Bergenfield tax do-over

Saturday, July 11, 2009
BY ASHLEY KINDERGAN AND DAVE SHEINGOLD
NorthJersey.com
STAFF WRITERS

BERGENFIELD – Homeowners who took the brunt of enormous property tax increases — nearly 30 percent — that followed a revaluation four years ago are about to get relief from a do-over.

But the tax breaks for homeowners in the southwest area of town won't come without a price. The owners of commercial properties, already hurting because of the recession, could make up the difference with double-digit hikes in many cases.

A 2005 revaluation sent property taxes soaring for homeowners west of Woodbine Avenue and south of Halberg Avenue and Whitman Street, largely an area of Cape Cod-style homes. A $590,000 second revaluation taking effect this year will reverse those increases and even reduce taxes for many homes in the area, a Record analysis shows.

Mayor Timothy Driscoll said the borough had no choice but to try again.

“It was unjustified,” Driscoll said of the first revaluation. “What we have now is, we believe, a reasonable revaluation.”

David Schild is a southwest resident who was hit particularly hard. His property's value tripled to $617,500 in 2005, bringing with it a 69 percent tax hike. This year, his assessment dropped by nearly $30,000.

The Record's estimates, assuming a 4 percent increase in the municipal tax levy which is the state cap, show his taxes could fall by about 10 percent as a result.

“I'm just pleased that maybe they realized they made an error,” said the Westminster Avenue resident. “It was a huge, huge increase.”

Westview Drive resident Georgia Haring could also see a 10 percent tax bill drop after receiving a 24 percent hike after the first reassessment.

“I live within my means, but even with that, it hurts,” Haring said. “I had two daughters going to college for the one year and I had to seek some help from my father.”

Nearly two-thirds of the homes in the southwest corner decreased in value after the latest reassessment, with the median residential property value falling by about 5.5 percent. The median residential value elsewhere rose by about 7.8 percent.

The southwest's drop corrects disproportionate hikes from the first revaluation, officials and residents say.

In 2005, the typical southwest assessment rose 128 percent, compared to 90 percent for all other homeowners. That led to a 29 percent jump in the typical tax bill in the southwest area, compared to a 7 percent rise for other homeowners.

The state eventually recommended another assessment in a 2006 report.

But commercial property owners who could face up to a median 32 percent tax hike are not as enthused. Downtown merchants who own their buildings said they are especially worried about how to cope with the increase in a stalled economy.

Fanny Lin is the manager at her family's business, No. 1 Chinese Restaurant on South Washington Avenue, which could see a 22 percent tax hike after the property's value increased 29 percent.

Lin said her family has already laid off part-time workers to stay afloat.

“It's kind of tough because this year the economy is going down, and our business wasn't that good,” Lin said. “If the property tax keeps going up, we can't afford that too much.”

The borough's tax assessor and the company that performed the second revaluation said commercial properties were undervalued the first time and that the latest reassessment brings them up to market value. The state report concurred, saying that commercial properties were valued at 60 percent of their real worth the first time.

“These commercial properties weren't being picked on by any means,” said Rick Del Guercio, president of Appraisal Systems, the company that performed the most recent revaluation. “I have plenty of data to prove that these things were undervalued.”

Del Guercio said the latest assessments considered market conditions in October 2008, after residential property values had dropped from their high levels during the first revaluation.

Even business owners who don't own properties could be affected by higher rents. Some renters, such as James Chaiken, the owner of the Main Friendly Service Station, pay property taxes as part of their leases.

The assessment on Chaiken's East Main Street property increased by 28.2 percent this year, which could result in a tax increase of 21 percent or $13,000. He is appealing.

“My land is a known contaminated waste site,” Chaiken said. “This land is not worth $500,000. Nobody can come here and build on it.”

Special Improvement District Director Don Smartt said that he hasn't heard a major outcry from merchants, but thinks the impact will vary depending on the health of individual businesses.

“If they're in a business that's being hit hard by the marketplace, such as a real estate office… they're going to, I think, be really squeezed,” Smartt said. “But there are other businesses — service businesses — that have not felt perhaps the depth of the economic challenges, and they, I think, will be able to absorb it.”

Forty-six commercial property owners have appealed their assessments. About 122 residential owners – or 2 percent – appealed, according to borough records.

Joseph Pojanowski, the attorney handling the tax appeals, said that 27 appeals were withdrawn during hearings at the County Board of Taxation in the last two weeks.

The borough set aside about $190,000 for tax appeals this year, said Tax Collector and Chief Financial Officer Alice Czykier. Successful appellants will receive credits on their fourth quarter tax bills and additional refunds if necessary, she said.

Some residents say the second assessment wasn't worth the money spent on the appraisal and the resulting appeals, especially because of the impact on commercial properties.

“The new reval never should have been done,” said resident Diana Flagg. “Our commercial district has been falling apart for years, and this will be just another nail in their coffin.”