Re-evaluation of tax assessment could kill Manhattan Beach project


SOUTH AMBOY — The significant fluctuations in the property tax bill for the Manhattan Beach property has caused some disagreements among council members in South Amboy.

The issue was discussed at both the March 1 and 15 City Council meetings, prompted by a request for the council to draft and approve a resolution supporting a revised valuation of the waterfront property slated for residential development. Sherman Financial Group purchased the property in 2014 for about $32 million, Business Administrator Camille Tooker said.

The Manhattan Beach property, which consists of two lots, was collectively assessed at $4.7 million in 2015. After that assessment, Sherman Financial Group realized it needed an additional strip of land from Amboy Aggregates. Amboy Aggregates and Sherman could not agree on a price, so instead Amboy Aggregates donated the property to the city for the tax benefit, Tooker explained, and Sherman purchased the additional land from the city for $1.

That transaction though, when submitted to the tax assessor’s office, was interpreted tax-wise as the creation of the subdivision of the entire property with all of the needed approvals from the Planning Board to start building on the site, Tooker said. However, there is only a redevelopment agreement in place, which creates maximums for what is allowed on the site. Based on the interpretation of the property being subdivided, the city tax assessor then reassessed the property at $33 million for 2016.

Sherman, Tooker said, missed the appeal period and paid the taxes on that amount for 2016, which came to around $800,000. However, Sherman gathered some comparables to show to the tax assessor’s office, and the tax assessor adjusted the valuation for 2017 to $10 million.

As part of the agreement with Sherman, the city, school, the county and other entities will be allowed to keep the tax revenue for 2016 — of the approximately $800,000 it paid last year, the city received about $400,000.

However, the difference in the amounts, and what factors drove those figures, is not sitting well with two councilmen. At the March 1 meeting, Councilmen Tom Reilly and Brian McLaughlin said they would rather the city do an independent appraisal to have a better understanding of how much the property is worth. Reilly said he disagreed with the 2017 figure because there may be monetary value in the presence of a redevelopment agreement on the property.

Reilly also said he took issue with the council being asked to support something in which it had no say.

McLaughlin said after both meetings that he is against the revised amount, as well as the entire Manhattan Beach project.

“Until it’s assessed properly or we get another appraisal done, I’m against the reduction,” he said.

Tooker cautioned that if the city did not support the reassessment, Sherman would likely sue. After both meetings, she said the city also would not collect anything on the property during that process, and what could ultimately happen was the death of the entire Manhattan Beach deal.

She also pointed out that the 2017 assessment is still higher than the 2015 one.

Reilly has since said he has spoken with the tax assessor and still does not feel the matter was handled correctly. He said it is the council’s responsibility to taxpayers to do its homework on these kinds of issues.

“It just really bothered me,” he said of his conversation with the tax assessor. “We could be at a loss of a lot of money,” he said.

Tooker said the council does not need to approve a resolution.

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