RAD-ical plan to save tax $$$?
Bayonne is now armed with a new tool to pay for improvements at the Peninsula at Bayonne Harbor. But don’t expect the city to tap this source until well into next year, cautioned an attorney who helped draft the plan.
On Wednesday, the City Council passed an ordinance creating a “Revenue Allocation District” that places the Harbor Station, Bayonne Bay and maritime planning districts at the Peninsula within the RAD boundaries.
Under the RAD ordinance, the city can issue bonds to pay for improvements within the district borders and use the taxes or abated taxes generated by the projects in the RAD as “pledged” revenue to pay debt service on the bonds.
The ordinance defines the improvements to be financed under the RAD as those that “promote approaches and concepts to reduce congestion; enhance mobility; assist in the redevelopment of the city; and otherwise improve the quality of life of its citizens.”
Originally, the city had planned to designate the entire Peninsula for the RAD, but Mayor Mark Smith said the city’s thinking now is “that as we get new projects going (at the Peninsula), we’ll expand the RAD to include those areas.”
Joseph Baumann, an attorney with McManimon & Scotland, a Newark firm that serves as bond counsel to the Bayonne Local Redevelopment Authority, said the key is to place the RAD on project sites “where there are current development agreements” retroactive to Oct. 1, 2007.
“The goal is to use the RAD to finance infrastructure work and to free up (Peninsula) land sale proceeds for (municipal) tax stabilization and reduction,” Baumann said. “That’s the master plan – the overarching goal.”
Baumann said the state Local Finance Board advised Bayonne to restrict the RAD boundaries to three districts for now until the city and BLRA have a better sense of how the three remaining Peninsula districts – the Landing, Loft and Point – will be developed.
Development proposals for the Landing, Loft and Point were due to be submitted to the BLRA by Friday.
There is one major legal issue clouding the status of the maritime districts: The Port Authority of New York and New Jersey is suing BLRA over its maritime sale to auto marine terminal operator Ports America.
The RAD is not likely to be implemented until this lawsuit is settled and revenue generating projects, such as the Trammel Crow’s first 115 rental apartments at Bayonne Bay, are up and running – perhaps toward the end of 2009, Baumann said.
By RONALD LEIR