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Collingswood Mayor Defends 'Old' Zane School Sale, PILOT [Video]

In his video blog, Collingswood Mayor James Maley gives a walking tour of the property and explains the borough perspective on its sale to Kitchen & Associates.

Last week, with local architectural firm of Kitchen & Associates for the sale of the 'Old' Zane School, a building the firm had rented for the past 15 years.

Along with the sale, the municipal government also approved a 10-year PILOT (Payment In Lieu of Taxes) tax abatement for Kitchen & Associates. Under terms of the deal, Kitchen & Associates will pay about 30 percent of the assessed value of the property, ramping up to full assessment by the 2023.

Those conditions brought criticism from a handful of Patch readers last week, including resident Joseph Dinella, who sent along a letter to the editor:

PILOTs are the crack-cocaine of redevelopment. Developers NEED them to make the project work. To be fair, some tax incentive is reasonable to move a project along. But it is never the borough that takes the hit, it is always the schools. And other towns don't then borrow money to complete the project. So taxpayers lose twice: by paying as little more to lessen a corporate tax obligation and by paying debt service for something which is not for public use.

In response, Collingswood Mayor James Maley posted a video blog this week (click above to watch) in which he toured the facility and offered a response to some of those criticisms.

"Some people have already started throwing some stones; it's only been a few days," Maley said in the video. "And the stones they're throwing is that the tax assessment on this property is for $1 million more than what we're selling this property for.

"The sale of this property was based on an appraisal that was done of the property with the rates that we have given to Kitchen 15 years ago," he contined. "They're lower rates, they were intended to be lower rates in order to get them into this space. The appraisal puts this value at $699,000; we're selling it at $800[,000].

"This 800,000 sale will make us just 100,000 shy of recouping all of the 2.1 million that we invested into the rehabilitation of this property," Maley said in the video. "It's taken 15 years, and we are at that point now where we have recouped our money through the rental payments over time, and now with this sale, we're 100,000 shy. 

"The borough looks at this project as one that helps our cash flow moving forward, that repays the debt that we borrowed to do this property; it works for us in every way," he said.

In his video remarks, Maley also said that the PILOT agreement is "a recognition of the work that still has to be done to get this building to be completely and totally a Grade A office building.

"In the meantime...for the last 15 years, we've had a productive office building with 100 people working on the avenue, oriented to our businesses," he said. "This was done back in 1998; it's kind of no little bit of a coincidence that that's when our restaurant renaissance and really things on the Ave. really started coming into play because we had projects like this that brought people into the downtown on a regular, permanent basis."

Click below to read more about the sale of the 'Old' Zane School, reader objections, and our special, two-part examination of the impact of PILOT agreements in the borough:

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MJT530 February 14, 2013 at 08:40 PM
redrum - Excuses...they had things like newspapers. Its too late to do anything but yet things keep happening. You make no sense. If you don't like it here...there is the door. I won't let it hit you in the keester on your way to wherever you think is better than good old Collingswood.
Porterincollingswood February 14, 2013 at 08:48 PM
Why waste your time? His stuff is clearly agenda-driven, you can tell by his most recent nonsense-post and the way he closes it (on a day the Dow continues to hover around 14,000...Lenin would be proud). Here's what's happened - a bunch of people who love to whine and complain about the borough needing to get out of the real estate business...are whining and complaining about the borough getting out of the real estate business. Because this is 100% personal with them. FUN FACT: This deal was founded on the very pro-business, trickle-down philosophies they criticize Obama for NOT employing. We're left to marvel at both sets of contradictions.
redrum February 14, 2013 at 10:30 PM
mjt - just because I don't believe in liberal politics doesn't mean I don't enjoy Colls. Its the fact that I have to pay higher taxes so businesses can get tax breaks. the mayor uses the same excuse again and again that somehow he created all those jobs all by himself, and that all those workers spend all their money in Collingswood and nowhere else; and that all that revenue more than made up for the taxes that were never charged or collected. So I put it to you again, did Kitchen and Assoc. pay ANY taxes during those 15 years? I pay $7,200 for a property worth $225,000. Multiply that by 15 years and you get $10,800 in taxes. That's alot of money. What if the town had sold the property, a company came in, tore it down, and built a modern day office building or apartments?
MJT530 February 14, 2013 at 10:52 PM
Thanks @ porterincollingswood
Interested Bystander February 17, 2013 at 12:14 PM
??...nobody who rents ever pays taxes, so what's the beef? The town took over the building and owned it - you don't pay taxes to yourself.

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