[Adopted 12-29-2004 by Ord. No. 04-36;
amended in its entirety 4-21-2014 by Ord. No. 14-05]
This article is enacted pursuant to the Five-Year Exemption
and Abatement Law, N.J.S.A. 40A:21-1, et seq.
The City adopted the Main Street Redevelopment Area and delineated
the same in Ordinance No. 02-03. A central purpose of declaring this
area as to be a redevelopment zone was to encourage, stimulate and
foster the revitalization of the City's downtown. The redevelopment
zone designation permits many opportunities for public redevelopment
assistance, including tax credit funded projects which are entitled
to payment in lieu of tax (or PILOT) agreements. Equally important
to the success of the downtown revitalization effort is privately
funded redevelopment projects. There are numerous historic buildings
in this area, many of which are mixed business and residential structures
that are in need of substantial repair, renovation and improvement.
The City desires to employ all means possible to preserve these structures,
and to encourage private investment to reuse, modernize, rehabilitate,
renovate and repair these structures. Pursuant to N.J.S.A. 40A:12A-14,
the City Council passed Resolution 13-152 designating the entire City
of Salem as a rehabilitation zone. The purpose of this article is
to authorize the City Council to approve tax exemptions and abatements
for such projects to the maximum extent permitted by law under the
Five-Year Exemption and Abatement Law.
As used in this article, the following terms shall have the
following meanings unless the context clearly indicates that a different
meaning is intended:
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.
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
The provision of a commercial or industrial structure, a
new dwelling, or multiple dwelling, or the enlargement of the volume
of any such structure by more than 30%. However, it shall not mean
the conversion of an existing building or structure to another use.
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.
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 contractor's
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.
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.
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.
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.
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.
A.
Pursuant to the authorization contained in the Five-Year Exemption
and Abatement Law, N.J.S.A. 40A:21-1 et seq., and subject to the limitations
contained therein, the City of Salem hereby authorizes five-year exemption
and abatement programs for improvements to and/or the conversion,
alteration or construction of commercial and industrial structures,
dwellings and/or multiple dwellings within the entire City of Salem
which, pursuant to Resolution 13-152, was declared a rehabilitation
zone pursuant to N.J.S.A. 40A:12A-14.
B.
Exemptions/abatements hereunder shall be authorized on an individual
basis after review, evaluation, and approval by the Tax Assessor and
the City Council.
Applicants shall provide the following information:
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 governing
body 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
dwelling units respecting low- or moderate-income housing.
J.
Such other pertinent information as the governing body may require.
A.
The City may enter into a written agreement with the applicant for
the exemption and abatement of real property taxes upon the adoption
of an ordinance authorizing a tax agreement for a particular project.
B.
All tax agreements entered into by the City pursuant to N.J.S.A.
40A:21-9 through 40A:21-12 shall be in effect for no more than the
five full years next following the date of completion of the project.
C.
Within 30 days after the execution of a tax agreement, the City Clerk
shall forward a copy of the agreement to the Director of the Division
of Local Government Services in the Department of Community Affairs.
No exemption and abatement shall be granted except upon written
application filed with and approved by the Tax Assessor. Every application
shall be on a form prescribed by the Director of the Division of Taxation
in the Department of the Treasury, and provided for use by the governing
body of the City. It shall be filed with the Tax Assessor within 30
days following the completion of the construction, conversion, alteration
or improvement.
This article shall be effective June 1, 2014, and, in accordance
with N.J.S.A. 40A:21-4, no applications for exemptions or abatements
shall be filed for exemptions or abatements to take initial effect
on or after June 1, 2024, unless this article is readopted by the
City Council.
