City approves tax break for Seaview Manor

BY CHRISTINE VARNO
Staff Writer

LONG BRANCH — The City Council authorized a tax exemption program with the Long Branch Housing Authority (LBHA) for the new Seaview Manor affordable housing project last week.

The ordinance for the financial agreement was introduced at the Sept. 27 council meeting and was adopted at the Oct. 11 meeting.

“I am glad the city is adding affordable housing units,” Bill Nordahl, Marine Terrace, said during the public hearing of ordinance 27-05 at the meeting.

“But what the city is adding in terms of affordable housing is not nearly enough for what they have torn down,” he added.

Seaview Housing Urban Renewal Associates LLC, made up of the LBHA and Philadelphia-based developer Penrose Development, are constructing a low-income housing tax-credit project of 40 rental units on 3 acres of land at the site of the former Seaview Manor complex on the corner of Seaview and Ellis avenues.

The complex was torn down after it was learned that the former New Jersey Natural Gas company site on Long Branch Avenue contaminated the site.

LBHA executive director Tyrone Garrett said in an interview earlier this month that a financial agreement for an affordable housing project is necessary because paying taxes on an affordable housing project would not generate the same tax revenues as a market-rate project.

“The revenue stream for affordable housing is a lot less than market rate. This [financial] plan will set us at a dollar amount based on our budget line,” Garrett said.

The project will consist of one-, two-, three-, and four-bedroom rental units in a mix of duplexes, townhomes and one-story dwellings in eight buildings.

The units will be leased to tenants whose incomes are at or less than 50 percent of the city’s median income, according to Garrett.

Nordahl asked council members if they were going to keep their word with the residents who were displaced from the original Seaview Manor complex during the construction of the new project.

“Those residents were told they would have the first choice [to reside in the new units],” Nordahl said.

Mayor Adam Schneider said the LBHA has control over the Seaview Manor complex, but added that he has been told that the authority is committed to offering the units to the displaced residents before opening them up to the public.

The ordinance is an approval of the LBHA application for a tax exemption to allow the authority to participate in a program for Payments In Lieu Of Taxes, known as a Pilot program.

City Financial Director Ronald Mehlhorn explained that a Pilot allows the LBHA to pay the same amount in taxes to the city every year without the amount fluctuating.

The LBHA will factor an exact amount into its operating budget and make payments to the city on a phase-in basis, according to Mehlhorn.

The phases of the payment plan begin with a term of 15 years in which the annual service charge will be equal to 6.28 percent of the annual gross revenue and will escalate over a period of some 20 years to 80 percent of the taxes due on the value of the land.

The $9 million project, which was started in January 2004, is expected to be completed by late spring 2006, according to Garrett.

The project is being funded through $1 million from the LBHA redevelopment fund, an affordable housing grant for $220,000 from the Federal Home Loan Bank of New York, a tax credit of approximately $4 million and a balanced housing/home express grant for $3 million from the New Jersey Mortgage Finance Agency.