by Hannan Adely
(HACKENSACK) - The City Council is taking steps to approve parking and financial agreements to make it easier for a North Jersey developer to build a 222-unit apartment building downtown.
The council introduced ordinances on Tuesday night to designate Meridia Metro Urban Renewal as the redeveloper of a portion of State Street and to allow a payment-in-lieu-of-taxes agreement and parking lease for the project, to be called Meridia State. City officials say the incentives are needed to make it viable and to pave the way for the first development in a part of downtown that the council has marked for rehabilitation.
Meridia, a subsidiary of Capodagli Property Co. of Pequannock, plans to construct a six-story building including a ground-floor garage with 141 spots and five floors of one- and two-bedroom apartments. The project, between Warren and Bergen streets, will cost an estimated $19.2 million.
One ordinance would name Meridia as the redeveloper for 90 days, during which the company and city can negotiate a redevelopment agreement.
The council is also weighing a change to the city’s code to allow the leasing of municipal parking lots and garages, and to approve one such agreement with Meridia. Under the agreement, the developer would lease 120 non-assigned parking spaces in the Atlantic Street Parking Garage for its residents at a cost of $64,800 annually for the first five years, with increases in years to follow.
Another proposed ordinance would offer a 30-year tax abatement on the State Street property.
For the first six years, the developer would pay either $1,200 per unit for a total of $266,400, or 2 percent of the total project cost, whichever is greater.
The payment would increase incrementally over the remaining years of the agreement.
In Years 7 to 11, the developer would pay the greatest among those two options and a third option — 20 percent of the property taxes that otherwise would have to be paid. In subsequent years, the third option would grow to 40 percent, then 60 percent, then 80 percent in the final eight years.
If the City Council approves the tax abatement agreement, as expected, it will go to the state Department of Community Affairs for final authorization.
The city now gets less than $80,000 in taxes for the properties in the State Street redevelopment area, said City Manager Stephen Lo Iacono. All the properties have been bought by Meridia, which is preparing to build soon.
On its application, the developer estimates that construction could start in June if approvals are in place by then, and would run until January 2015.
Meridia would be the first project to break ground since the city adopted its Downtown Rehabilitation Plan in June. The plan eased zoning, parking and other restrictions in a 39-block area known as the Main Street corridor to make it easier for developers to build downtown.
Last month, the council designated part of State Street as an “area in need of redevelopment” to allow a mixed-use project with up to 230 residential units.
Council members said they were willing to offer incentives and to compromise on taxes in a bid to transform the run-down block.
“We want to spark redevelopment,” Mayor Michael Melfi said. “This person is willing to take a chance and develop in this area.”
Councilwoman Karen Sasso said she hoped it would build momentum for all of the city’s Main Street corridor.
“Once this gets built and completed,” she said, “I think more people will come in here over time and look to make an investment in the community.”
You must be logged in to post a comment.