Bayonne council passes 1st reading of $65M bond, 30-year PILOT, for 1888 Studios


The Bayonne City Council unanimously approved (5-0) the first reading of a $65 million bond and 30-year payment in lieu of taxes (PILOT) for 1888 Studios at last night’s special meeting.

Joseph P. Baumann Jr., the chairman of high-powered law firm McManimon, Scotland & Baumann, has been tapped as a consultant for the project and gave about a 20-minute overview of the project before public comment.

“Unlike perhaps a warehouse, for example, the jobs in a movie theatre is everything from a plumber, to an electrician, to stage builder, to hairdresser, to custom design – almost anything you could think of, those are the type of jobs they’ll be,” he explained.

” … At the end of the day, this is gonna be a huge net positive, financially, to the city. It’s estimated that the direct, indirect, and induced benefit to the city and the region is somewhere around $190 million annually – most of which is salaries and payroll for the various users.”

Baumann continued that this over $900 million endeavor is “a game changer” that received approval from the Local Finance Board earlier this month, while acknowledging that a $65 million is significant for the city.

He further stated that a PILOT, which he claimed is the same as an annual service charge, explaining that they can never pay less than the annual debt service on the bond, which is about $1.2 million – a net gain of about $530,000 for the city.

Resident Gail Godesky said that the ordinance should be tabled since the meeting was not well advertised and therefore many residents were unaware of what was being voted on.

Both Baumann and Council President Gary La Pelusa said that the second and final reading for the council won’t be until February 15th, three weeks from yesterday, also noting that a public meeting on the project was held in September

Still, Godesky said the $65 million bond would probably be better spent on improvements on infrastructure in the city that already exists, eventually asking what’s in it for Bayonne.

She also scoffed at the notion that this would be the city’s largest employee over the board of education.

“One, it’s the construction jobs and there’s a local preference. Two, it’s the full-time jobs, which, when I gave you the numbers, I was only looking at private employers, so I didn’t check to see how many at the board of ed, you may be right, but it’s still 2,100 jobs – it’s substantial,” Baumann replied.

Upon further questioning, Baumann said that the lender will likely put up approximately $100 million and that the financial advisor for the city determined that $65 million is what’s needed to close the gap to make this “a financially viable” project.

Board of Education Trustee Mary Jane Desmond was also apprehensive of the $65 million bond, which she was worried would ultimately fall on the shoulders of taxpayers. She suggested that the same money, time and effort should be spent on bonding for new schools.

Her colleague on the school board, Melissa Godesky-Rodriguez, spent about 10 minutes asking Baumann questions along those lines.

First, she asked if the residents of the Peninsula City would be able to vote on whether or not the project would include a $65 million bond, to which Baumann said they would not.

She expressed some frustration with that since the BOE would not be able to take such an action without getting voter approval first.

“Unfortunately, it’s not a choice between this project or a new school, right? … The first thing is the requirements for a referendum are not in redevelopments, the law simply says you can’t, in school law it says you can: that’s a conversation to have with your state legislator,” Baumann responded.

Godesky-Rodriguez then asked if Assembly William Sampson (D-31) was available for questions, which he was not.

” … There’s a distinction I’m failing to communicate, it’s that when the board of ed issues bonds for a new school, that is paid back by the entire tax base of the City of Bayonne. This bond is not gonna be paid back by the taxpayers of the City of Bayonne, it’s only gonna get paid back by that property owner through a special assessment, so that’s a sort of really specific and significant difference between the two.”

Baumann later noted that the studio was committing themselves to an apprentice program to help students interested in working in the TV and film industry.

Additionally, residents Peter Franco and Pat Desmond, longtime political adversaries of the Mayor Jimmy Davis administration, pointed out that Baumann was involved with the controversial water deal with Suez (now Veolia) about a decade ago.

“What do you say to folks that remember you from the water deal and how are they gonna trust you at this point?” Franco inquired.

“Look, I first represented Bayonne under Mayor Collins: we could talk Carnival Cruise, we can talk acquiring the MOTBY, we could talk about the golf course, stuff that I’ve worked on for Bayonne until recently span 25 years,” Baumann began.

” … We could spend an entire night talking about what was going on the moment that conception agreement was etched. This is not the time or the place for that and I’m happy to talk to you over there or some other day … I stand by my 35 years and reputation and people can decide to trust me or not.”

Prior to the vote, Robert Benecke, the financial consultant for the redeveloper Togus Urban Renewal, LLC, said that the nearly 75-acre property would include a 16-foot wide waterfront walkway, park, studio, and sound stages, despite some recent changes, to which La Pelusa said he wasn’t aware of.

“The sound stages are essentially the same, just a little bit different in terms of the configuration. The planning board approved the site plan about a week or two ago. That site plan was prepared about three or four weeks after the September forum and was delivered to the planning board maybe a month or so thereafter.”

He also estimated the total cost of the project to be approximately $925 million.

If the PILOT deal receives final approval, it guarantees the city will start receiving $2.6 million annually from Togus and eventually grow to about $7.5 million.

The council ultimately approved both measure unanimously shortly after 9 p.m.

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