Town seeing red on taxes

Photo by Anthony J. Machcinski/ The Red Bulls say they don’t have to pay real estate taxes on their $200 million Harrison stadium.


By Ron Leir

Harrison —
Want to buy a soccer stadium that can hold up to 25,000 spectators and is just across the street from a bi-state commuter rail station?
The New York Red Bulls professional soccer team could be playing their home games in a stadium belonging to someone else if the team’s owners don’t pay their real estate taxes.
Red Bull Arena ranks No. 1 on the list of what the Town of Harrison has classified as delinquent taxpayers, so the town is looking to sell a tax lien for the property along Frank Rodgers Blvd. South to some third party.
That opportunity will come Dec. 15 at 10 a.m. at Harrison Town Hall when the town is slated to hold an “accelerated tax sale” – applicable to the current tax year – a sale that Town Attorney Paul Zarbetski says the state Dept. of Community Affairs encouraged Harrison to do to “accelerate” the flow of revenues to the town.
Harrison says that Red Bull Park, Inc. owes the town a total of $3,589,059 in taxes for 2010 and 2011, plus interest, but the stadium owners contend that the property should be tax-exempt as a public exhibition/entertainment facility. The dispute awaits a ruling by New Jersey State Tax Court Judge Christine M. Nugent, who heard oral arguments by both sides months ago.
Other top tax delinquents, according to municipal tax records, include H&F Realty Co., listed as owing $40,306 for a portion of a warehouse property at 1000 Frank Rodgers Blvd. South; Alexander Parchuk, listed as owing $32,038 for a commercial building at 101-107 Frank Rodgers Blvd. North; V.I.P. Realty Associates, listed as owing $23,334 for the VO Toys property at 400 S. 5th St.; and John & Martha Murray, listed as owing $19,334 for the property at 210-214 Davis Ave., occupied by Condon Memorial Home.
Of the roughly $31.3 million Harrison collects annually in taxes and water bills, delinquent accounts currently total about $4.1 million but that figure could fall between now and the time of the tax sale, Zarbetski said.
In hopes of expediting a decision on the stadium case, the town’s special counsel, Kearny attorney Norman Doyle, went to tax court in Newark Dec. 2 to ask the judge to dismiss Red Bull’s tax appeals on the grounds that the owners failed to pay the taxes due when the owners filed their appeals for 2010 and 2011 pending the court’s review.
The court denied the motion to dismiss but Zarbetski said that Harrison could still go ahead with its plans to put the stadium on the tax sale list and hope for the best.
One of the attorneys involved in the litigation said he doesn’t expect a ruling by the court until after Jan. 1.
U.S. Sen. Robert Menendez (D-Union City), who visited Harrison last Friday for a ribbon-cutting at the town’s newest development, Harrison Station, said that while he hadn’t read the lawyers’ briefs, he still felt the Red Bull position hard to swallow, given its dependence, to an extent, on municipal services. Granting the team a tax abatement might be more palatable, he suggested. But, Menendez added, “There’s a difference between getting a tax break and being tax-exempt. You can’t have everybody coming into town and not paying towards the common good.”
Harrison incurred more than $39 million in debt when the Hudson County Improvement Authority issued bonds to acquire the land on which the stadium was built – that land being designated a redevelopment area by the town. Harrison’s plan was to pay off the debt with revenues from PILOT (payments in lieu of taxes) agreements with developers slated to build in that redevelopment zone but those payments have lagged behind since most of the projected developments have been slow coming on line, although that’s expected to change shortly.
Harrison – whose bond rating has slipped to Ba3 (substantial credit risk), as rated by Moody’s investment service, and whose employee work force has been trimmed severely via layoffs and retirements – is, nonetheless, getting some breaks from the state, which is closely monitoring the town’s fiscal affairs.
For example, while the state initially gave the town $1.5 million in “transitional aid” for 2011, it supplemented that aid with an additional $2 million to help pay recent retirees accumulated unused sick and vacation time plus an additional $1 million as a reserve fund to help pay down debt, according to town Chief Financial Officer Gabriela Simoes.
Additionally, on Aug. 18 the state Local Finance Board approved Harrison’s application to qualify several existing bond ordinances under the state’s Qualified Bond Act, thereby expediting any future local bond sales by increasing market access and reducing borrowing costs, Simoes said.
“These are a few of the steps the town is taking to secure future market access despite this year’s credit downgrade,” Simoes said.
Because of the fiscal relief bestowed by the state’s largesse, Harrison was able to hold off plans to sell several town-owned vacant parcels presently used for free parking by many Third Ward residents near the Harrison Gardens public housing complex.
Harrison also was the indirect beneficiary of the state Economic Development Authority’s recent award of a $7.4 million incentive grant to help facilitate development of a 136-room hotel in the town’s redevelopment zone.

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