2009 Mar 11th

Hoboken’s W Hotel & Residence – Condo Owners Get a Sweet Property Tax Deal

Buy an (Almost) Million Dollar Condo – Pay Under $4,000 a Year Hoboken Property Tax

Hoboken residents are up in arms about rising property taxes.  Several groups have been formed to fight a recent 47% property tax increase.  The city is in the midst of a financial crisis making it unlikely that the ‘temporary’ property tax increase will be rescinded any time soon.  Yet today I learned that the purchasers of multi-million dollar condos at the Hoboken W Hotel & Residences are the beneficiaries of a sweet deal, indeed.  The W property enjoys a Port Authority PILOT (payment in lieu of taxes) for 99 years.  That’s correct – 99 years.  As a result, purchasers of these condo units atop the W Hotel will be paying incredibly disproportionately low property taxes on their Hoboken property.

Apples to Apples

Just to compare apples to apples, lets look at a unit at Maxwell Place and a similar unit at the Hoboken W Hotel.

1125 Maxwell Lane 

Unit 518 – 813 sq. ft. 1 bed, 1 bath.  Asking $579,000 – taxes based on sale price at 1.3% of purchase price = $7,527.  No limit on tax increases.

225 River St. (W Residences)

Unit 1806 – 800 sq. ft. 1 bed, 1 bath.  Asking $945,000 – taxes $3,296 and will gradually increase to $7,900 in year 100

As For The Rest Of Us Poor Hoboken Taxpayers

I just received the following very timely email from the Lower Hoboken Taxes group:

NOTE: Due to time/space considerations, the complete newsletter is available online and not in this email. Click here for full newsletter: http://www.lowerhobokentaxes.com/forum/topics/lht-newsletter-march-11th-2009

Breaking News: Additional $2.1 million To Be Raised in Taxes This Year: Special Budget Meeting Tonight 6:00 pm

2009 Budget is being revised upwards another $5.1 mm from $121 mm to $126 mm resulting in an additional $2.1 mm to be raised via taxes (totaling $64.2 mm from $34 mm in 2008!) Come to the budget meeting tonight at 6:00 to learn more and encourage cuts!

Latest increase does not included the $4.2 mm charge for the illegal early retirement program. It is anticipated we will have to pay this in July at the beginning of the next fiscal year.

Check out the letter from Judy Tripodi regarding the amended budget (via Hoboken411). http://hoboken411.com/wp-content/uploads/2009/03/judy-tripodi-memo-…

Force Change Rally was a Success!

Thank you to all those who came out to the rally and City Council meeting last week! Press coverage and video at:  www.lowerhobokentaxes.com or NBC4 New York: http://www.nbcnewyork.com/news/local/Town_Digs_into_Citizens__Pocke…

(link in email not working)

What Happened Last Week:

Last week’s Council Meeting was standing room only with the following key issues being discussed:

– Church Towers: The council voted 6-2 to approve an extension of the Church Towers Pilot that included requirements by the owners to obtain a HUD program to keep the housing affordable. Zimmer and Cunningham tried to take the issue to subcommittee but were overruled. They both voted no on the extension stating that they were not sure the resolution could bind the owners to a HUD program, therefore granting the owner a tax break while putting the tenants potentially at risk for the owner to raise rents or take the building condo.  Full story available at: http://www.lowerhobokentaxes.com/forum/topics/lht-newsletter-march-11th-2009

Visit Lower Hoboken Taxes at: http://www.lowerhobokentaxes.com

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  1. Hoboken’s W Hotel & Residence - Condo Owners Get a Sweet Property … | LandRetails.Com

    […] More: Hoboken’s W Hotel & Residence – Condo Owners Get a Sweet Property … […]

  2. dkzzzz

    What does Hoboken get for Pilot programs like in a case of W hotel?
    Well except for obvious bribes to local mafia.

  3. Mike

    Lori,

    As an owner in 1125 Maxwell, we are not paying 1.3% in taxes. It is more like 1.67%.

  4. Lori Turoff

    Even worse.

  5. Tiger

    Not to draw politics into this, but if you read Hoboken411, there’s a very interesting series “Hoboken: City for Sale” being written by a contributor. The writer simply “connects the dots” between our officials, who contributed to their campaigns, and what they got in return. Interesting.

    I know politicians are usually open for the highest bidder; I just didn’t know you can buy a Hoboken council person so cheap, for just a few thousand dollars! Now this is a good investment! Buy yourself a politician and see savings rack in pilot, incredibly low property assessments, and similar favours. Oh you and you will never get ticketed, and your car would never get booted or towed.

    Those of you with access to NJ Tax records, check on 518 Adams for an example.

  6. Ari

    Tiger, don’t sell your corrupt politicians short! I’m sure they have taken tens of thousands in bribes that have gone undetected.

    As to the W….I am curious as to why a PILOT program was provided to such obviously valuable waterfront property. Can anyone comment on the process for receiving such a deal?

    I would have thought there would have been a million different builders looking to build on that spot, with or without tax breaks.

  7. D$

    If you assume that the Maxwell unit’s property taxes would start at 1.65% of asking and grow at 3.0% per year, the present value of the W unit’s tax savings (adjusting for 3.0% average annual inflation over 99 years) is $781,900. Assuming that benefit is incorporated into the price, it’s like buying the W unit for $163,100. Any takers?

    (The bad news is that the value of this tax abatement declines annually as you use it up – therefore, the property should appreciate more slowly to account for this offset. The other bad news is that the developer is able to cash in on this abatement which is clearly propping up the unit’s value beyond what it would otherwise be worth in this market. Applied Co. – the developer – has been known for shady Hoboken dealings in the past, with its patriarch jailed for some period of time).

  8. Tiger

    Ari, lol, that’s true. That’s still very affordable lol.

    The ‘reasoning’ behind the PILOT is that residents of those units use ‘less’ services than your average Hoboken resident. They don’t send their kids to public school (ha!), live in safer areas (less police work), AND -get this- because these are newer buildings, they are more green.

    No one talks about infrastructure, sewage, traffic, or any of the **real** issues we deal with everyday.

    But in that case I’m curious, I’m single — no kids (not that I’m aware of 😀 ), can I not pay taxes for school? Also, I travel quite frequently, almost 50% out, can I also get a discount on that too? See how flawed the PILOT program is?

  9. Lori

    From what I’ve been told it is a “Port Authority” pilot. I suppose they own the land? I can see giving a reputable business like a top hotel a tax incentive to come into the community, bring customers & create jobs. But why do the condo owners get to benefit from the tax break? What do they contribute?

  10. JC

    This doesnt sound so different then a tax abatement we see all the time in the city. Sometimes these abatements ask developer to create x amount of low income housing, but in this case maybe the developer is hiring x amount of people so there is a sweeter deal. I’m envious of the low taxes but again there are plenty of brand new condo’s in NYC that folks pay $90 a month

  11. patk14

    I believe the idea is that we attract a top notch hotel to build in Hoboken and thereby improve the overall image of the town (and increase the value of the existing condos). The W is incented by the PILOT knowing that, all else being equal, they will be able to sell those tax abated units for more than if the “normal” tax rate was applied. The condo buyers in the W will be paying a higher price upfront for the tax advantage that they receive. That higher upfront price is pocketed by developer. To be fair, there was/is risk to a high end hotel locating in Hoboken and having to sell units at above the prices generally paid to live in Hoboken.

  12. Tiger

    patk14 — That’s what we were told. Again, just like the arguement that ‘they don’t use city services as much’, this is flawed because several hotels tried to open in Hoboken over the years; and some long term residents mentioned that there was a Marriot plan back in the 80s to do so.

    I guess W hit the right buttons – or pockets. And btw, take it from this frequent traveler, W hotels are nice and luxurious, but they also have a bad reputation of ‘catering’ to certain clintelle, if you know what I mean. I hope this wont’ be the case in Hoboken.

  13. Ron

    “they don’t use city services as much”

    out of curiosity, who used this as the rationale?
    I can’t imagine a public official making this statement.

    “but they also have a bad reputation of ‘catering’ to certain clintelle, if you know what I mean. I hope this wont’ be the case in Hoboken.”

    Are you kidding? The W Hoboken will make the other Ws look like church groups…I hope they have a cleaning crew that can get steroids and hair gel stains out of the linen….

  14. Tiger

    Re – City services: I need to dig it up, but I’m faily certain the Mayor said something along those lines, not in this exact context, but very close.

    I personally wish Hoboken got it’s own boutique hotel – something perhaps not as big, but true to the character and charisma of Hoboken. Boutique hotels have better service, are generally cleaner and better decorated. One of my all time favorite hotels is Le Bourget Hotel in Minneapolis – highly recommended if you ever head there http://lebourgethotel.com/

    Ron, lol :-). Maybe I shouldnt’ have pointed that out about W. In all cases, I hope it turns out to be a nice place, welcoming for visitors and residents alike – I’m looking forward to the steak house opening there (As long as I can afford it :-) ).

  15. Mark

    patk14: I agree with you…. although in general the town gets ripped off with PILOT programs, the W actually brings a lot BACK to Hoboken. Think about jobs, people visiting with deep pockets, prestige and we’re listed on the W website :)

  16. Lori Turoff

    I’m happy to have a W. Now my friends visiting from out of town won’t have to sleep on my couch. I just wish the building was more attractive! Look at the Standard that’s over the old west side rail lines across the river. Now that’s a cool hotel! http://www.standardhotels.com/new-york-city/

  17. Tiger

    Agree Lori, of all the chains, I guess W is one of the best. Hey, as long as it’s not a Best Western or a Comfort Inn. Now that’s the day I’ll pack and leave; when a Comfort Inn opens in Hoboken. That, and/or AppleBees.

    Maybe the NW area could get a nice hotel too? That would be great, epscially if the long rumored 15th street lightrail stop is built

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