The City Council has given Mayor Dawn Zimmer six more months to determine whether extending a 40-year old tax abatement is necessary to keep one of Hoboken’s longstanding mixed-income buildings affordable.
In March, the administration was granted a three-month extension to complete their research. The extension to the extension, granted on Wednesday, allows the tax abatement agreement for Clock Towers Apartments, scheduled to expire in March, to continue until Dec. 26, 2015.
Without the extension, an outside lawyer for the city said the Clock Towers landlord would have to pay full property taxes and might be able to pass some of the added costs on to his tenants in the form of a surcharge.
The added time will also allow Hoboken to see if Clock Towers is awarded new federal housing vouchers recently made available for low-income veterans. Mayor Zimmer has made a commitment to end veteran homelessness in Hoboken by the end of 2015.
Built in a rehabilitated turn-of-the-century factory for precision instruments, Clock Towers is a crucial bastion of low and moderate-income housing in a city that has seen thirty years of displacement due to rising rents and property values.
Of the 173 units in the complex, 68 are subsidized with U.S. Department of Housing and Urban Development (HUD) Section 8 project-based vouchers, 16 have state tenant-based vouchers, and the remainder are rent-stabilized, though not necessarily affordable.
The council awarded the temporary six-month extension unanimously with Councilwoman Theresa Castellano absent.
Protecting tenants from surcharges
The owners of Clock Towers are seeking a 10-year extension on the building’s Payment in Lieu of Taxes (PILOT) agreement, which has been in effect since 1974. In March, the City Council gave redevelopment special counsel McManimon Scotland & Baumann three months to find out if such a step was advisable or legal.
So far, the McManimon team has determined that such an extension is authorized under the relevant law, but was not ready to say whether it would be necessary or financially feasible for the city to grant.
“That continues to be an open question,” said McManimon attorney Jong Sook Nee on Wednesday.
The most crucial issue in the council’s mind seemed to be how much of Clock Towers’ property tax increase would be passed on to rent-stabilized residents if the PILOT ended.
“It’s putting a real burden on people who…want to come and live in this town.” – Giovanni LaBarbera
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“We’re looking at drastic rent increases for residents in that building if in fact the PILOT doesn’t get extended or if we can’t figure out a different approach,” warned Councilman Michael Russo, whose ward includes Clock Towers.
Nee said the city might be able to negotiate a gradual increase in tax surcharges once the PILOT lapses. But the city would still have to extend the PILOT at least temporarily to preserve its leverage in such negotiations.
Councilwoman Jennifer Giattino stressed that tenant tax surcharges would only be economically feasible if the stabilized rents in Clock Towers are still below market rate, information Nee was unable to provide at the meeting.
The city is also considering possible concessions or givebacks that it could secure from the owners in exchange for extending the PILOT. In addition to applying for the new HUD veteran vouchers, said Nee, the property owners are open to restricting the 89 rent-stabilized units in Clock Towers to only Hoboken residents or creating a veteran preference for vacant apartments.
Low-income veterans could see new units
In a June 16 letter to the council, Zimmer emphasized that the temporary PILOT extension would allow Clock Towers time to possibly win new vouchers specifically designed for very-low-income households headed by a veteran.
The Clock Towers owners have promised to apply for 20 vouchers from a new HUD Section 8 program administered by New Jersey Department of Community Affairs (DCA).
However, only 100 vouchers are available through the program in total. According to Nee, the DCA program coordinator “said they had 52 agencies submit at least an initial level of interest at their bidder’s conference.”
The vouchers will be announced on July 20. If Clock Towers receives any vouchers, they can be applied to units available within 90 days or held until units become available through natural attrition.
“It wouldn’t be a matter of forcing vacancies,” explained Nee.
The new vouchers for Clock Towers are just one of several initiatives Zimmer is pushing to increase low-income housing for veterans in Hoboken. Last year, she signed The Mayors Challenge to End Veteran Homelessness, committing to bring an end to veteran homelessness in her city by the end of 2015.
The city is also working with American Legion Post 107 on a plan to expand its Second Street headquarters to include transitional housing for homeless veterans backed by federal vouchers.
Neither the Clock Towers units nor the American Legion concept appear likely to come on line by the end of 2015, and Zimmer did not indicate another plan that could provide housing on a more immediate basis.
Still, she said she was proud of the city’s efforts to look after homeless veterans, and mentioned that the city also provided grants to the Hoboken Shelter.
According to Zimmer, the current number of homeless veterans in Hoboken is not known, although there are cumulative estimates for Hudson County.
Zoning book gets new edition
Also on Wednesday, the City Council passed an ordinance making several changes to the city zoning code. Each is designed to decrease the number of applications before the Zoning Board of Adjustment by permitting certain common building alterations that currently require a variance.
These alterations include adding a roof deck, making superficial changes to a building on a nonconforming lot, and most significantly, adding height to a residential building to make up for the loss of a garden apartment lying below flood elevation.
By streamlining sections of the zoning book, the council and administration hope to alleviate a backlog of applications before the Zoning Board that has reached 40 in recent years and save property owners seeking relatively mundane improvements the onerous time and monetary expense of a full application.
Giovanni LaBarbera is one of the property owners the zoning changes passed Wednesday were designed to help.
LaBarbera bought a four-story rowhouse at 737 Garden St. last August and sought to raise it above the flood zone and convert it to two units, among other moderate alterations. Because the amended zoning book was not yet in effect, he had to go before the Zoning Board and only received approval this past Tuesday.
“Everything that’s being proposed for this new zoning is what I’ve had to pay tens of thousands of dollars to just get final approval yesterday,” said LaBarbera, “between what the costs are…going through the Zoning Board, architectural [drawings], attorney fees, and the time that I’ve had to carry the building.”
“It’s putting a real burden on people who are making an investment and want to come and live in this town,” added LaBarbera.
Not all the residents at Wednesday’s meeting were in favor of the zoning ordinance. Among others, Dan Tumpson warned that the new law could facilitate a rash of tear downs among the rowhouses that make up Hoboken’s historic residential character by allowing a house in a flood zone to build 40 feet above its flood elevation without a variance. If a garden apartment sustains a certain amount of damage due to flooding, the Federal Emergency Management Agency can demand that it be vacated.
Tumpson suggested that Hoboken houses could be protected by declaring them historic structures, as is allowed in FEMA regulations. However, Councilman James Doyle explained that the city of Hoboken cannot unilaterally name a house, much less a whole neighborhood, an official historic place, nor would it want to.
“Not every structure is a national landmark,” said Doyle.
The council promised to closely monitor the applications before the city’s Zoning Board and Zoning Office over the next year, and to act quickly to address any unforeseen consequences that arise.
The ordinance amending the city zoning code was passed unanimously by those present.
Carlo Davis may be reached at cdavis@hudsonreporter.com.