The “User Friendly Budget”, part 5 & Tax Abatements 701 – Abatement disclosures in the UFB

Note: the visualizations below are best viewed on a computer or tablet (vs a phone).

Jersey City recently announced it was terminating an abatement on four buildings within the Beacon complex. The reason: “ownership defaulted on an obligation to retain and present employee records, city officials announced.” This is a good reminder that abatements are contracts, and there are terms within each that require compliance. In light of this update, I thought it would be interesting to share another post from my “User Friendly Budget” series: the “UFB-6 Tax Abatements” tab. This post is part of my “User Friendly Budget” series but the visualization below contains Jersey City data only.

Some upfront context: the User Friendly Budget data is relatively new for reporting purposes; it debuted as a budgeting document in 2015 (you can read more about the UFB and it’s introduction here).

The User Friendly Budget contains more data about abatements than the typical budget file. The UFB contains, in Tab 6:

The name of the abatement.
The type of project.
PILOT billing amount — how much the project paid to the city in the form of PILOT (payments in lieu of taxes) fees
Assessed Value — in Jersey City, this value is current as of 2018. “Assessed” value is a static value that typically only gets updated in a citywide revaluation.
Taxes if Bill in Full at 2019 Tax Rate — this is the “Assessed” value times the 2019 tax rate.

Here’s what this data looks like in the Excel / PDF file on the city website (visually not that interesting…but rich with data):

I should note: the data contained in the UFB is bare minimum information about these contracts. More information would be useful for additional, more nuanced analysis. For instance, every abatement has a start date and an end date. With that data, we could see what abatements are expiring when, and the related impact of real estate that is converting from a PILOT-paradigm to a conventional tax paradigm. Consider: when an abatement expires, it (a) stops paying PILOT fees and (b) starts paying conventional property tax. This has an impact on city PILOT fees (a line item in the budgeted revenues), city property tax, and school property tax.

For now — I’ll share FYIs and observations on the data.

Jersey City’s User Friendly Budget is located here (this is a PDF file which you can scroll through until you get to a sheet called “UFB 6 – Tax Abatements”)
These are long-term (10 to 30 years in duration) abatements only.
There are three “project types”: (A) Affordable Housing, (B) Commercial/Industrial, and (C) Other. You can filter one or more of these categories to see the drill-down details. These categories are assigned and maintained by the city.
These are interactive visualizations – filter, sort, etc to get the best view based on your interests.

Visualization #1 – Abatement Type

The visualization below shows that the “Other” category of abatements is the largest in terms of assessed size. Specifically, $10.9 billion (88%) of Jersey City real estate (assessed value as of 2018) is subject to “other” abatements, $1 billion (9%) of real estate is subject to commercial/industrial abatements, and $431 million (3%) of real estate is subject to affordable housing abatements. You can use visualizations #2 and #3 to glean insight into the details of each category. For instance, the largest “Other” category abatements are the PATH ($531 million assessed value) followed by K Hovnanian at 77 Hudson ($442 million assessed value), followed by Liberty Harbor North ($372 million assessed value).

Visualization #2 – Abatements Ranked by 2018 Assessed Value

Next, let’s look at what abatements are contained within each category, and how large each project’s assessed value. The visualization below ranks each project by assessed value (again, in Jersey City, the assessed value is based on 2018 valuations). You can filter by project type to drill into, for instance, that big bucket called “Other”. You can also search by wildcard; simply type a term into the box and it will do a key-word search using the “Project Name” field.