RED BANK – The 2015 revaluation of all borough property has revealed a “disturbing” number, Mayor Pasquale Menna said.
Last year’s court-mandated reval, completed last December, has determined that the overall property value has declined in the borough by 5.34 percent, according to Eugenia Poulos, the borough chief financial officer.
That puts the assessed value of the borough’s real property for 2015 at $2,075,371,065, down from the reassessment the borough underwent in 2010.
The only other of Monmouth County’s 53 municipalities to have a larger drop is Sea Bright, with a 5.7 percent fall, which Menna suspected was due to the continuing impact of Super Storm Sandy in 2012.
Both Poulos and Menna attribute the decline to the increasing number of tax appeals property owners bring forth against the borough. Most of those appeals are for commercial properties, with the reval results indicating the loss of value disproportionately reflected in commercial properties.
In addition to calling it “disturbing,” “This is a precipitous drop,” Menna pointed out. And one, he continued, that “calls for innovative and forward looking decisions on the part of the governing body to move Red Bank forward and keep it competitive.”
Residential properties, on the other hand, have increased in value, “quite a bit,” resulting in home sellers getting prices above assessed valuation, according to the mayor.
Commercial property owners are taking the borough to court for the appeals, in some cases arguing that they purchased the location in a higher market and it’s no longer worth that much; other times, it remains unrented and doesn’t generate the level of income projected; or, such as the case of the vacant large 55 West Front St. lot, believing it is entitled to a reduction in value, resulting in lower tax bills.
Red Bank commercial properties dropped in value due to the large number of tax appeals by mostly commercial property owners. Anthony V. Cosentino
Some commercial property owners each year initiate tax appeals as the course of business and the borough regularly enters into settlements with some of the owners, compromising on the reduction, which still results in a loss for the borough, a municipal attorney had explained previously.
With the commercial property value down, Menna explained that means more of the tax burden is shouldered by the homeowners.
Commercial properties had reached the point of carrying about 49 percent of the tax burden, but with the reval, “that’s down a bit,” requiring residential owners “to make up the difference,” he said.
Peter Reinhart, director of the Kislak Real Estate Institute, at Monmouth University, West Long Branch, noted “commercial properties had a terrific run for about 20 years,” in Red Bank prior to the 2008-09 recession. Now one “has to look at who the tenants are,” and some of the changes in the marketplace that may have been contributing factors. Reinhar t mentioned the changing nature of retail, moving away from traditional brick-and-mortar model to Internet sales as one possible factor.
“The unspoken factor may be the stalling in Red Bank over improving the parking situation,” Reinhart said. The business community has long argued that the chronic customer parking shortfall in the downtown business district has impeded its ability in an increasingly competitive environment, with Long Branch’s and Asbury Park’s redevelopment over roughly the last decade.
“I don’t think it’s a longtime slide,” Menna predicted, given some large projects are now on the books and generating revenue. And he hinted others may be in the offing shortly.
Menna also defended his stance on having the 55 West Front St. lot classified as a site worthy of redevelopment, which may result in a zoning board-denied large residential project to eventually move forward, adding to the tax base.
The borough’s last complete revaluation took place in 2000, and that one too was court ordered. Courts mandate the reval for municipalities’ properties to keep assessed values and selling prices more in sync so all property owners pay their fair share of taxes.
