January 26, 2009
 | ROONEY ASKS CORZINE FOR EXECUTIVE ORDER |
In response to Governor Jon Corzine’s call for a 12-month moratorium on the 2.5 percent Council on Affordable Housing (COAH) development fee, Assemblyman John Rooney today asked the governor to make the delay official by issuing an Executive Order.
In a letter to the governor, Rooney, R-Bergen, said there appears to be mounting confusion as to whether or not the assessment should be collected since there has been “no official documentation to provide guidance to municipal officials charged with collecting the fee.”
Most of the fees at issue are being imposed on developments that had been planned, approved, and constructed years before the legislation was enacted on July 17, 2008. The law bases the fee on receipt of a final certificate of occupancy (CO), not on completion of the project.
One such project in Rooney’s home town of Northvale was completed almost two years ago. Since units must be rented or leased prior to the issuance of the final CO and the developer didn’t receive his CO before enactment of the new law, he is now subject to hundreds of thousands of dollars in fees. Another developer was denied a final approval for almost a year due to a delay in completing landscaping. Having chosen “seed” instead of “sod,” he was told by a county permitting official that he (the official) needed to “see the grass grow” prior to the developer receiving his CO. He too is now subject to the new fee.
Rooney, noting that the tax has had a chilling effect on commercial development, added that municipalities should not be responsible for replacing lost revenue from the fee during the moratorium.
See letter below:
Hon. Jon S. Corzine
Governor, State of New Jersey
P.O. Box One
Trenton, New Jersey 08625-0001
Dear Governor Corzine:
I appreciate your concern regarding New Jersey’s failing economy by placing a 12-month moratorium on the COAH development fee. The fee has had a chilling effect on commercial development. Considering the current dismal state of the real estate market, this costly State-imposed assessment should be waived, and, frankly, should never have been enacted in the first place.
Since the law bases the fee on the receipt of a final certificate of occupancy (CO) and not on completion of the project, most of the fees at issue are being imposed on developments that had been planned, approved, and constructed years before A-500 was enacted into law on July 17, 2008. As a result, this is creating severe fiscal hardships for numerous developers.
Two such examples of the negative impact the new fee is having on developers can be found in my hometown of Northvale. One project was completed almost two years ago. However, since units must be rented or leased prior to the issuance of the final CO and the developer didn’t receive his CO before enactment of the new law, he is now subject to hundreds of thousands of dollars in fees. Another developer was denied a final approval for almost a year due to a delay in completing landscaping. Having chosen “seed” instead of “sod,” he was told by the county permitting official he (the official) needed to “see the grass grow” prior to the developer receiving his CO. That developer is also now subject to the new fee.
Unfortunately, two weeks after your announcement of this moratorium, there is no official documentation to provide guidance to municipal officials charged with collecting this onerous fee. There appears to be growing confusion as to whether or not the
assessment should continue to be collected. As a result, I am asking you to immediately issue an Executive Order to officially impose the moratorium.
I also believe that during this yearlong moratorium, municipalities should not have to pick up the lost revenue from the development fee.
Any immediate actions that you can take to resolve this issue would be greatly appreciated. Thank you for your consideration in this matter. I look forward to hearing from you.
Sincerely,
John Rooney
Assemblyman
39th Legislative District
