JERSEY CITY AND SECAUCUS – The Town of Secaucus has asked the state Department of Community Affairs (DCA) and the Office of the New Jersey Attorney General to review the tax abatement deal that Jersey City approved for Goya Foods Inc. in 2011.
According to a memo filed with the DCA by Secaucus’ town attorney, the 20-year tax abatement offered to Goya has allowed Jersey City to keep more than $1.1 million annually from a regional tax sharing pool, a pool to which Secaucus contributes more than $2.8 million annually.
Secaucus is arguing that had Goya Foods been forced to pay conventional property taxes, Jersey City would have had to forfeit most of this $1.1 million payment and Secaucus’ own $2.8 million contribution to the tax sharing pool would have been reduced. Jersey City is still getting money from Goya directly into the city’s coffers via the abatement deal.
In a memo to the DCA dated March 12, Secaucus Town Attorney Anthony D’Elia wrote that, “Jersey City made a conscious decision to grant a 20-year tax exemption to Goya based upon the understanding that to do otherwise would jeopardize a significant portion of the payments due to Jersey City under the…[Inter-Municipal Tax Sharing Plan]. In doing so, Jersey City, in essence, required the district’s paying municipalities to underwrite Jersey City’s generous tax exemption provided to Goya. Jersey City…recognized that it could utilize the payments received from the [Inter-Municipal Tax Sharing Plan] to provide the tax exemption.”
The controversial tax abatement deal offered to Goya was approved by a divided Jersey City Council in November 2011. But the abatement has seen renewed attention recently since Mayor Jerramiah T. Healy has listed Goya’s move to Jersey City among the accomplishments of his administration.
Healy is facing a stiff reelection bid in May.
Goya – which is currently headquartered in Secaucus with another facility on Long Island – is currently building a new 615,000-square-foot headquarters at 360 County Rd. in Jersey City. The new facility will include 577,000 square feet of warehouse space and 38,000 square feet of office space.
The 20-year tax abatement Jersey City approved for Goya will require the company to pay $806,400 annually for the first six years the company is in Jersey City. In years seven through 12 the company will pay $892,950 each year. In years 13 through 20, Goya will pay $979,500 each year.
When the company broke ground on its new facility last September, Secaucus Mayor Michael Gonnelli hailed it as a win-win for Jersey City, Secaucus, and the New Jersey Meadowlands region.
At the time, Gonnelli assumed the new facility would impact the Inter-Municipal Tax Sharing Plan and decrease the amount of money Secaucus taxpayers have to contribute to it. As that has not happened, thanks to the approved abatement, Gonnelli and Secaucus are asking the state Attorney General to investigate.
D’Elia has sent a copy of the ordinance approving the abatement to the DCA
“Please accept this correspondence as a formal request that the attorney general review the attached Jersey City ordinance and…advise whether Jersey City’s actions in granting Goya a 20-year tax exemption violate the intent and purpose of the Inter-Municipal Tax-Sharing Plan,” D’Elia wrote.
William Matsikoudis, corporation counsel for Jersey City, had no comment on the matter late Tuesday.
For more on this story, please see the weekend editions of the Secaucus Reporter and Jersey City Reporter. – E. Assata Wright