A climate of cronyism
The Local Redevelopment and Housing Law allows New Jersey cities to incentivize development that otherwise wouldn’t be profitable for a developer to build. These incentives or financial agreements are most commonly known as tax abatements and PILOTs (payment in lieu of taxes). Tax abatements and PILOTs were designed with the intention that cities could incentivize (through tax breaks) the types of development they may have grown deficient in over the years.
Under Mayor Davis, A total of 27 financial agreements, most of which are of the long-term 25-30yr variety, have been approved on building residential redevelopments. When you breakdown these financial agreements, the consistent focus of the Davis administration has not been on incentivizing our true deficiencies such as business or luring any type of industry to Bayonne but rather on the developers (that pumped large sums of money into his reelection account) to build more and more residential redevelopments.
Whether it’s solar, wind, or tech, agreements incentivizing our deficiencies would create jobs and organically grow the median household income needed to attract the likes of Starbucks, Whole Foods, and other places where people with disposable income would prefer to shop. In addition, these types of developments would have little to no impact on our education system, municipal services, and infrastructure. But that’s not the type of business these local developers are interested in because the profit margin isn’t as high and so they keep pumping money into the mayor’s reelection account and the mayor keeps approving what they want.
Now Mayor Davis, those developers, select realtors, and their attorneys will tell you granting these financial agreements are necessary. They now cite the debt and annual operating deficit as a serious problem and tout that by creating new ratables, the city can help to address our deficit in hopes to one day stabilize taxes. However, the law governing these financial agreements was not designed for that and they know it.
The fact is PILOTs shift the tax burden among regional and local taxpayers. Governing bodies set tax rates to provide a certain level of revenue for operating expenses. Upon approval, these properties are exempt from a large percentage of taxes. Therefore, any necessary revenue must be obtained from the remaining tax base. So while you may not see a larger tax increase from the city, the county and education tax must increase. Additionally, these properties are unaffected by the upcoming city-wide property tax reevaluation and getting back to the annual operating deficit; who is going to pay those annual tax increases for the next thirty years or until taxes are stabilized? You and I.
In closing, I’ve never been a fan of the mayor or his administration because I’m a fan of telling it like it is. I do my research, offer insight based on facts, while they continue to mislead the public with political talking points and rhetoric. Giving corporate welfare to wealthy developers to build more of what we don’t need might make Bayonne more affordable by the time I retire but I’m only 34 and have a long way to go. In this climate of cronyism where the mayor exchanges these approvals for campaign donations, there are only a select few that benefit. Meanwhile, the rest of us will need actual welfare benefits if we can still afford to live here.
Video below shows Bayonne Resident Peter Franco confronting Councilman Cotter on Developer’s Donations.
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