor's Tax Exemption Review Committee to conduct a complete review of the project application. At his or her discretion, the Director may invite the developer and direct such other City employees or persons deemed necessary or appropriate to assist the Committee in the discharge of its duties. The Director may enlist a professional consultant, in accordance with the applicable law for awarding public contracts, to assist the Committee in its review of the application to determine what annual service charge or escalation is appropriate. In its review, the Committee shall consider the following:
[Amended 4-12-2010 by Ord. No. 4-2010; 11-19-2012 by Ord. No. 32-2012]
(1) 
Whether the project will result in the construction of housing (on all new constructions, the maximum allowable affordable units is 20% and will be determined based on the project financials) or job-generating commercial development on site or off site;
(2) 
Whether the payment of contribution to the City of East Orange is in accordance with the purpose of this article;
(3) 
The taxes and other relevant expenses in other alternative and comparable markets likely to be considered by the developer;
(4) 
A comparison of the estimated amount of the service charge payment due under the tax exemption with the conventional taxes that the City would net, assuming that a project of similar quality and size would likely be constructed by the developer;
(5) 
An estimate of the cost of providing municipal services to the project;
(6) 
The extent to which the project complies with the City's developmental goals as expressed in its zoning ordinances, its master plan and applicable redevelopment plans; and the degree of economic necessity for tax exemption or the extent to which the improvements to the project will enhance the health and welfare of the residents of the City of East Orange;
(7) 
The relative benefits of the project, including the inherent benefit of a project that will construct housing that will improve the customer base for East Orange's business districts and the number of jobs both temporary and permanent likely to be created by the project;
(8) 
The importance of the tax exemption in achieving the timely development of the project and influencing probable occupants to locate to the project;
(9) 
The property assessment and the amount of taxes levied on each block and lot of the real property included within the project in both the year in which the application was filed and the immediately preceding year. In the case of property which is or had been tax-exempt, a calculation will be made of the assessed value and the amount of taxes which would have been levied had the property not been tax-exempt;
(10) 
The current status of payments due for property taxes and/or municipal charges or liens of any type arising from real property included within the project or from any other property owned by the developer;
(11) 
The current status of any financial agreement then in effect to which the developer is a party or a principal thereof is a party;
(12) 
The current status of any fines or payments due from the developer in Municipal Court; payments due for water and/or sewer services provided to the real property included within the project or any other real property owned by the developer or the principals thereof; and payments due for any activity conducted on the real property within the project and on any other property owned by the developer;
(13) 
Whether the developer is a qualified urban renewal entity pursuant to N.J.S.A. 40A:20-5 et seq.; and
(14) 
Whether there are any outstanding property maintenance violations; the amount of all violations of any property owned by either the developer or principal and length of time for the remediation of such violations.
D. 
Application evaluation report. The Mayor's Tax Exemption Review Committee, through the Director of Policy, Planning and Development and the Director of Property Taxation, shall submit a report setting forth its recommendation as to approval or disapproval to the Mayor within 90 days from the date of receipt. The report shall also include a detailed explanation as to the analysis conducted in arriving at the recommendation.
E. 
Mayoral review.
(1) 
Upon receipt of the report from the Mayor's Tax Exemption Review Committee, the Mayor shall review the recommended action to be taken in regard to that application. The Mayor shall determine whether to recommend the approval of the application and its attachments to the Municipal Council or to recommend the rejection of the application as not being in the best interests of the City. Where the application has been deemed improper by the Corporation Counsel, the Mayor shall determine whether the deficiencies can be remedied and, if so, may direct the developer and/or the appropriate municipal official as to the actions required. If the deficiencies cannot be remedied or if the application is deemed not in the best interests of the City, the Mayor may recommend the rejection of the application without condition.
(2) 
In those cases where the Mayor recommends that the developer be afforded the opportunity to correct specific deficiencies, the application may be reconsidered by resubmitting a corrected application to the Director of Policy, Planning and Development, along with any applicable resubmission fees, after which the approval process outlined herein in this section shall be conducted.
(3) 
In those cases where the Mayor recommends rejection of an application without condition and that recommendation has been ratified by the Municipal Council, the rejected application will not be reconsidered and the developer, if so desired, shall reapply to the Director of Policy, Planning and Development by filing a new application and making payment of any applicable fee.
(4) 
The recommendation of the Mayor to the Municipal Council, whether for acceptance or rejection, shall occur within a maximum of 60 calendar days after the date of the receipt of the report.
[Amended 4-12-2010 by Ord. No. 4-2010]
F. 
Municipal Council consideration.
(1) 
No tax exemption shall be approved or financial agreement executed unless the Municipal Council has determined that the tax exemption is in the City's best interest.
(2) 
The Municipal Council may approve, reject or direct the application be returned to the developer for correction or change. An application rejected conditionally may be resubmitted to the Director of Policy, Planning and Development with a resubmission fee. An application rejected unconditionally may only be resubmitted as a new application, with payment of the applicable review fee.
[Amended 4-12-2010 by Ord. No. 4-2010]

§ 247-24 Enabling legislation.

[Amended 4-12-2010 by Ord. No. 4-2010; 11-19-2012 by Ord. No. 32-2012]
If deemed proper and following review by the Mayor's Tax Exemption Review Committee and the Mayor, the Corporation Counsel shall prepare a resolution or ordinance in the form necessary to authorize the long-term tax exemption and attach the form of the proposed financial agreement, subject to such modification as the Corporation Counsel deems appropriate or necessary; and in the case of affordable or senior or special housing projects, approval of the financial agreement and its additional modification is also subject to the approval the New Jersey Housing and Mortgage Finance Agency. The resolution or ordinance shall be signed by the Corporation Counsel as to form and legality and submitted, together with the form of the financial agreement, the original application, the recommendation of the Mayor's Tax Exemption Review Committee and the recommendation of the Mayor, to the Municipal Council for consideration.

§ 247-25 Form of financial agreement.

[Amended 4-12-2010 by Ord. No. 4-2010]
A financial agreement shall be in the form appropriate to the nature of the tax exemption and the nature of the development as submitted to the Mayor's Tax Exemption Review Committee and, with respect to eligible housing projects financed by the New Jersey Housing and Mortgage Finance Agency ("HMFA"), in such form acceptable to the City and HMFA. Such financial agreement shall, at a minimum:
A. 
Identify the property by block, lot and metes and bounds.
B. 
Describe the nature and size of the improvements to be constructed.
C. 
Include a detailed construction schedule which must require the commencement of construction no later than one year from the date the tax exemption is approved.
D. 
Establish a schedule incorporating the annual service or escalation charge in accordance with N.J.S.A. 40A:20-12 et seq., to be paid to the City over the term of the exemption period with a statement that the charge shall not decrease during the term of the tax exemption, notwithstanding any audit(s) of actual gross revenue or project costs indicating a reduction in the actual revenue or costs from that amount estimated in the application, and with respect to eligible housing projects financed by HMFA, such charge may equal an amount not less than 7% and not more than 20% of the annual gross revenue from each housing project situated on such real property for each year of operation thereof following the substantial completion thereof.
E. 
State the duration or term of the financial agreement:
(1) 
The term of the tax exemption for eligible housing projects financed by the HMFA shall not extend beyond the date on which the initial HMFA mortgage is paid in full, which may not exceed 50 years;
(2) 
The term for other tax exemptions shall not be more than 30 years from the completion of the project or each phase thereof.
F. 
Identify the following grounds for termination:
(1) 
With respect to all tax exemptions approved pursuant to this article:
(a) 
Failure to commence or complete construction on schedule;
(b) 
Failure to pay any municipal charges due, including, but not limited to, the service charge;
(c) 
Failure to timely submit certified audits of total project cost or gross revenue and the financial operations of the project;
(d) 
Any other breach of a material condition, in the sole and absolute discretion of the City;
(e) 
Refinance of the initial mortgage agreement as stated in the financial agreement and application;
(f) 
Failure to disclose a change in use of the project during the term of the tax exemption;
(g) 
Failure to disclose additional income derived from any source related to the project;
(h) 
Failure to maintain the habitability of the property in accordance with applicable laws of the City of East Orange and the State of New Jersey;
(i) 
Failure to maintain safe and secured housing in accordance with the City of East Orange regulations which impact the quality-of-life issues;
(j) 
Failure to arrange an annual inspection with the Director of Policy, Planning and Development to conduct interviews with the occupants as to the maintenance of the project;
(k) 
Failure to permit any and all inspections of the project by the City's Property Maintenance Department, the State Department of Community Affairs or the Housing, Mortgage and Finance Agency; or
(l) 
Failure to pay the appropriate amounts due directly to the County.
[Added 11-19-2012 by Ord. No. 32-2012]
(2) 
Additional grounds for termination with respect to tax exemptions approved pursuant to this article for eligible housing projects financed by the HMFA:
(a) 
Failure of the applicant or its successors and assigns and the project to remain subject to the provisions of the N.J.S.A. 55:14K-1 et seq., as amended from time to time;
(b) 
Failure of any successor or assign to the developer in the event of a sale, transfer or conveyance of the project by the developer or a change in the organizational structure of the developer to qualify under N.J.S.A. 55:14K-1 et seq., or any other state law applicable at the time of the assignment of the financial agreement, and to be obligated under the HMFA mortgage.
G. 
Require that any change in the ownership of the project that would materially change the terms of the financial agreement shall be void unless disclosed to and approved by the Municipal Council in advance of such change. A request for a change in ownership shall be accompanied by the payment of 1% of the sales price of the project, which ordinarily shall mean the purchase price stated in the deed.
H. 
Require the developer to submit certified audits of total project cost by the project architect and a certified public accountant, an annual audit of gross revenues and the annual financial operations of the project. In addition, if deemed necessary by the City, require the developer to pay the City costs to reaudit total project cost, annual gross revenue, or financial operations of the project.
I. 
Require the timely submission of certified audits of total project cost or gross revenue and of the annual financial operations of the project.
J. 
Require timely payment of all municipal taxes, administrative fees and other charges arising out of the financial agreement or in any way connected to the affected property.
K. 
Require the developer to execute a project labor agreement which compels the developer to work with the Mayor's Office of Employment and Training in an effort to hire City residents, minorities and women. The form of the project labor agreement, which shall be placed on file in the office of the City Clerk, may be amended from time to time.
[Amended 11-19-2012 by Ord. No. 32-2012]
L. 
State that the term of the tax exemption for the entire project shall commence upon the issuance of a certificate of occupancy for any part or the whole of the project and that the obligation to pay the service charge as estimated in the application, including interest, commences on such date, whether or not the developer receives a bill therefor,
M. 
State that the service charge shall be billed and collected in the same manner as taxes and that any arrearage shall accrue at that rate of interest charged for delinquent real estate taxes.
N. 
State that an annual administrative fee equal to 2% of the service charge shall be levied by the City and collected in the same manner as the service charge.
O. 
Require the payment of a new application fee for any future modifications to the tax exemption or the financial agreement, except as provided for in Subsection R.
P. 
Require that the developer, together with the payment in lieu of taxes, make payment of the maximum annual County fee, whatever it may be during the exemption period, directly to the County.
[Amended 11-19-2012 by Ord. No. 32-2012]
Q. 
State that the City, through the Office of the Tax Assessor, shall conduct a mandatory review (during the exemption period) of the financial agreement and other financial documents, including but not limited to certified audit reports and income pro forma in the first quarter following the fifth year, and every five-year time period from that date, to determine whether the project can remain financially feasible if the payment in lieu of taxes to the City is increased.
R. 
State that the parties agree to modify the financial agreement to increase the amount of the payment in lieu of taxes if it is determined upon review pursuant to Subsection Q that the project can remain financially feasible.
S. 
Include such other terms and conditions as the City or HMFA shall deem appropriate or necessary.

§ 247-26 Execution and distribution of financial agreement.

A. 
Execution of financial agreements. Upon authorization by the Municipal Council, the City Clerk shall circulate five original copies of the financial agreement for execution by all parties. No financial agreement, including financial agreements for HMFA-financed housing projects, shall be considered to be in force and effect unless and until it has been fully executed by the developer and the Mayor and City Clerk.
[Amended 4-12-2010 by Ord. No. 4-2010]
B. 
Distribution of executed financial agreements. Once a financial agreement has been fully executed, the City Clerk shall retain an original and distribute two originals to the developer, one original to the Corporation Counsel, one original to the City Administrator and a copy to the Tax Assessor, the Tax Collector and the Director of Policy, Planning and Development. The City Clerk's executed copy shall be placed on permanent file within that office, where it shall be available for examination by the public during regular business hours.
[Amended 11-19-2012 by Ord. No. 32-2012]

§ 247-27 Oversight and billing.

[Amended 4-12-2010 by Ord. No. 4-2010; 11-19-2012 by Ord. No. 32-2012]
During the construction period, the Director of the Department of Finance, Tax Collector, Compliance Officer and Construction Official shall each be responsible to oversee some aspect of the financial agreement as outlined below.
A. 
Permits and inspection. Upon receipt of an executed financial agreement, the Construction Official shall cause permits to be issued upon application by the developer and shall cause inspections of all work activity to be conducted in the manner provided by the City ordinances. The Construction Official shall notify the Tax Assessor and Director of the Department of Finance of any failure by the developer to properly apply for permits, begin construction or to complete construction within the period set forth in the financial agreement. The Construction Official shall send the Tax Assessor and Director of the Department of Finance a copy of each permit as it is issued.
B. 
Quarterly report to Tax Assessor. From the date of the execution of a financial agreement until the issuance of the permanent certificate of occupancy for the entire project, the Construction Official shall report to the Tax Assessor and Director of the Department of Finance each quarter as to the status of permit and construction activity on the project. Upon the total or partial completion of construction, the Construction Official shall issue a certificate of occupancy in the appropriate form, and shall send a copy of each such certificate to the Tax Assessor and Director of the Department of Finance. The Construction Official in the quarterly reports will incorporate the term "substantially complete" on the certificates of occupancy when the event occurs. In the event the certificate of occupancy is issued for part of a building, the Construction Code Official shall specifically identify that portion of the building affected.
C. 
Assessments and taxes. Upon receipt of a certificate of occupancy for the project or a part thereof, the Tax Assessor shall adjust the assessment status to "exempt" for as much or all of the improvements as are reflected in the certificate. Upon receipt of the certificate of occupancy for the entire project or a part thereof, the Tax Assessor shall exempt the assessment for all improvements covered by the certificate during such time as the financial agreement remains in effect. Land shall remain conventionally taxed throughout the entire term of the financial agreement. At any time that the Tax Assessor causes the assessment on the project to be moved, in whole or in part, from taxable to exempt status, he or she shall immediately and directly notify the Director of the Department of Finance and Tax Collector, in writing, to ensure the prompt commencement of the service charge billing.
D. 
Billing, collection and audit.
(1) 
Upon receipt of a fully executed financial agreement, the Director of the Department of Finance and Tax Collector shall note in their records the execution of the financial agreement and those dates by which construction is to commence and be completed. The Director of the Department of Finance shall thereafter continue to levy conventional taxes and collect payment therefor on the property until the occurrence of the following:
(a) 
In the event that a certificate of occupancy is issued for the entire project or any part thereof, the Tax Collector shall immediately cease to levy or collect taxes on the portion of the assessed value covered by the certificate. The Director of the Department of Finance shall instead bill the developer for the estimated amount of payment in lieu of taxes due as indicated in the application and financial agreement. Taxes on the value of the land shall continue to be levied and collected.
(2) 
Upon the issuance of the final certificate of occupancy for the entire project or any part thereof, the developer shall submit within 30 days to the Director of the Department of Finance: two copies of total project costs certified by the project architect and two copies of an audited statement of total project cost certified by a certified public accountant.
(3) 
The Director of the Department of Finance shall review the certified audit of total project cost and make a determination as to the acceptability of the audit. If the audit is deemed unacceptable by the City, it shall be reaudited by the City with all fees to be paid by the developer. The Director of the Department of Finance shall bill the developer for the cost of the audit. Once the audit is accepted, if its findings cause any change in the basis to be used in the determination of the payment in lieu of taxes, the Director of the Department of Finance shall file a notice of final certified project cost ("notice") with the City Clerk and send a copy to the Corporation Counsel, the Tax Assessor and developer as an addendum to the financial agreement.
(4) 
Upon the filing of the notice, the Director of the Department of Finance shall bill the developer for the cost of the audit and for any adjustments necessitated by the audit. Failure to file the notice, however, shall not bar the collection of the audited service charge.
E. 
Project labor agreement, local contractors and vendors. The Compliance Officer shall monitor compliance with the project labor agreement and establish reasonable procedures with the developer to effectuate the project labor agreement. The City shall maintain a list of local licensed contractors and suppliers, which shall be provided to the developer by the Department of Planning, Policy and Development. The developers shall, in conjunction with other vendors as appropriate, utilize the aforementioned list to engage local vendors and suppliers in their projects.
F. 
Violation of financial agreement. In the event that the developer fails to commence construction or to complete construction within the time required by the financial agreement, or fails to make payments due to the City as required by the financial agreement, or otherwise fails to meet any other material condition of the financial agreement, the Director of the Department of Finance shall notify the Corporation Counsel. The Corporation Counsel shall undertake those steps necessary to terminate the financial agreement and shall advise the Tax Assessor, the Tax Collector and the Director of Policy, Planning and Development of the actions to be taken in regard to the levying and collection of taxes and payments in lieu of taxes. The Corporation Counsel shall prepare such notices or resolutions as are necessary or appropriate to authorize the termination of the financial agreement.

§ 247-28 Administration of agreements after project completion.

After the completion of construction and issuance of the final certificate of occupancy, the project shall continue to operate within the terms of the financial agreement until its termination. The Director of the Department of Finance shall administer the financial agreement throughout this period, according to the following procedures:
A. 
Billing and payment.
(1) 
The Tax Collector shall bill the developer each quarter. If the service charge is calculated as a percentage of project cost, the bill shall reflect both the taxes due on the value of all land included within the project and the service charge payments due on the improvements required by the financial agreement. If the service charge is calculated as a percentage of annual gross revenue, the quarterly bills shall be estimated in an amount equal to the actual amounts due in the previous year. In such case, the developer shall make an additional payment within 90 days after the close of the fiscal year, and such payment shall be the difference between the estimated billing and the adjusted annual service charge, based upon the actual financial performance of the project, including any excess profits due and owing in accordance with N.J.S.A. 40A:20-1 et seq. The additional payment by the developer shall be submitted, along with a certified audit of annual gross revenue calculated under the law and the financial agreement.
(2) 
Regardless of the date of a bill or whether the bill is sent or received, a bill for a service charge shall be deemed to have been issued on the first day of each calendar quarter following the substantial completion of the project and to be due and payable within 30 calendar days thereafter. All payments which are not paid as of the date due shall be subject to the same charges for penalties and interest then in effect for delinquent property taxes.
(3) 
In the event the estimate of the annual service charge exceeds the actual service charge due based upon final total project cost or actual annual gross revenue, the developer shall not be entitled to any credit against any past service charges due and owing, but only a credit, without interest, against subsequent service charges.
(4) 
The Tax Collector or the Director of Finance shall accept all payments and maintain books of account as to each financial agreement. Except where otherwise required by law, the Director of the Department of Finance, in coordination with the Tax Collector, if appropriate, shall apply payments received to amounts due in the following order: amounts due for penalties and interest on taxes; amounts due for payments of taxes; amounts due for penalties and interest for service charge payments; and amounts due for service charge payments. The developer shall make timely payments of taxes and annual service charges directly to the Director of the Department of Finance and/or the Tax Collector, as instructed.
(5) 
In addition to the payment of the annual service charge, all developers shall pay an annual administrative fee to the City. The annual administrative fee shall be 2% of the annual service charge and shall be due no later than December 31 of each year and paid and collected in the same manner as the service charge.
B. 
Annual audits.
(1) 
As required by law or the financial agreement, the developer shall submit an annual certified audit prepared by a certified public accountant of the financial performance of the project. The audit shall be submitted each year within 90 days after the end of the fiscal year of the project to the Director of the Department of Finance, with a copy to the City Clerk and Director of Policy, Planning and Development. In addition to the submission of the annual certified audit, the developer shall submit a statement by a certified public accountant attesting to the percentage of excess profits, if any, pursuant to the provisions of N.J.S.A. 40A:20-15 and 40A:20-16. The Director of the Department of Finance shall review the audit and make a determination as to any required increase in the service charge payment and the payment of the excess profit, if any. The developer shall utilize the City's figures in calculating excess profits.
(2) 
The audit and the determination of the Director of the Department of Finance shall be submitted to the City's designated auditors for their review. If the determination of the Director of the Department of Finance is acceptable, it shall be used as the basis to bill for any increases due and owing. If the determination or the audit is not acceptable, the Director of the Department of Finance shall notify the developer, and the developer shall be responsible to remedy the deficiencies noted and to resubmit a corrected audit for review. As part of this annual audit process, the developer shall be responsible for the payment of all costs incurred by the City to reaudit or review the audit. Such costs will be the actual amount incurred by the City. The cost shall be billed by the Director of the Department of Finance as part of the annual service charge and shall be paid and collected in the same manner as the service charge.
C. 
Noncompliance.
(1) 
During the term of the financial agreement, if the developer fails to comply with the requirements for the submission of audits and/or timely payments of amounts due, the Director of the Department of Finance, in coordination with the Tax Collector, if appropriate, shall enforce the terms of the financial agreement. The enforcement procedures which follow shall not constitute the City's sole or exclusive remedies, but rather shall be used in addition to such other remedies as may be permitted under any law and by the terms of the financial agreement.
(a) 
In the case where any payment due to the City pursuant to the financial agreement, whether arising from real property taxes or service charge payments, audit or administrative fees or water or sewer charges, is in arrears for a period of three months or more, the Director of the Department of Finance shall notify the developer that unless the total amount due, including penalties and interest and subsequent charges, are paid in full within a period of 30 days from the date of the notification, the financial agreement shall be terminated. If the developer fails to comply with such notice, the Director of the Department of Finance shall notify the Corporation Counsel and recommend that a resolution be prepared, if necessary, terminating the financial agreement. The Director of the Department of Finance shall also notify the Tax Collector and Tax Assessor.
(b) 
If a financial agreement is terminated in this manner, the developer shall have 30 calendar days to seek reinstatement of the financial agreement. Reinstatement shall be permitted only if all amounts due and owing have been paid in full within 30 calendar days. In that case, the Director of the Department of Finance shall recommend that the Corporation Counsel prepare a resolution to restore the financial agreement for the remainder of its original term. It shall be the responsibility of the developer to pay a restoration fee to the City.
(2) 
It shall be the responsibility of the City Clerk to file and distribute approved copies of all resolutions or ordinances adopted to rescind or restore financial agreements which arise pursuant to this subsection, doing so in the same manner as set forth in § 247-26B for the original executed financial agreements.
[Amended 4-12-2010 by Ord. No. 4-2010]
(3) 
In the event of any nonpayment, in addition to the above remedies, the developer, in signing the financial agreement, agrees that the City shall have the same rights to place liens and foreclose against the project as though the nonpayment of the service charges were delinquent property taxes.
(4) 
If an audit required to be submitted pursuant to the financial agreement is not submitted when due or is incomplete for three months or more from the date due, the Director of the Department of Finance shall notify the developer that, unless the audit is submitted in proper form within 30 days from the date of notification, the financial agreement shall be terminated. If the developer fails to comply with the requirements of the notice, the Director of the Department of Finance shall request the Corporation Counsel to prepare a resolution terminating the financial agreement and, after its adoption, shall thereafter treat the property as conventionally taxed.
(a) 
If the financial agreement is terminated in this manner, the remaining procedure shall be the same as set forth in Subsection C(1)(a) and (3) above. The City may, however, at its option, choose not to exercise its rights of termination of the financial agreement for failure to submit an audit. Instead, the City may cause an audit to be conducted by qualified personnel under the City's direction and use that audit as the basis for billing as if it had been submitted by the developer. The cost of the audit shall be paid by the developer and billed and collected in the same manner as the service charges. Should the City invoke this option, the City shall not in any way be barred or limited from exercising any other right to terminate the financial agreement at any subsequent time.
(5) 
If the developer fails to comply with any other material provision of the financial agreement, the Director of the Department of Finance shall notify the Corporation Counsel of the defect in the performance of the developer. The Corporation Counsel shall thereupon take those steps necessary to enforce the terms of the financial agreement.
D. 
Revaluation. In the event of a revaluation in the City of East Orange, the Mayor's Tax Exemption Review Committee reserves the right to review all existing financial agreements and modify the terms where applicable to provide the most benefit to the City of East Orange.

§ 247-29 Termination of long-term tax exemptions.

[Amended 4-12-2010 by Ord. No. 4-2010]
All exemptions granted pursuant to the provisions of this article, N.J.S.A. 55:14K-1 et seq. and N.J.S.A. 40A:20-1 et seq. shall terminate at the time prescribed and in accordance with the terms set forth in the financial agreement. Upon the termination of the exemption granted pursuant to the provisions of this article, N.J.S.A. 55:14K-1 et seq. and N.J.S.A. 40A:20-1 et seq., the project, all affected parcels, land and all improvements made thereto shall be assessed and subject to taxation as are other taxable properties in the City. After the date of termination, all restrictions and limitations upon the sponsor or the urban renewal entity shall terminate and be at an end upon the entity's rendering of its final accounting to the City.

§ 247-30 Second term tax exemption.

[Amended 4-12-2010 by Ord. No. 4-2010; 11-19-2012 by Ord. No. 32-2012]
A. 
A second term tax exemption is possible only for affordable housing projects with an existing exemption at the time of adoption of this article, to enable the continued maintenance of existing affordable housing stock in East Orange.
B. 
A second term tax exemption may be granted if necessary for refinancing of an existing affordable housing project, where such an exemption is required by the New Jersey Housing and Mortgage Finance Agency (HMFA) or its successor agency in order for the refinancing to occur. Additionally, a second term tax exemption may be granted if necessary for refinancing of an existing affordable housing project funded with low-income housing tax credits, where such an exemption is required by the lender.
C. 
A second term tax exemption may only be granted with an annual payment structure that is greater than the annual payment structure provided in the first-term tax exemption and if the terms in the aggregate do not exceed the maximum allowed by statute. The term of the exemption shall not exceed the length of the first mortgage created by the second term tax exemption.
D. 
Applications for a second term tax exemption shall be subject to the following criteria:
(1) 
The application must be filed in the same manner as set forth in § 247-22 of this article; with the applicable second term application fee;
(2) 
Applicant must provide an in-depth analysis to the City of East Orange supporting the benefit of granting second term tax exemption;
(3) 
The applicant must prove granting the second term tax exemption will improve the quality of life for the occupants of the project and the quality of life for the City of East Orange;
(4) 
Applicant must not have any building violations during the initial term of the tax exemption; if so, such violation(s) must have been corrected within a reasonable time frame of the occurrence; failure to do so will automatically terminate the request for a second term tax exemption. Reasonable time frame for remediation of building violations shall be determined by the applicable public officer;
(5) 
Applicant must continue to meet the requirements of all applicable state laws, rules and regulations;
(6) 
The application must be submitted before the end of the term of the first tax exemption;
(7) 
Applicant's history of late payments during the initial term of the tax exemption shall be evaluated and may constitute a bar regarding the new application.

§ 247-31 Review of second term tax exemption request.

[Amended 4-12-2010 by Ord. No. 4-2010]
A. 
Upon receipt of the application, the Director of Policy, Planning and Development shall distribute copies in the same manner as set forth in § 247-23A. The Corporation Counsel shall then review the application and make a determination pursuant to § 247-23B. Subsequent to the Corporation Counsel's review, the Mayor's Tax Exemption Review Committee shall have 60 days to review the application in accordance with § 247-23C of this article and, upon arriving at a recommendation, forward a report to the Mayor and governing body. Thereafter, the Mayor shall have a maximum of 60 days to review the report pursuant to § 247-23E. Upon receipt of recommendation from the Mayor, the Municipal Council shall have 45 days to approve or reject the second term tax exemption request or direct that the application be returned to the developer for correction or change. Rejection may be conditional or unconditional. An application that is conditionally rejected may be resubmitted with the applicable resubmission fee. An application that is unconditionally rejected may only be submitted as a new application with payment of the applicable fee.
B. 
The applicant shall not be eligible for additional tax exemptions beyond approval of a second term tax exemption.

§ 247-32 Form of financial agreement for second term tax exemption.

The financial agreement shall be in the appropriate form as provided in § 247-25 of this article.

§ 247-33 Term of second term tax exemption.

[Amended 11-19-2012 by Ord. No. 32-2012]
With respect to tax exemptions pursuant to N.J.S.A. 40A:20-1 et seq., the developer may be eligible for a second term tax exemption which shall not be more than 50 years in aggregate from the date of approval of the first term tax exemption with respect to eligible housing projects financed by the New Jersey Housing and Mortgage Finance Agency ("HMFA"), or another lender.

§ 247-34 Filing.

[Amended 4-12-2010 by Ord. No. 4-2010]
This article shall be kept on file in the office of the City Clerk, with the Director of the Department of Finance and in the office of the Tax Collector. Copies will be made available to the public and to all municipal employees, upon request, for the appropriate fee, if applicable.