BRICK – If not for a new financial agreement with the developer of a planned sports dome in town, the facility might not have been built.
During the August 23 council meeting, the governing body voted for an introduced ordinance that established a payment in lieu of taxes agreement with LCP Sports II Urban Renewal LLC.
“The sports dome developers have faced financial challenges as a direct result of the pandemic,” said Mayor John G. Ducey. “The original developer lost so much money, they had to find new investors and things like that.”
He said the developer is fully committed to the super dome project, but could not raise the capital without a payment in lieu of taxes agreement with the township.
LCP Sports II Urban Renewal LLC will pay an annual service charge of $280,000 that works as a municipal lien, and is collected in the same manner as conventional property taxes.
The State of New Jersey allows tax exemptions, abatements and collection of payment in lieu of taxes, which is guaranteed in the state constitution, the mayor said.
“In these agreements, an annual service charge replaces the conventional tax on the improvements, so annual service charges are a critical tool in the municipal tool kit to effectuate the redevelopment of underutilized and unproductive properties, such as this one that sat there for years and years and years,” Mayor Ducey said.
The agreement’s term is whichever comes first: 30 years from redevelopment project completion, or 35 years from the execution of the financial agreement, based on a percentage of project revenue and percentage of project cost, he explained.
After the expiration of the financial agreement, the property is subject to conventional property taxes.
Without the payment in lieu of taxes agreement, the redevelopment project could not and would not be built as designed and approved by the governing body, Mayor Ducey said.
“What they did was they ran all the numbers and everything else, and it does meet the ‘but for,’ meaning they couldn’t afford to do it without this actual agreement being in place,” he said.
95 percent of the annual service charge will go to the township and five percent will go to the county. In conventional tax situations, the township gets about a third, with the school district and the county splitting the other two thirds. Brick benefits from the agreement since it will collect more revenue through the agreement than it would from regular taxes.
In an added benefit in the agreement, township students are guaranteed time at the sports dome for no cost, the mayor said.
The sports dome will be built on the back portion of the 11-acre site of the former Foodtown property on Route 70. The township purchased the property in 2003 for $6.1 million.
The site sat empty for many years, and then finally it was sold for $5 million and split and sold to two different entities.
The front half, which is under construction, will house retail, including a new Aldi’s.
The adoption of the ordinance and public comment will take place at the next council meeting on Tuesday, September 13 at 7 p.m.