Passaic Approves Tax Incentives for Downtown Revitalization After Devastating Fires
Passaic city officials have passed two ordinances that will provide tax incentives to businesses aiming to revitalize downtown properties that were severely damaged by fires. These efforts are aimed at attracting developers and bringing jobs back to the area. The city’s tax abatement programs have proven to be successful in making blighted areas more appealing for redevelopment.
Two properties that were once home to businesses damaged by fires, occurring 38 years apart, are the focus of these tax incentives. The City Council has approved a 30-year tax abatement deal for an Eighth Street warehouse that was devastated by the Labor Day Fire in 1985. Additionally, a similar deal has been approved for Atlantic Coast Fiber to rebuild a recycling center on Seventh Street. The original recycling facility was destroyed by a fire in 2021.
These payment-in-lieu-of-taxes (PILOT) deals aim to foster redevelopment in the city. Passaic has already granted such deals to six properties, signaling the success of this approach. Under these agreements, developers receive exemptions from traditional property taxes for a specific period of time to encourage improvements to blighted properties. Instead of property taxes, developers make annual payments to the municipality, which may be lower than traditional tax payments.
It is important to note that the tax abatement deal only applies to the value of the structure, while the land will still be taxed at the full rate. Mayor Hector Lora’s administration strongly supports the use of tax abatement deals as they have been instrumental in attracting over $100 million in investments downtown. Mayor Lora emphasizes that these projects are not only beneficial to business owners but also contribute to the overall development and prosperity of the community.
Council members are particularly pleased with the success witnessed on Passaic’s Eastside, the area situated between Route 21 and the Passaic River. Currently, the final 17 acres of the 22-acre Eighth Street site, which had remained largely vacant since the 1985 fire, are being developed. Stonemont Financial Group, a private real estate company based in Atlanta, has purchased the property and construction work is already underway to build a warehouse.
Atlantic Coast Fibers’ recycling plant on Seventh Street has been razed after the fire. The recycling firm plans to invest over $28 million to rebuild on the 5.5-acre property, along with an additional $20 million in recycling equipment. The new facility is expected to employ between 120 and 130 people once operational in March of next year.
However, some council members have raised questions regarding granting tax abatements to companies that have already decided to rebuild in the city, like Atlantic Coast Fibers. Mayor Lora, in response, maintains that supporting responsible and appropriate development is crucial for the city’s growth and encourages a positive environment for investors and business owners.
The fact that Passaic is a former Abbott district plays a role in these tax incentives. Unlike many municipalities, Passaic’s schools rely on local property taxes for only about 15% of their budget. The city’s school levy is comparable to that of the smaller Totowa.
The tax incentives approved in Passaic are another step towards the city’s ongoing efforts to revitalize its downtown area and attract investments. These strategies are proving effective in transforming blighted areas into thriving business hubs, while providing employment opportunities for the local community. The success of tax abatement programs is a testament to Passaic’s commitment to fostering responsible and beneficial development, ultimately benefiting both residents and investors.
