EGG HARBOR CITY - City Council has voted to change the terms of a land sale to a developer who plans to build 100 units of affordable senior housing at the site of the demolished Fanny D. Rittenberg Middle School.
The vote happened after a long meeting attended Thursday night by about 30 people who live near the site and oppose the project.
The city will now sell the two-acre plot in the 500 block of Philadelphia Avenue for $1, rather than the original price of $800,000, and will accept a 30-year schedule of payments in lieu of taxes limited to 10 percent of rental receipts. A previous agreement set them at about 14 percent, Council President Ed Dennis said.
Conifer Realty of Mount Laurel, Burlington County, and its Rittenberg Urban Renewal Associates requested the changes to give the company a better shot at receiving Low Income Housing Tax Credits from the New Jersey Housing and Mortgage Finance Agency.
Conifer Senior Vice President Charles Lewis said the city must contribute at least 5 percent of the project's total cost of $20 million to get a perfect score from the state agency, which is necessary for the application to succeed.
Construction could start as soon as the fall, council members have said, if the company gets its tax credits. The land-sale agreement is contingent upon the company getting the financing it needs.
Councilman Clifford Mays Jr, had opposed the deal, while most other council members were vocally in favor of it, as was Mayor Lisa Jiampetti.
The vote Thursday was 6 to 1, with Mays the only one in opposition. Councilmembers Elizabeth "Betty" Schoenstein and Mason Wright were absent.
Many in attendance felt the amount to be paid to the city in lieu of taxes was too low. Conifer estimates payments will start at about $61,000 the first year and rise to $108,000 in the 30th year.
"You are talking about $61,000 a year. I'm paying about 10 percent of that right now," said Margie Mangold, of the nearby Liverpool Avenue, of her $5,000 tax bill on a small home. If council has any doubts, "You are better off doing nothing."
Other residents objected to essentially giving the property away.
But Dennis said Conifer will spend about $500,000 on offsite street improvements in the 500 block, to match lighting, sidewalks and curbing downtown. That work was not part of the original agreement.
The Rittenberg school was demolished and the site prepared for redevelopment in 2011 at a cost of $250,000, paid by the Egg Harbor City School District. The lot is assessed at $140,500, said Tax Assessor Bill Johnson.
Another neighbor, Barbara Adams, said she's worried Conifer won't be able to fill the building with senior citizens and might bring in more low-income Section 8 tenants, some of whom have caused problems in other apartment complexes in town.
"We don't want to repeat The Village or Washington Avenue," she said of two complexes that residents were told would be moderate income and ended up largely serving low-income families. She acknowledged she had seen a Conifer senior development in Lower Township and said it was beautiful.
Conifer's Lewis and Dennis said the project is deed restricted to serve only senior citizens over age 62.
"It doesn't matter what you are doing, there will always be some people who are going to object," Lewis said after the meeting. "We've been in business 35 years and have never defaulted or had a project go bad. All of our funding is contingent on the building serving seniors only."
Conifer has 60 senior affordable housing projects nationwide, including 16 in New Jersey, Lewis said.
Some residents complained about the size of the four-story building, or potential parking issues, but Dennis said the building had already gone through the approval process about three years ago. The only issues up for consideration were the change in price of the land, and in payments in lieu of taxes, he said.
Conifer is hoping to get $1.4 million in tax credits to sell to investors, to raise about $13 million; and another $5 million in zero percent soft loans from Hurricane Sandy relief funds, to be paid back based on income from the property, he said. That would leave $2 million to be financed through a mortgage.
The city had to move quickly to amend the agreements with Conifer in order to make the deadline for the next round of tax-credit applications, which is May 31.
Ninety percent of the units would be for people making 50 percent to 60 percent of median income for the region, Lewis said. Only 10 percent would be for those making 30 percent of median income.
At 60 percent of median income, a single person would have an income of $28,800, and a couple an income of $32,880, Lewis said. At 30 percent of median income, a single person would have an income of $14,400 and a couple $16,440, he said.
In other business, City Council passed its 2013 budget. The hearing for the budget was earlier this month, but council had to wait to restructure some of its debt with the Local Finance Board before it could vote on the $5.7 million spending plan.
The new rate jumps 8.9 cents to $1.80 per $100 assessed value. So the tax bill for municipal services alone will be $2,565 on the average home, which was assessed at about $142,500 in 2013, according to city Tax Assessor Bill Johnson.
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