The Livingston Township Council passed an ordinance to set standards for filming in town, and introduced several other ordinances during its Wednesday, March 12, meeting. One of the ordinances would approve a long term tax exemption for a property to be developed along South Livingston Avenue.
At the start of the meeting, the Council honored the Livingston High School girls’fencing team for winning the NJSIAA state championship.
Film Ready
An ordinance was passed to amend the township’s “Film Ready” standards for motion picture filming in Livingston. The changes would now permit filming on Sunday, allow start times an hour earlier at 7 a.m., and end an hour later at 9 p.m. with crew wrap at 10 p.m.Additionally, a “major motion picture,” previously defined as a film with a budget of at least $5 million, now must have a budget of at least $20 million.
Council members noted that they hoped these changes will facilitate more filming in town, specifically noting that Netflix is building a mega studio in Monmouth County.
Cap Bank
Another ordinance was passed for the township to exceed the municipal budget appropriation limits and establish a cap bank. Per local government cap law, a municipality shall limit any increase in the budget up to 2.5 percent, unless authorized by ordinance to increase it to 3.5 percent over the previous year’s final appropriations.
TheTownship Council determined that a 3.5 percent increase in the budget, amounting to $423,428.50 in excess of the increase in final appropriations otherwise permitted by cap law, was necessary. The total amount of the 3.5 percent increase year over year would be $1,481,999.76.
Long Term Tax Exemption The Council introduced an ordinance to authorize a financial agreement and approve a long term tax exemption with 45 Partners Urban Renewal. A related resolution was also passed during the meeting to approve the redevelopment agreement for the property. Deputy Mayor Shawn Klein recused himself from this vote.
The agreement covers block 3700, lots 28, 29, and 30 on the township’s tax maps, commonly known as 19 and 45 South Livingston Avenue. A five-story residential building is expected to be constructed, which will include 226 residential units, of which 14 units shall be designated as special needs housing (which shall count as 17 bedrooms of affordable housing contained within 14 physical units). An additional 17 units shall be designated as affordable housing units. A connected one story retail building of approximately 17,985 square feet will also be included, as well as approximately 494 parking spaces. Indoor and outdoor amenities are expected to include entertainment lounges, a fitness center, private meeting rooms, a pool with lounge seating, outdoor bar area, grilling stations, and dining areas.
According to the terms of the agreement, 45 Partners Urban Renewal will pay an annual service charge, the amount of which changes through multiple stages over up to 30 years of the agreement. In stage one, which covers the first five years of the agreement, the company must pay the town the greater of either the minimum annual service charge or 11.5 percent of the annual gross revenues (AGR). The minimum annual service charge amounts to the land taxes levied against the project site in the last full tax year in which the project site was subject to taxation. By the final stage, which begins 24 years after the agreement commences, the annual amount owed to the town will be the greatest of the minimum annual service charge; 15 percent of the AGR; or 80 percent of the amount of the taxes otherwise due on the value of the project site and the improvements.
In year one, the estimated annual gross revenue of the PILOT (payment in lieu of taxes, colloquial term for a long term tax exemption), is $1,173,509. That figure increases each year until it is listed as $2,815,059 in year 30, according to an exhibit attached to the ordinance.
Language in the ordinance notes that the Council determined that the benefits of the agreement outweigh the costs associated with it.
“I believe the project is a desirable and beneficial improvement in the township and that the use of the Long Term Tax Exemption Law will further the township in advancing the development in the Township,” township manager Barry Lewis wrote in a letter to township clerk Carolyn Mazzucco regarding the application for the tax exemption. The applicant anticipates approximately 200 full-time equivalent construction jobs over the duration of the construction of the project, as well as approximately ten full-time permanent jobs in connection with the operation of the project, as well as creating new and diverse housing opportunities. Therefore, I recommend that the application be favorably considered by the Township Council for the applicant, provided that all legal prerequisites have been met.”
In detailing the reasoning behind the introducing ordinance, Lewis noted that the township needed to better explain why granting a long term tax exemption is a beneficial decision for the community.
“We have, collectively, come to the understanding that we need to do a better job of communicating with the public about what this process is, what it means, and why it is, ultimately, beneficial,” Lewis said. “What the public needs to understand is if the project doesn’t go forward, we are left with what we have, which is a fraction of the revenue in taxes than what would be generated from the financial agreement.”
He noted that PILOT is a tool to facilitate the redevelopment of properties. In its current state, the property is not able to collect as much taxes for the town as it would if it were built up.
“We are hesitant to grant any tax relief unless it’s warranted and it’s justified to achieve a public purpose in redeveloping the property,” Lewis said. “We take this very seriously. We do a lot of due diligence.”
Through meetings between the developer and the township’s lawyers, along with Council representatives Ketan Bhuptani and Al Anthony, the amount owed to the town over the life of the PILOT ultimately increased from $46 million to $58 million.
“Just the negotiation process alone yielded more than $12 million,” Lewis said. He added that, if nothing were to be built there, the difference in what is generated for the town over the life of the PILOT would be over $40 million. A PILOT also limits the developer in their profits over the course of the agreement, as excess profits would be turned over to the town, he said.
Lewis said township officials also compared numbers to the ParkVue apartments and other similar complexes in town to estimate the ultimate assessment of the property once it is completed. ParkVue – which Lewis said is nearly identical in the number of units and rental cost to this project – is assessed at roughly $60 million. Even if this new project was ultimately assessed much higher at $95 million, the PILOT would still generate more revenue for the town over the agreement’s lifetime. This is, in part, because only five cents of every dollar goes to the county with a PILOT, compared to 21 cents of every dollar with regular property taxes.
“The subsidy to making the project viable is essentially being borne by the county,” Lewis said.
The developer is also making a $500,000 Community Benefit Payment, a financial contribution for the township to use for various community improvements.
The second hearing on this will be held during the April 7 meeting.
Special Events
An ordinance was introduced to adopt a new chapter of the township code related to special events. The second hearing on this will be held during the April 7 meeting.
Food and Beverage Licensing An ordinance was introduced to amend chapter 146 of the township code, titled “Food and Beverage Article 1 Licensing.” Changes would be made to certain fees, specifically, adding a $50 late fee to licenses that are not renewed on time.Afee of $275 for 100 to 200 people and $375 for over 200 people will also be applied to license renewals.
The second hearing on this will be held during the April 7 meeting.
Health Department Fees
An ordinance was introduced to lower fees for flu immunizations issued by the health department.All fees would be $10, down from $20. The second hearing on this will be held during the April 7 meeting.
Water Meters
An ordinance was introduced to change chapter 316 of the township code, “Water, Article 1, Meters and Meter Use Charges.” The change would increase the charge of a water meter to the sum of the cost of the meter and associated parts, plus 30 percent of that total cost. Previously, the upcharge was 20 percent.
The second hearing on this will be held during the April 7 meeting.
Sewer Rates
An ordinance was introduced to commence annual increases to the sewer rate by amending chapter 251 of the township code, “Sewers,Article II, Fees and Charges.” The changes are due to the increases in operating and capital costs. The per quarter amount will increase by set amounts in 2025, 2026, and 2027. Beginning in 2028, the township’s water engineer and the Chief Financial Officer will make increases to the rates consistent with cost of living changes.
The second hearing on this will be held during the April 7 meeting.
