Ocean City, NJ
Cape May County
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Table of Contents
Table of Contents
[Ord. #10-02, § 1]
This chapter is enacted pursuant to the Five-Year Exemption and Abatement Law, N.J.S.A. 40A:21-1 et seq.
The Governing Body of the City of Ocean City finds and declares that there are areas within the City in need of rehabilitation. Through a comprehensive review process of private investment within both Ocean City and municipalities across the State, the City finds a tax abatement program will provide the necessary incentive for rehabilitation within areas threatened by economic stagnation. It is the intent and purpose of this chapter to permit the City the greatest flexibility possible within the constitutional limitations to address problems of weakened investment and the potential for decline. (Ord. 10-02, § 1
[Ord. #10-02, § 1]
As used in this chapter, the following terms shall have the following meanings unless the context clearly indicates that a different meaning is intended:
ABATEMENT
Shall mean 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
Shall mean 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. where more than half (1/2) of the housing stock in the delineated area is at least fifty (50) years old and a program of rehabilitation may be expected to prevent further deterioration and promote the overall development of the community.
ASSESSOR
Shall mean the officer of the City of Ocean City charged with the duty of assessing real property for the purpose of general taxation.
COMMERCIAL STRUCTURE
Shall mean a structure or part thereof that must be used for commercial purposes. The Governing Body must determine that said structure will tend to maintain or provide gainful employment within the City, assist in the economic development of the City, maintain or increase the tax base of the City, and maintain or diversify or expand commerce within the City include any structure, or part thereof, used or to be used by any business relocated from another qualifying municipality.
COMPLETION
Shall mean substantially ready for the intended use for which a building or structure is constructed, improved or converted.
DWELLING
Shall mean any room or group of rooms located within a dwelling forming a single habitable unit with facilities that are used or intended to be used for living, sleeping, cooking, eating, and sanitation by one (1) family or household unit.
EXEMPTION
Shall mean the portion of the Assessor's full and true value of any improvement or construction not regarded as increasing the taxable value of a property pursuant to this Chapter and the Five-Year Exemption and Abatement Law, L. 1991, c. 441.
IMPROVEMENT
Shall mean a modernization, rehabilitation, renovation, alteration or repair that 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.
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
REHABILITATION
Shall mean an undertaking, by means of repair, reconstruction, alteration, addition or renovation of existing structures in any area that has been determined to be in need of rehabilitation as defined herein.
REHABILITATION AREA
See definition of Area in Need of Rehabilitation.
[Ord. #10-02, § 1; Ord. #10-10, § 1]
The area in need of rehabilitation encompasses the entire Historic District, the entire Central Business Zone and the entire Central Business-1 Zone according to the Ocean City Zoning Map. This delineated area meets the conditions for determination of need for rehabilitation pursuant to N.J.S.A. 40A:21-1 et seq.
[Ord. #10-02, § 1; Ord. #10-10, § 2]
a. 
The exemption shall only apply to rehabilitation to the following buildings located within the area in need of rehabilitation as defined by subsection 31-1.4.
1. 
Residential Dwellings. The City determines to provide for the exemption from taxation the improvements to all residential dwellings in the Historic District. If the improvement results in a change in status from a key or contributing to a noncontributing structure as determined by the Historic Preservation Commission, it is not eligible to receive the abatement.
2. 
Commercial Structures in the Historic District. The City determines to provide for the exemption from taxation the improvements to commercial and mixed use structures in the Historic District.
3. 
Commercial Structures in the Central Business and Central Business-1 Zones. The City determines to provide for the exemption from taxation the improvements to commercial and mixed use structures in the Central Business and Central Business-I Zones. The exemption for mixed use structures is limited to those structures meeting the definition of mixed use in subsection 25-205.1.2 and subsection 25-205.1A.2, "Permitted Uses." With any improvement or construction in the Central Business and Central Business-1 Zones, the total square footage to be used for commercial purposes on the site cannot decrease.
b. 
The exemption shall be granted for a five-year period, during which time the taxable value of the property shall not increase by the value of the improvement, notwithstanding that the value of the property to which the improvement is 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 improvement unless there is damage to the structure through action of the elements sufficient to warrant a reduction.
[Ord. #10-02, § 1]
The following procedure shall govern applications for tax exemptions for improvements within the City of Ocean City:
a. 
An application for exemption for improvements set forth in this Chapter shall be made to the Assessor, with a copy provided to the Mayor and the City Clerk. Every application for exemption shall be filed with the Assessor within thirty (30) calendar days following the completion of the improvement.
b. 
Every properly completed final application for exemption shall be evaluated for approval by the Assessor within thirty (30) days of filing. Based on the provisions of N.J.S.A. 40A:21-1 et seq., the Assessor shall notify the Governing Body in writing of the approval determination. Upon receipt of the written approval from the Assessor the appropriate City officials shall then proceed to execute the tax abatement agreement previously authorized by the specific ordinance adopted as part of the preliminary application approval process. The applicant shall be required to sign this tax abatement agreement prior to the City signatories.
c. 
The granting of exemption shall be recorded and made part of the official tax records of the taxing district, which records shall contain a notice of the termination date thereof.
d. 
Within thirty (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.
[Ord. #10-02, § 1]
Applicants for tax exemption for improvements of commercial structures or residential dwellings 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 (2) years of completion of the project, if applicable.
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 structure, descriptions 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.
[Ord. #10-02, § 1]
The Governing Body 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. The agreement shall provide for the applicant to pay to the City in lieu of full property tax payments an amount annually based on the tax phase-in approach, which shall be an amount equal to a percentage of taxes otherwise due according to the following schedule:
a. 
In the first full tax year after completion, no payment in lieu of taxes otherwise due.
b. 
In the second tax year, an amount not less than twenty (20%) percent of taxes otherwise due.
c. 
In the third tax year, an amount not less than forty (40%) percent of taxes otherwise due.
d. 
In the fourth tax year, an amount not less than sixty (60%) percent of taxes otherwise due.
e. 
In the fifth tax year, an amount not less than eighty (80%) percent of taxes otherwise due.
[Ord. #10-02, § 1]
The Assessor shall determine, on October 1 of the year following the date of the completion of an improvement 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 following completion shall be based on the assessed valuation of the property for the previous year, minus the amount of the abatement, if any, allowed pursuant to this Chapter, plus any portion of the assessed valuation of the improvement, conversion or construction not allowed an exemption pursuant to this Chapter. Subject to the provisions of this chapter, the property shall continue to be treated in the appropriate manner for each of the five (5) full tax years subsequent to the original determination by the Assessor.
[Ord. #10-02, § 1]
a. 
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 (5) full tax years next following the date of completion of the project.
b. 
All projects subject to a tax agreement 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 provisions, zoning, planning and building code requirements.
c. 
That percentage which the payment in lieu of taxes for a property bears to the property tax which would have been paid had an abatement not been granted for the property under the agreement shall be applied to the valuation of the property to determine the reduced valuation of the property to be included in the valuation of the municipality for determining equalization for County tax apportionment and school aid during the term of the tax agreements covering the properties, and at the termination of an agreement for a property, the reduced valuation procedure required under this section shall no longer apply.
[Ord. #10-02, § 1]
a. 
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 Assessor of the City shall notify the property owner and Tax Collector forthwith, and the Tax Collector shall, within fifteen (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. 
At the termination of a tax agreement, a project shall be subject to all applicable real property taxes as provided by State law and regulation and local ordinance; 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.
[Ord. #10-02, § 1]
This Chapter provides that an additional improvement completed on a property granted a previous exemption or abatement pursuant to this Chapter 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 this Chapter, 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.
[Ord. #10-02, § 1]
No exemption or abatement shall be granted or tax agreement entered into pursuant to this Chapter 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.
[Ord. #10-02, § 1]
The City Tax Collector shall include a notice describing the exemption and abatement program provided for by this Chapter and the application procedure therefore in the mailing of annual property tax bills to each owner of property located in the area in need of rehabilitation as defined by this Chapter.