By Ron Leir
NORTH ARLINGTON –
The borough is headed for a showdown with the New Jersey Meadowlands Commission (NJMC) over an uncollected tax bill for the former Kingsland landfill parcel that’s left a big hole in the newly introduced 2012 municipal budget.
The Borough Council voted 4-2 to introduce the municipal spending plan on April 12, with Councilmen Mark Yampaglia and Steve Tanelli opposed.
Borough Council President James Hughes said the property was originally held by developer EnCap which, after going bankrupt, stopped paying taxes on the land in 2008, at which point “ownership reverted to the Meadowlands Commission,” which then took the position that the land was tax-exempt because it’s held by a public entity.
Since then, Hughes said, the tax bill for the 77-acre parcel, assessed by the borough at $14 million, has remained unpaid to the tune of an estimated $1.5 million.
“We could put it up for tax sale,” Hughes said, but the likelihood is there’d be “no takers.”
The property was targeted for residential development but the borough opted to change the zoning to industrial use, he said. However, the NJMC has the property zoned for open space/parkland.
Now the tax issue is in litigation but, at the same time, both sides are negotiating a possible one-year PILOT (payment in lieu of taxes) deal so the borough could hope to recoup some cash, Hughes said.
At its meeting on Oct. 26, 2011, the NJMC – after having previously filed a tax appeal in state Tax Court challenging the assessment of the property – approved an agreement with North Arlington to pay the borough $760,000 as a Payment In Lieu of Taxes.
That amount was to be delivered to the borough in installments, with $270,000 to be paid immediately, $280,000 to be paid a year later; and the $210,000 balance to be paid two years later.
But Hughes said the NJMC reneged on the agreement.
Asked for comment, NJMC spokesman Brian Aberback said: “The New Jersey Meadowlands Commission is committed to working with North Arlington to find a mutual resolution to this issue that is fair and equitable for both the Borough and the Commission.”
Acknowledging the action taken by the NJMC last October, Aberback added: “We are eager to meet with North Arlington officials to finalize the agreement for payment.”
In the meantime, however, the Borough says it’s being denied needed revenues to help balance its budget, which, as it’s now structured, calls for nearly $15.9 million to be raised in local taxation – about $1.5 million more than last year – to support total spending of about $20.5 million.
For the owner of an “average” house assessed at $319,000, that translates to annual property taxes of $3,391 or an increase of $332 over 2011, according to calculations by borough CFO James Mangin.
However, between now and May 24 – when the budget comes up for public hearing and adoption – the mayor and council said they’ll be chipping away, hoping they can find ways to ease the pain for taxpayers without resorting to employee layoffs.
Councilman Mark Johnson urged residents to attend the next NJMC meeting on April 25 at 10 a.m. in Lyndhurst to voice their displeasure with the agency.