Code Violations At Newark Buildings May Inspire New Tax Rule

NEWARK, NJ — Broken elevators, air conditioning and heating malfunctions and “repeated code violations” at some Newark apartment buildings have caught the eye of the municipal council. And it may result in a new ordinance aimed at holding their owners responsible, a councilwoman says.

Some local building owners that have gotten payment in lieu of taxes (PILOT) agreements have been dropping the ball when it comes to upkeeping their properties, councilwoman LaMonica McIver charged.

And according to McIver, it may be time to hold their feet to the fire.

That’s what a new ordinance introduced last week in the council would do, she says. If it survives a public hearing and second reading, the amendment would include “building maintenance” as a material condition to any financial agreement between the city and developers.

If a developer fails to uphold their end of the deal, the city would be able to revoke its tax exemption.

McIver released the following statement about the proposed amendment on Thursday:

“The municipal council has become aware that some owners who are in receipt of long-term tax exemptions are failing to properly maintain their properties for reasons that include, but are not limited to, repairing or replacing broken elevators; repairing or replacing broken heating and air conditioning units or systems; providing inadequate heat and air condition for commercial and residential tenants in violation of state and local laws and regulations; and remediating consistent and repeated building code violations.”

“This is a first step towards holding developers and owners accountable who have received long-term tax exemptions and are delinquent in making their payment in lieu of taxes,” McIver said.

“This is resulting in the lowering of property values, tax revenue shortfalls, and is placing an undue tax burden on those taxpayers who timely pay their taxes as they are forced to shoulder the burden of those owners who have received a tax break,” McIver added.

PILOT agreements – also known as municipal tax abatements – are deals that enables a developer to switch their standard tax payments for a property with a fixed, yearly payment to the municipality.

Some municipal officials have called PILOT agreements useful tools to attract development to distressed or blighted areas of town. But their use has drawn criticism from opponents, some who caution that the deals can enable a big developer to skip out on paying their fair portion of property taxes. Learn more about PILOT agreements here.

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