Developer predicts $2.8 million tax boost from Cranford project

Photo via Cranford township video
James Rhatican, vice president of land use and development for Hartz Mountain Industries, left, gestures toward resident James Carvalho at the Jan. 31 Cranford Planning Board meeting.

CRANFORD, NJ — A 905-unit apartment complex at 750 Walnut Avenue on the Clark border would create about $2.8 million in net tax revenue for the township each year, according to a fiscal impact analysis by the developer.

Keenan Hughes, a planner for Hartz Mountain Industries, testified at the Jan. 30 Planning Board meeting that the proposed development would generate about a $660,000 in net tax revenue for the municipal budget and a net of about $2.2 million for the school district.
Compared with the $1.1 million in taxes the mostly empty commercial complex currently generates each year, Hughes characterized the revenue hike as “a pretty significant increase.”

Hughes closed Hartz Mountain’s presentation of its case, which was initially introduced to borough officials in July 2017. James Rhatican, vice president of land use and development for Hartz Mountain, told board members at the conclusion of the meeting that he didn’t have any more experts to call. An architect, traffic engineer, commercial real estate market expert and others have testified since May for the developer’s application to have the area rezoned from commercial to residential.

One lingering question during the process has been how the project would affect the municipality of about 25,000 residents in terms of dollars and cents. Several residents have questioned the project’s impact on the infrastructure and services, including on schools, roads, police and other utilities.
Hughes said he calculated the net positive tax revenue by first establishing the market value for the project. Using a variety of factors and assuming a 5 percent vacancy in the complex at all times, he came up with a $290 million total market value.

The assessed value of the project at its completion is approximately $105.9 million, which goes into the township’s tax base.
To project the tax revenues that would be generated, Hughes said he utilized Cranford’s 2018 property tax rate, which “includes the municipal general purpose property tax, the municipal library tax, the school district property tax and then also the county tax.

“If you run that anticipated value through the current tax rate, the revenues at full buildout total approximately $6.78 million, of which $1.57 million would be allocated to the municipal and approximately $3.7 million would be allocated to the school district,” he said.
The final part of the analysis took into account what Hughes termed “the demographic impact.”

He used census data to look at how many people live in similar apartment complexes in Cranford, Berkeley Heights, New Providence, Springfield, Mountainside and parts of Scotch Plains and Westfield. Based on that information, he projected that the complex would house about 1,622 people. Hughes employed two separate studies; one showed the complex would house about 110 public school children, the other showed it would be house about 152 school-aged children.

Finally, Hughes estimated the yearly cost to provide services such as public safety, health and welfare and construction code issues to the residents of the proposed complex at about $562 per resident.

The cost to taxpayers for each new public school student would be an additional $14,749 a year.
The bottom line, he said, is that the project would create about a $2.8 million in net positive tax revenue for the township each year.
Some board members and residents, however, questioned the numbers. Board member Peter Taylor asked if the increase would require a new school to be built.

“How can you say then that the numbers would be equal?” Taylor asked.
Hughes responded that “if there is a significant capital investment that has to be made, whether it’s a school or something else, or there’s some bonding that has to take place, that’s all sort of subsumed within that per-capita cost.”

He added that, to his knowledge, “there’s nothing we have come across that would present that situation.”
Board member Julie Didzbalis later pressed Hughes on whether the influx of school-aged students would necessitate the construction of another school.

“Based on the data I’ve seen, again we’re talking about a range of 110 to 135 public school students at full buildout,” Hughes said. “Those students will be distributed throughout the system and that population will sort of gradually develop or grow over time. So, they’re not going to hit all at once.
“They’re not going to hit one specific grade or grouping of grades, and the date I’ve seen in the demographic study did not indicate any glaring need for, for example, building a brand new school. That was my conclusion.”

Later in the meeting resident James Carvalho and Rhatican had a contentious exchange as Carvalho attempted to ask a question about Hartz Mountain’s initial application.

Standing almost shoulder to shoulder at the lectern in front of the board, Carvalho lashed out at Rhatican.
“I know this is humorous to you, but you’re making an application for this board that is supposedly representing … So why are you smirking and smiling when I …” Carvalho said.

“Your tone and attitude frankly,” Rhatican began to reply.
“You’re going to wave your finger at me?” Carvalho said, his voice rising. “You’re going to wave your finger at the person who pays the taxes in this town? “

Board attorney Mark Rothman restored order, but Carvalho later raised his voice again, accusing board member Dan Aschenbach, a former mayor, of smirking at him.

Hartz Mountain’s application to have the land rezoned so it can raze a large commercial building and construct three, five-story buildings and two, four-story buildings on the site will be heard again at the board’s Feb. 20 meeting.

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