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:
- 'Old' Zane School Sold to Kitchen & Associates
- Municipal Debt a Catch-22 for Collingswood
- Collingswood and PILOT Agreements Part I: the 'Old' Zane School
- Collingswood and PILOTs Part II: Impact on Schools
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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.
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
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.