Tax breaks mulled to bring new warehouses to redevelopment zone

Google maps The Township Council is considering tax break incentives for two planned warehouses on a 48.8 acre parcel near Montgomery Drive, the last available property in the Southeast Redevelopment Area off Old York Road (Route 539).

Google maps
The Township Council is considering tax break incentives for two planned warehouses on a 48.8 acre parcel near Montgomery Drive, the last available property in the Southeast Redevelopment Area off Old York Road (Route 539).

The Township Council has scheduled a public hearing June 13 on two ordinances that would create tax break incentives for two planned warehouses totaling 401,280 square feet in the Southeast Redevelopment Area off Route 539.

Under the plan, an interior 48.8-acre lot bordering the south side of Montgomery Drive in the Matrix Business Park would be subdivided to build two warehouses. Mayor Dave Fried told the council “a major tire company,” which he declined to identify, would lease a proposed 218,196-square-foot warehouse and Matrix 7A Urban Renewal would build a second 183,084-square-foot facility on speculation.

Fried said the two planned warehouses would be built on the last available piece of property in the 176-acre redevelopment zone between Interstate 195 and Gordon Road, which is within the 434-acre Matrix Business Park.

“This is a property that has stayed dormant for the better part of 20 years and since we declared the area in need of redevelopment we have brought in 2 million square feet (of warehouses) and a massive amount of new ratables,” Fried said.

State law allows municipalities to declare properties that meet certain criteria as areas in need of redevelopment and offer tax incentives to spur economic activity there. One of those economic tools is the Payment in Lieu of Property Taxes (PILOT) program, which is less costly to businesses than paying property taxes.

The proposed PILOT deals for the new warehouses, as well as the PILOT deals already signed with online retailer Amazon and pharmaceutical distributor McKesson, will  generate an average $996,400 a year for the township and an average $607,900 annually for the school district for the next 20 years, township officials said.

The PILOT revenue projections provided by township officials are averaged over a 20-year period and are not what the municipality and school will actually receive in 2014. PILOT revenues, which are tied to varying percentages of taxes otherwise due, start out small in the early years of the agreement and gradually increase.

The Township Council voted 3-0 to accept the PILOT applications for the two new warehouse projects and scheduled a 7:30 p.m., June 13 public hearing and adoption vote on whether to authorize the PILOT agreements. Councilman Vince Calcagno and Dave Boyne were absent.

Boyne, however, submitted a letter that was read into the record by Deputy Municipal Clerk Beth Dupnak. The letter expressed misgivings about the tax breaks and questioned whether it was a better deal for the developer than taxpayers.

“While the law allows a PILOT for redevelopment it does not mandate it,” Boyne’s letter stated. “My vote would have been no based on the very limited information at hand; we need more information to make an informed decision.”

Council President Ron Witt said he had agreed to allow the PILOT proposals to be placed on the May 23 agenda because the council was only introducing the ordinances, not actually authorizing the tax breaks at that time.

“There will be time to exchange more information in the process of moving it forward,” Witt said.

The project plans are detailed in the tax-exemption application filed with the township. The documents show one $15.6 million warehouse totaling 218,196 square feet with 33 loading docks, 50 trailer stalls, and parking for 61 cars. The building would be located where Montgomery Drive meets New Canton Way. The second $13.18 million warehouse totaling 183,084 square feet would be built next door and have 34 loading docks, 32 tractor stalls, and parking for 76 cars.

The land is currently assessed as farmland and generates $634 a year in property tax revenue, according to tax records. Changing the property’s use requires the property owner to pay an estimated $280,000 in one-time farmland rollback taxes, according to Township Economic Development Director Tim McGough.

State law triggers rollback taxes whenever land assessed as farmland, and consequently taxed at a much lower rate, changes to another use. The tax assessor imposes a one-time rollback tax on the property equal to the difference between the amount of taxes paid under the farmland assessment and what the taxes would have otherwise been for the current year and two previous years.

Matrix Senior Vice President Ken Griffin told the Township Council that with all the economic activity occurring in Robbinsville lately the township had become “pretty much the envy of the state right now.”

“There’s not a lot going on in South Jersey, some spotty development in North Jersey, but nothing like what’s going on right here,” Griffin said.

 

 

 


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