Collingswood Mayor Defends 'Old' Zane School Sale, PILOT [Video]

In his video blog, Collingswood Mayor James Maley gives a walking tour of the property and explains the borough perspective on its sale to Kitchen & Associates.

Last week, with local architectural firm of Kitchen & Associates for the sale of the 'Old' Zane School, a building the firm had rented for the past 15 years.

Along with the sale, the municipal government also approved a 10-year PILOT (Payment In Lieu of Taxes) tax abatement for Kitchen & Associates. Under terms of the deal, Kitchen & Associates will pay about 30 percent of the assessed value of the property, ramping up to full assessment by the 2023.

Those conditions brought criticism from a handful of Patch readers last week, including resident Joseph Dinella, who sent along a letter to the editor:

PILOTs are the crack-cocaine of redevelopment. Developers NEED them to make the project work. To be fair, some tax incentive is reasonable to move a project along. But it is never the borough that takes the hit, it is always the schools. And other towns don't then borrow money to complete the project. So taxpayers lose twice: by paying as little more to lessen a corporate tax obligation and by paying debt service for something which is not for public use.

In response, Collingswood Mayor James Maley posted a video blog this week (click above to watch) in which he toured the facility and offered a response to some of those criticisms.

"Some people have already started throwing some stones; it's only been a few days," Maley said in the video. "And the stones they're throwing is that the tax assessment on this property is for $1 million more than what we're selling this property for.

"The sale of this property was based on an appraisal that was done of the property with the rates that we have given to Kitchen 15 years ago," he contined. "They're lower rates, they were intended to be lower rates in order to get them into this space. The appraisal puts this value at $699,000; we're selling it at $800[,000].

"This 800,000 sale will make us just 100,000 shy of recouping all of the 2.1 million that we invested into the rehabilitation of this property," Maley said in the video. "It's taken 15 years, and we are at that point now where we have recouped our money through the rental payments over time, and now with this sale, we're 100,000 shy. 

"The borough looks at this project as one that helps our cash flow moving forward, that repays the debt that we borrowed to do this property; it works for us in every way," he said.

In his video remarks, Maley also said that the PILOT agreement is "a recognition of the work that still has to be done to get this building to be completely and totally a Grade A office building.

"In the meantime...for the last 15 years, we've had a productive office building with 100 people working on the avenue, oriented to our businesses," he said. "This was done back in 1998; it's kind of no little bit of a coincidence that that's when our restaurant renaissance and really things on the Ave. really started coming into play because we had projects like this that brought people into the downtown on a regular, permanent basis."

Click below to read more about the sale of the 'Old' Zane School, reader objections, and our special, two-part examination of the impact of PILOT agreements in the borough:

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MJT530 February 13, 2013 at 08:31 PM
More like "Maley Explains Sale of Old Zane School"
Matt Skoufalos (Editor) February 13, 2013 at 09:31 PM
I get your point re: choice of verbiage; I went this way because the Mayor directly acknowledges the criticism that likely led to the filming of this segment. My take, anyway, but I'm the guy who wrote the explainers of last week.
redrum February 14, 2013 at 01:47 PM
So let me get this straight; the borough lost $100,000 over a 15 year period. Did we receive any taxes during this 15 year period? If not, then we lost alot more than just the $100,000, didn't we? 1998 was the time of a robust economy, also when the "Blunderyard" was getting started (with key politicos <cappelli, leonard, et al> gobbling up said property) and also the time when the town gave huge tax breaks to businesses, and also a time when financial incentives went out to property owners to do away with rental units in order to create a more stable level of "transients" aka "renters" - but now that "he", ooops, I mean the "borough" can't "sucker", ooops I mean "sell" overpriced condos, it seems the only solution is to build MORE apartments, and give MORE tax abatements to rich businesses .... Brilliant ...it seems mayor mccheese's mantra is that all these office people just shop and dine on Haddon Ave
MJT530 February 14, 2013 at 02:32 PM
redrum -So where have you been the past 15 years? How come you haven't been informing the public of such an atrocity? You should have been in front of the Old Zane school with a big old sign letting us all know. What exactly is your point of your post anyway?..Is it that you want to let us know that you dislike the mayor/commissioners and their methods? WE KNOW THAT ALREADY. Please move on.
Aaron Kuhn February 14, 2013 at 06:46 PM
Funny how the Borough can find the time/resources to spend 12 minutes producing a propaganda piece to put on YouTube when their actions are opposed, yet they can't seem find the time to post any Commissioner's meeting minutes past September on their own website (http://www.collingswood.com/node/7944)
gurb February 14, 2013 at 07:04 PM
In 1998, Haddon Ave in collingswood was nothing but low-end thrift stores, vacant buildings, villa barone, and the wawa. Much of the great stuff that is here now was not there in 1998 , or even several years after that. Collingswood's business district was in full bust-mode.
Matt Skoufalos (Editor) February 14, 2013 at 07:12 PM
Aaron, as someone who's at these meetings, I can tell you that there's no opposition when the information is being presented. There's seldom even discussion. That's because the people who voice their concerns in reaction online and in other places don't come forward to speak except in forums like this. I know not everyone can attend a meeting, but they're only held once a month for about 45 minutes, and the same people that read this site get a heads up when they're announced (because I write one in the 5 Things feature). I don't think there's been anyone making use of the public comment portion in the last two months. I do know that at the December or January meeting, I reported on a resident publicly mentioning a concern that the documentation is not more immediately available electronically. The commissioners all acknowledged that they would work to rectify that, so even if you don't want to give them the benefit of the doubt, at least it's nominally on their radar. At the same time, I wrote two relatively substantial stories on this subject last week (mentioned above), and they were accessed about half as often as was the initial report on the sale of the property. I don't have a stake in this because I'm not a Collingswood taxpayer. But the line from borough leadership has always been "write/call us if you want to have a discussion," so objectively, I don't buy the surprise/propaganda argument.
Aaron Kuhn February 14, 2013 at 07:17 PM
Nor am I a Collingswood tax payer. Point being it seems awfully strange that they'd produce a 12 minute video clip on a highly controversial topic (I checked their YouTube channel, no other recent things of this length) without first having some reasons to do so. They can't get their act together to put some PDF files up on the web of public meeting records (as uninteresting, and as unattended/unexciting as I know they are), but they took the time to make this
Matt Skoufalos (Editor) February 14, 2013 at 07:25 PM
I don't see them as the same thing, but I completely understand your perspective.
MJT530 February 14, 2013 at 08:20 PM
I have to agree with Matt here. I am a taxpayer, and I attend the meetings, and I read the patch, and I know I can email the mayor/commissioners or call/stop by for a talk. I could even go to the library if I didn't have internet at home. The point trying to be made doesn't hold much water. The points that should be made is that the Boro is either lazy or doesn't have the manpower to do what they should and the Aaron is lazy in obtaining the information he wants. Its there...go for it. Why waste time complaining about something that doesn't warrant a complaint.
redrum February 14, 2013 at 08:24 PM
umm, the interwebs didn't things like The Patch back then....How long have you been involved in changing anything your own self? the point of my post is to question just how much the town lost in that deal. Am I not allowed to state my disagreement with how they play pass the buck? You tell me to "MOVE ON" yet the same crap keeps happening again and again - why don't I do anything ? Because it's too late, this country has gone over the socialist cliff, that's why
MJT530 February 14, 2013 at 08:40 PM
redrum - Excuses...they had things like newspapers. Its too late to do anything but yet things keep happening. You make no sense. If you don't like it here...there is the door. I won't let it hit you in the keester on your way to wherever you think is better than good old Collingswood.
Porterincollingswood February 14, 2013 at 08:48 PM
Why waste your time? His stuff is clearly agenda-driven, you can tell by his most recent nonsense-post and the way he closes it (on a day the Dow continues to hover around 14,000...Lenin would be proud). Here's what's happened - a bunch of people who love to whine and complain about the borough needing to get out of the real estate business...are whining and complaining about the borough getting out of the real estate business. Because this is 100% personal with them. FUN FACT: This deal was founded on the very pro-business, trickle-down philosophies they criticize Obama for NOT employing. We're left to marvel at both sets of contradictions.
redrum February 14, 2013 at 10:30 PM
mjt - just because I don't believe in liberal politics doesn't mean I don't enjoy Colls. Its the fact that I have to pay higher taxes so businesses can get tax breaks. the mayor uses the same excuse again and again that somehow he created all those jobs all by himself, and that all those workers spend all their money in Collingswood and nowhere else; and that all that revenue more than made up for the taxes that were never charged or collected. So I put it to you again, did Kitchen and Assoc. pay ANY taxes during those 15 years? I pay $7,200 for a property worth $225,000. Multiply that by 15 years and you get $10,800 in taxes. That's alot of money. What if the town had sold the property, a company came in, tore it down, and built a modern day office building or apartments?
MJT530 February 14, 2013 at 10:52 PM
Thanks @ porterincollingswood
Interested Bystander February 17, 2013 at 12:14 PM
??...nobody who rents ever pays taxes, so what's the beef? The town took over the building and owned it - you don't pay taxes to yourself.


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