Hopatcong Lake Regional News reader Michele Guttenberger has submitted the folowing article as "Your Opinion" on our site. As a courtesy to our site members, we always support your ability to voice your opinion. In this article she asks the question. Where is the rate of return?
From Michele Guttenberger: Hopatcong Resident for 35+ years
Hopatcong Taxpayer must acknowledge the cause of Hopatcong's blight was brought on by the aggressive participation in the Highlands Act. Hopatcong permanently sold off large future building development tax ratables to open space and parks recreation programs. One of the largest land deed holders is a billionaire who acquired over 1.000 acres of Hopatcong Borough land to incorporate it as capital asset of his Global enterprise -IAT Reinsurance ltd. This type of acquisition brought no healthy business commerce to bolster Hopatcong’s scant business economy. It was Hopatcong that helped to orchestrate the devaluation of large tracks of land into these programs which would receive NJ qualified farmland tax exemptions under tax levied funded programs for future preservation. Hopatcong did not make adjustments to its budget spending to realize future tax revenue permanently lost. Qualified Farmland pays out approximately 20% of each real estate tax dollar. Also, the real estate assessment value is drastically reduced on this property. This impacts the real estate market value of its neighborhood when adjacent land has been permanently zoned as non-business/residential development property. Commercial investors like to know there is room for expansion. Hopatcong has 35 percent of its land permanently zoned as open space and farm preservation land. All this is permanently lost tax ratables that were instituted through a state government program. Two detrimental things happened with preservation grant programs- the property assessments of this land was devalued and Hopatcong Borough lost tax revenue.
Hopatcong’s answer to meeting its tax revenue needs was to reassess all taxable properties and adjust the tax rate. To prevent tax appeals prompted by real estate market price downturns, the assessment value was substantially lower from the previous Borough assessment. Doing this reassessment exercise when the real estate market was at a record low put many new mortgage homes/businesses underwater. Hopatcong homeowners and small business owners who struggled to the make mortgage payments to a building that had negative equity, decided foreclosure was their only solution. This made Hopatcong Borough a poor investment area with a high risk rating combined with Highlands act - limited future expansion construction projects. Once investment banks raise the red flag on the rate of foreclosures it impacts their property evaluations of that area.
Looking at the new federal grant deal for Hopatcong redevelopment project in the River Styx area, what is missing is robust tax ratable revenues from these construction projects. Hopatcong desperately needs to get the biggest bang from its commercial zone because we have a very limited area for business center development. The current tax assessment value of the new Lakepointe townhouse units appears to be far below the assessment value of a property that has lake view appeal.
There should be only one reason our municipality should be involved in real estate development and that is to increase its tax revenue from these projects. If we are not getting a robust tax ratable from these redevelopment construction projects than this project was a high stakes grant funded beautification project that further burdened the taxpayer and did nothing for the economic blight of Hopatcong.
Hopatcong has rescheduled the public town meeting on the River Styx Grant Redevelopment Project for September 6th at Hopatcong High School. Our question as taxpayers should not be about the eminent domain clause in this grant program but rather why are we doing this grant project at all when there is no significant tax revenue to be gained from it. Or simple put “Where is the rate of return on this?“