Jersey City Medical Center and Kushner Real Estate may provide a significant chunk of new revenue that the city will use to help balance its next budget and keep property taxes at a minimum. Ward E Councilman James Solomon says he’ll be a no-vote.
The city is using $26.75 million in revenue generated from the sale of municipal land to the medical center in its next budget, according to the Finance Department.
Meanwhile, the Jersey City Redevelopment Agency has named KRE JCMC Holdings, LLC as the “redeveloper” of the medical center’s newly acquired land for three mixed-use high rises with some floor space reserved for medical purposes.
It’s not immediately clear if money is being exchanged between the medical center and KRE.
Municipal land sale proceeds are often viewed as “one-shot revenue” for cities because those transactions can’t necessarily be duplicated year after year. Because it can’t be duplicated each year, municipalities are forced in future years to cut expenses or find other revenue sources to make up that deficit, including raising taxes…
Marc Pfeiffer, a retired longtime New Jersey local government administrator and now senior policy fellow at Rutger’s School of Planning and Policy, confirmed how municipalities use of land sale revenue to balance budgets “is not uncommon.”
“It doesn’t make it a great practice, but it’s often necessary to meet competing demands,” said Pfeiffer, one being “sometimes” an interest from officials in keeping taxes low.
He agreed that it’s best if land sale revenues are used to cover “one-time expenses” like a capital project, though ultimately municipalities should strive to strike “a reasonable balance” between cuts, tax hikes and one-shot revenues to avert a “deep hole” in the future.