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Urban Land Institute

February 26, 2013. Urban Land Institute. Property Tax Appeals and Financial Opportunities Presented by a Challenging Market: Using the Tax Appeal Process and Understanding Tax Abatements and Incentives to Navigate a Down Market. Partnership for Action. State, County and Local Partners.

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Urban Land Institute

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  1. February 26, 2013 Urban Land Institute Property Tax Appeals and Financial Opportunities Presented by a Challenging Market: Using the Tax Appeal Process and Understanding Tax Abatements and Incentives to Navigate a Down Market

  2. Partnership for Action State, County and Local Partners Lt. Governor Kim Guadagno New Jersey Business Action Center

  3. Financing small and mid-sized businesses • Administering State tax incentives to retain and grow jobs • Revitalizing communities through redevelopment initiatives • Supporting entrepreneurial development • New Jersey’s Bank

  4. Focus – Urban Redevelopment City of Newark

  5. Courtyard by Marriott Newark Downtown • In September 2012, Tucker Development’s $35 million Courtyard by Marriott • became the first hotel in Newark’s downtown in over four decades. • Adjacent to the Prudential Center, the 150-room hotel includes 14,000 square feet • of street-level retail; last November, it was announced that Joe’s Crab Shack would • occupy nearly 5,400 square feet. • The development project generated an estimated 175 construction jobs and will • create between 50-75 permanent jobs through the hotel and retail operations.

  6. Courtyard by Marriott Newark Downtown • Financing Sources *State Pension Fund

  7. Courtyard by Marriott Newark Downtown • Based on the expected generation of $28.5 million of incremental direct annual • gross income, hotel occupancy and sales taxes over 20 years, and a 75% rebate of • eligible taxes, there were deemed to be adequate funds to support the • reimbursement of taxes to the project. • Present value of the Net Positive Benefit to the State totals $19.45 million.

  8. Teachers Village • RBH Group is developing this $149 million retail, educational and residential project • in downtown Newark, which will include 205 residential units, pre-marketed to • Newark teachers; three charter schools and a daycare facility totaling 100,000 • square feet; and, more than 20 on-street retail establishments. • The first phase of a larger development, Teachers Village will result in an estimated • 450 construction jobs and 460 new permanent jobs. • The project was financed through a complex series of public and private • investments that helped get major financial institutions to back the project after • more than three years of negotiations.

  9. Teachers Village • Financing Sources

  10. Teachers Village • Although the potential returns appear to be below market-acceptable levels, RBH • Group expressed a willingness to move forward because Teachers Village is the first • phase of additional development the company plans as part of the overall SoMa • Newark redevelopment plan. • In addition to the project site, RBH owns 5.9 million square feet of adjacent land, • representing approximately $100 million in land purchased. RBH expects to make • significant progress on additional phases in the next five to seven years, with the • entire plan executed in the next 10 to 12 years. • Present value of the Net Positive Benefit to the State totals $7.4 million.

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