'NO' TURNS TO 'YES'

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'NO' TURNS TO 'YES'

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Posted by Cuz she is Cunninghams butt girl on April 30, 2004 at 17:23:48:

'NO' TURNS TO 'YES'
Abatement extension squeaks through after councilwoman changes her vote

The Jersey City City Council narrowly approved the controversial extension of a tax abatement for a Journal Square developer after Councilwoman Viola Richardson switched her vote just before the final tally was called, turning a 4-5 defeat for the measure into a 5-4 approval.

After hours of impassioned pleas from residents to deny the 10-year extension to 2 Journal Square - and calls from area business leaders to grant it - the council Wednesday night appeared to defeat the ordinance granting the extension.

But after Councilman Mariano Vega cast the fifth and decisive vote to defeat the ordinance, Richardson left the council chambers to confer with her colleague, Steve Lipski of Journal Square - who voted in favor of the ordinance - and then came back to the dais and asked City Clerk Robert Byrne to change her vote from no to yes.

That switch swung the vote back in the other direction, granting the abatement extension and eliciting shock from many in the chambers.

"This was not an easy decision," Richardson said during a break just after the vote. "It's definitely something that Steve wanted, and it's his ward."

Lipski said he was surprised by Richardson's initial no vote and said he made a call on his cell phone while the vote was in progress to Mayor Glenn D. Cunningham, with whom both he and Richardson are politically aligned, to ask for the mayor's help in persuading her.

"I asked Viola if she would support (the extension)," Lipski said. "I called the mayor, but I didn't get him, I got (Deputy Mayor) Gene Drayton and I asked could (the mayor) talk to her."

Richardson said after the vote that Cunningham did not pressure her to vote one way or the other, and that she was mostly persuaded by her colleagues who supported the measure.

A spokesman for Cunningham, Stan H. Eason, said the mayor was concerned that if the abatement was not extended the building's flagship tenant, Automatic Data Processing, or ADP - would move, which the company had in fact threatened to do, taking its 700 employees with it.

"There were a lot of painstaking decisions made," Eason said of the vote. "We are concerned that 700 jobs would be lost."

Many opponents of the abatement at Wednesday night's meeting countered that ADP had effectively blackmailed the city by saying it would leave if the tax break was not given.

The extension allows the building owner - a consortium of local developers, including Joseph Panepinto, called PHM Urban Renewal Associates - to continue making payments in lieu of real estate taxes for another 10 years, adding on to the original 15-year abatement it received when it was built.

Instead of real estate taxes, PHM will pay 16 percent of its annual revenue directly to the city for the next five years and then 17 percent after that, amounts that the company estimates will be $782,000 and $850,000, respectively. Because PHM has been back on the tax rolls since its first abatement ran out in March 2003, it will get a credit of about $800,000, which will be deducted from its annual payment in 2008.

Panepinto argued that without the extension he would have to raise the rent on ADP, driving it out of the area.

"Journal Square is hurting," Panepinto said after the vote. "Journal Square needs this."

Panepinto, as well as several local business owners, said the 700 employees are vital to the economy of the troubled commercial area. Don Smartt, administrator of the Journal Square Special Improvement District, produced a list of figures assessing what the financial impact would be of losing the company.

Smartt said the state Division of Commerce estimates that employees spend roughly $10 a day in the district in which they work, which comes out to more than $1 million a year for ADP.

But council members and residents opposed to the extension said that with their own cafeteria and employee parking lot, ADP employees don't have all that great an impact on local businesses.

"There might be 600 people working there, but very few of them utilize the services of the local merchants," said Councilman Junior Maldonado, who voted against the extension.

Besides, many argued, Panepinto and his company should have to contend with the vagaries of the marketplace without asking for government help.

Anthony Cucci, a former mayor and member of the school board, accused the city of being cowed by Panepinto and ADP.

"I call it economic intimidation when you threaten to pick up and leave," he said. "I say to the developer: 'Pick your shovel and leave. Who cares?'"

Yvonne Blacer, a Downtown resident and frequent critic of tax abatements, characterized the deal as an example of "pay-to-play" and displayed charts showing contributions that Panepinto - a former chairman of the Hudson County Democratic Organization - has made over the years to various political action committees associated with the party.

Panepinto denied there was any quid pro quo involved in the abatement.

Mia Scanga, another Downtown resident who opposes abatements, said the city was setting one standard for the average citizen or business owner and another for the wealthy.

"We're asking everyone to pay their fair share," she said. "(Abatements) all come on the backs of one-to four-family homeowners."

Opponents argue that because abated properties are off the city tax rolls, the burden shifts to homeowners who pay real estate taxes.

But several also pointed to what they saw as the squalor of Journal Square in arguing that any incentive that would keep a business like ADP is worth it.

"The ADP building is one of the cleanest buildings in Journal Square," said Lipski, who voted for the extension along with Richardson, council members Mary Donnelly and Jerramiah Healy and Council President L. Harvey Smith.

Voting against the ordinance were Maldonado, Vega, Peter Brennan and William Gaughan.

Panepinto also said that he will now contribute $50,000 to the restoration of the Loew's Jersey Theater, $50,000 to the rehabilitation of the historic Apple Tree House and $25,000 to Speer Cemetery on Vroom Street.

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: 'NO' TURNS TO 'YES'
: Abatement extension squeaks through after councilwoman changes her vote

: The Jersey City City Council narrowly approved the controversial extension of a tax abatement for a Journal Square developer after Councilwoman Viola Richardson switched her vote just before the final tally was called, turning a 4-5 defeat for the measure into a 5-4 approval.

: After hours of impassioned pleas from residents to deny the 10-year extension to 2 Journal Square - and calls from area business leaders to grant it - the council Wednesday night appeared to defeat the ordinance granting the extension.

: But after Councilman Mariano Vega cast the fifth and decisive vote to defeat the ordinance, Richardson left the council chambers to confer with her colleague, Steve Lipski of Journal Square - who voted in favor of the ordinance - and then came back to the dais and asked City Clerk Robert Byrne to change her vote from no to yes.

: That switch swung the vote back in the other direction, granting the abatement extension and eliciting shock from many in the chambers.

: "This was not an easy decision," Richardson said during a break just after the vote. "It's definitely something that Steve wanted, and it's his ward."

: Lipski said he was surprised by Richardson's initial no vote and said he made a call on his cell phone while the vote was in progress to Mayor Glenn D. Cunningham, with whom both he and Richardson are politically aligned, to ask for the mayor's help in persuading her.

: "I asked Viola if she would support (the extension)," Lipski said. "I called the mayor, but I didn't get him, I got (Deputy Mayor) Gene Drayton and I asked could (the mayor) talk to her."

: Richardson said after the vote that Cunningham did not pressure her to vote one way or the other, and that she was mostly persuaded by her colleagues who supported the measure.

: A spokesman for Cunningham, Stan H. Eason, said the mayor was concerned that if the abatement was not extended the building's flagship tenant, Automatic Data Processing, or ADP - would move, which the company had in fact threatened to do, taking its 700 employees with it.

: "There were a lot of painstaking decisions made," Eason said of the vote. "We are concerned that 700 jobs would be lost."

: Many opponents of the abatement at Wednesday night's meeting countered that ADP had effectively blackmailed the city by saying it would leave if the tax break was not given.

: The extension allows the building owner - a consortium of local developers, including Joseph Panepinto, called PHM Urban Renewal Associates - to continue making payments in lieu of real estate taxes for another 10 years, adding on to the original 15-year abatement it received when it was built.

: Instead of real estate taxes, PHM will pay 16 percent of its annual revenue directly to the city for the next five years and then 17 percent after that, amounts that the company estimates will be $782,000 and $850,000, respectively. Because PHM has been back on the tax rolls since its first abatement ran out in March 2003, it will get a credit of about $800,000, which will be deducted from its annual payment in 2008.

: Panepinto argued that without the extension he would have to raise the rent on ADP, driving it out of the area.

: "Journal Square is hurting," Panepinto said after the vote. "Journal Square needs this."

: Panepinto, as well as several local business owners, said the 700 employees are vital to the economy of the troubled commercial area. Don Smartt, administrator of the Journal Square Special Improvement District, produced a list of figures assessing what the financial impact would be of losing the company.

: Smartt said the state Division of Commerce estimates that employees spend roughly $10 a day in the district in which they work, which comes out to more than $1 million a year for ADP.

: But council members and residents opposed to the extension said that with their own cafeteria and employee parking lot, ADP employees don't have all that great an impact on local businesses.

: "There might be 600 people working there, but very few of them utilize the services of the local merchants," said Councilman Junior Maldonado, who voted against the extension.

: Besides, many argued, Panepinto and his company should have to contend with the vagaries of the marketplace without asking for government help.

: Anthony Cucci, a former mayor and member of the school board, accused the city of being cowed by Panepinto and ADP.

: "I call it economic intimidation when you threaten to pick up and leave," he said. "I say to the developer: 'Pick your shovel and leave. Who cares?'"

: Yvonne Blacer, a Downtown resident and frequent critic of tax abatements, characterized the deal as an example of "pay-to-play" and displayed charts showing contributions that Panepinto - a former chairman of the Hudson County Democratic Organization - has made over the years to various political action committees associated with the party.

: Panepinto denied there was any quid pro quo involved in the abatement.

: Mia Scanga, another Downtown resident who opposes abatements, said the city was setting one standard for the average citizen or business owner and another for the wealthy.

: "We're asking everyone to pay their fair share," she said. "(Abatements) all come on the backs of one-to four-family homeowners."

: Opponents argue that because abated properties are off the city tax rolls, the burden shifts to homeowners who pay real estate taxes.

: But several also pointed to what they saw as the squalor of Journal Square in arguing that any incentive that would keep a business like ADP is worth it.

: "The ADP building is one of the cleanest buildings in Journal Square," said Lipski, who voted for the extension along with Richardson, council members Mary Donnelly and Jerramiah Healy and Council President L. Harvey Smith.

: Voting against the ordinance were Maldonado, Vega, Peter Brennan and William Gaughan.

: Panepinto also said that he will now contribute $50,000 to the restoration of the Loew's Jersey Theater, $50,000 to the rehabilitation of the historic Apple Tree House and $25,000 to Speer Cemetery on Vroom Street.

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