Council tables tax deal with university
CALIFORNIA – California Borough Counci,l at the advice of its solicitor, tabled approval of a contract with California University that includes an agreement to accept a payment in lieu of real estate taxes for the construction of a new housing facility. Solicitor Keith Melenyzer told the board Thursday during a continued regular meeting that he “has not been able to come up with anything that is acceptable to the borough,” in negotiating an agreement with California University and Students Association Inc (SAI), a non-profit organization affiliated with the university.
The agreement would allow SAI to build Phase II of Jefferson at California without paying real estate taxes and set up a payment-in-lieu-of-tax agreement similar to that made in 2000 for the construction of Phase I of that project.
Melenyzer told the board members they could vote on a “tentative agreement on the table,” but he advised against it.
The board unanimously voted to table the action.
Following the meeting, Melenyzer said he advised council against accepting the tentative agreement because he has learned of the university’s long-range plans for additional building projects on campus.
He said he could not be specific about what those projects were or when they were planned, but he said he would like to see the borough set up “similar programs (payment in lieu of taxes)” for those projects as well.
The board also voted to table a motion to approve site plans for Phase II of the Jefferson at California project. That motion, proposed by Councilman John Greenlief, passed on a 4-to-2 vote with President Arthur Harris and John Difilippo voting no. Councilman John Mariscotti was absent from the meeting.
After the meeting, Greenlief would give no reason for moving to table action on the site plans.
Melenyzer said, to the best of his knowledge, the site plans did meet borough requirements.
Greenlief was also the only councilman to vote no on a motion to approve a Student Association Inc. subdivision for the project.
Ex-councilman Nick Caruso thanked the board for tabling the agreement with Cal U. Caruso was escorted out of a meeting earlier this month when he voiced his opposition to the borough council’s decision to enter into an agreement with Cal U, permitting a payment in lieu of real estate taxes.
He questioned the board on a private meeting held with Cal U officials to discuss the agreement. Council has still not publicly released the terms of the tentative agreement that they planned to vote on last night.
In 2000, the board entered into a similar agreement with SAI for the construction of Jefferson at California to receive $2.2 million over 30 years on property that Melenyzer says was not previously on the tax rolls. For Phase I and now for Phase II of Jefferson at California, SAI has entered into a public/private partnership with JPI Inc., a private, for-profit corporation from Texas to build the facility.
Caruso and a group of other citizens had a hard time understanding the public/private partnership and how it could fall under tax exemption.
But Melenyzer said the private corporation constructing the building is able to profit from their construction and that it happens all the time. But he said that does not take away SAI’s nonprofit status.
Caruso urged the board to “think ahead” before they sign the contract for Phase II of Jefferson at California.
Caruso asked the borough officials to bring in an independent solicitor to find how much tax dollars are going to be lost and to look at the borough and the university to find a fair price on capital improvements.
Caruso grew emotional as he told council members they are “making the poor poorer” by allowing the university to build in the borough without having to pay property taxes. He said they are “not helping the town in any way” by doing that.
“When you give land away, which some of you are experts at, think of the taxpayers and what will be just for both parties.”
” Think ahead before you give your town away and don’t over burden your young families and older citizens…”
Melenyzer told Caruso that it is “easy to sit out there and judge (council) but there is not much the board can do because SAI, is, by federal law, considered a nonprofit organization.”
Melenyzer said he is not in favor of what SAI is doing to the community.
Following the meeting, he said the borough and SAI do not have a healthy relationship and that citizens are legitimately complaining that there is only limited property in the borough that can be taxed and SAI is “gobbling it up.”
But he told an emotional Caruso there is nothing the borough or anybody else can do about it because SAI is a non profit organization and the borough is lucky to be getting a payment in place of taxes.
“There are two roads. One’s a dead end and the other has some money for the borough,” Melenyzer said. “SAI is a non-profit organization. You can’t change it. I can’t change it. The borough can’t change it, and right now, God can’t change it.”