KEYPORT – A public hearing on a proposed ordinance that will extend a financial agreement between Keyport officials and the operator of a senior apartment complex has been scheduled for Sept. 20.
If the ordinance is adopted by the members of the Borough Council, the legislation will authorize a seven-year extension to an existing financial agreement between Keyport and Bethany Manor Urban Renewal, LLC (MUR).
Bethany MUR is the owner of Bethany Manor, a 331-unit apartment complex for senior citizens on Broad Street.
The ordinance was introduced by council members in July and the public hearing was scheduled for Aug. 15.
During their Aug. 15 meeting, council members voted to table the public hearing to Sept. 20. The governing body may adopt the ordinance following the public hearing.
According to the ordinance, borough officials approved the financial agreement with the apartment complex’s original owner in 2015. The council’s action consolidated two financial agreements into one agreement for a payment in lieu of taxes (PILOT) in connection with the rehabilitation of Bethany Manor.
In a PILOT agreement, 95% of a developer’s annual payment goes to the municipality and 5% goes to the county. No money from the PILOT is provided to other entities (i.e., a school district).
Under state law, only the surplus of the developer’s annual payments under a PILOT can be provided to other entities such as a board of education.
Provided in the agreement is an annual service charge paid for the properties in lieu of taxes. According to the ordinance, the annual service charge is equivalent to 10.5% of annual gross shelter rents for the rental units at Bethany Manor.
Borough officials supported the transfer of Bethany Manor to Bethany MUR in 2021, according to the ordinance.
Bethany MUR is in the process of entering into a new mortgage with the U.S. Department of Housing and Urban Development (HUD) for financing of the property for a 35-year term. As a condition of the financing, HUD requires a tax exemption of the property to remain in effect for the entirety of the mortgage term.
The current term of Bethany MUR’s agreement with Keyport is scheduled to end in 2050, which is 28 years away from 2022 and seven years short of the 35 years required by HUD, according to the ordinance.
The seven-year extension to the PILOT that will be under consideration on Sept. 20 is intended to allow the financing for Bethany Manor to meet the HUD requirements.