New twists in controversial tax break for Camden project

The Broadway Townhouse Apartments ' PILOT, or payment in lieu of taxes, is back on the table.
The Broadway Townhouse Apartments ' PILOT, or payment in lieu of taxes, is back on the table. (MICHAEL S. WIRTZ / Staff Photographer)
Posted: April 01, 2014

CAMDEN At a noon meeting in April last year, City Council voted to approve a contentious 20-year tax abatement for a landlord to enable renovations at a crumbling subsidized-housing development on South Broadway.

Notice of the meeting was sent to the Courier-Post too late and never appeared, violating the state's open public meetings law.

Citing that procedural flaw, a Superior Court judge on Wednesday voided the ordinance and ordered Council to hold a hearing Tuesday to give the public an opportunity to comment followed by a second Council vote on the PILOT, or payment in lieu of taxes.

The complaint was brought by Colandus "Kelly" Francis, a longtime activist and president of the county NAACP, who also argued that the PILOT was "arbitrary, capricious, and unreasonable," saying it robs the city of a needed tax base, funnels no money into schools, and "lets a millionaire profit off of children and families."

"It is as if the children in the families occupying Broadway Townhouses only exist to form a family unit so the owner can make a profit, but do not exist for the purpose of calculating how much should be paid to educate those children," Francis wrote.

Council, which voted, 6-1, in favor of the ordinance last year, is expected to pass it again.

But in a move that makes the case even more confusing, owner Israel Roizman of Roizman Development said Friday he had not accepted the PILOT he asked the city for.

Roizman said in April he needed the abatement - along with a 20-year Section 8 housing designation from HUD, which guarantees federal rent subsidies - to renovate the badly deteriorated 175 Broadway Townhouses at a cost of $100,000 per unit. He was approved for both and in February secured a $13.4 million state Economic Development Authority grant.

In a brief phone interview Friday, Roizman said that though the city passed the ordinance for the PILOT, he never accepted it.

"They approved the tax abatement, but we did not accept. We did not follow up to complete the paperwork. We changed our mind," he said.

He would not say what changed his mind, but he did say that the decision was not necessarily final and that renovations would go ahead as planned. "They're still talking to me, and they still want me to proceed" with the PILOT, Roizman said.

Under the agreement, based on 2012 tax rates, the city would receive $177,324 and the county $9,332 per year - far less than the total real estate tax bill of $407,669, including for schools, that ordinarily would be due.

Roizman's statement elicited surprise and laughter from Francis on Friday.

"What he says and what he puts in writing are two different things," Francis said.

Assistant City Attorney Jason Asuncion said, "I can't speak to the applicant's position."

In Camden, one of the poorest cities in the nation, more than 52 percent of properties are tax-exempt, and state aid provides nearly 70 percent of the budget. Education and medical centers do not pay the regular tax rate, nor do the many nonprofit groups and churches in the city. So, to bring in developers and businesses, the city often relies on PILOT agreements. It currently has 36 such agreements, according to this year's budget.

Before Superior Court Judge Lee Solomon on Wednesday, Asuncion defended the PILOT's benefits to the city, which also include a $300,000 bonus and an "eye in the sky" security camera that Roizman paid for. A fiscal-impact study predicted the renovations would translate to $4.7 million in earnings among county businesses and employees and creation of 92 jobs, 68 of them in construction, Asuncion said, not to mention the needed upgrades.

"We have to deal with folks who reside in the city. They shouldn't be living in squalor," Asuncion said.

Solomon questioned whether any other developers were willing to do similar work at a lesser cost. Neither Francis nor Asuncion could name one.

Solomon did not rule on whether the passage of the PILOT was "arbitrary and capricious," pending the second vote on Tuesday, but warned Francis the burden of proof was rigorous to overturn a municipal decision.

In 1992, Roizman promised renters in his Camden Townhouses development $1 ownership of their units after 15 years of renting.

With no contract ever drawn up to seal the deal and money troubles down the road, the vow went unrealized, and most tenants left disheartened.

Asuncion said Roizman had since been a good partner to Camden.

"Can't the developer learn a lesson and comply with the law and do good things moving forward?" Asuncion asked after the hearing. "I think we have to be forgiving."

Roizman said renovations to Broadway Townhouses would start in two weeks, during which time the company will pay for relocating tenants and storing their belongings.

Residents in the development's Lanning Square neighborhood say they have been told four times upgrades were coming to the narrow, two-story, three- and four-bedroom dwellings, each with a signature brown door.

In Janice Smalls' townhouse on South Broadway, a toilet upstairs still leaks into the living room below, the front door has to be duct-taped closed, and a railing dangles off the wall of a steep stairwell.

"I got tired of complaining," said Smalls, who said she had paid out of her own pocket to patch ceiling holes and apply fresh paint.

Lillian McIver moved in when the development was built and her granddaughter Myeshia was 3 years old. Now, Myeshia has a 5-week-old baby.

"When we first moved in, it was nice," Lillian McIver said, adding that there were waiting lists to get in.

Myeshia chimed in as she patted her infant daughter sleeping on her chest.

"When you look at the whole city, this neighborhood isn't bad. It's nice-size houses, it's a good neighborhood, it's just, nothing's changed in 27 years."


jterruso@phillynews.com

856-779-3876 @juliaterruso

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