Passaic struggles with losses as tax-exempt religious groups buy up taxable land

By RICHARD COWEN

STAFF WRITER |

The Record

Religion has become a growth industry in the city of Passaic, where tax-exempt churches, synagogues and mosques are busy gobbling up land to expand their operations at a time when the city is struggling to attract new property-tax revenue.

Sunday worship at Iglesia Centro Biblico La Hermosa, whose building on Park Place came off Passaic’s tax rolls last year at a cost to the city of $10,724 annually.

The steady erosion of Passaic’s economic base has left many buildings vacant and jobs hard to find. Into the abyss of a depressed economy have come religious non-profits of every denomination, buying up land and taking it off the tax rolls as they expand their ministries.

"It’s one of the challenges of being an urban mayor," said Mayor Alex D. Blanco. "Religious non-profits do a lot to help people by providing services. But there’s also a cost. This is a topic that has come up over and over."

The Passaic tax assessor recently estimated that there were more than 200 religious non-profits operating in the small city with a population of 69,781. Being a melting pot, Passaic hosts just about every denomination, from the synagogues and yeshivas that have transformed Passaic Park, to the downtown storefronts hosting evangelical Christian services in Spanish, to the soaring steeples of the Russian Orthodox and Polish cathedrals in lower Dundee.

And there’s more to come. The Mormons have bought two boarded-up houses on Gregory Avenue and plan to build a temple. A Jewish congregation, Congregation Kol Yeshurun, bought a former medical building near the corner of Brook Avenue and Broadway to convert it into a synagogue.

Those two properties are expected to come off the tax rolls sometime this year. When they do, the properties owned by the Mormons will cost the city $11,826 in tax revenue. Losing the medical building will cost the city an additional $14,055 in taxes.

Eric Hawkins, a spokesman for the Church of Jesus Christ of Latter-day Saints, said the decision to build in Passaic isn’t just because land values are affordable. It’s because Mormons have been making inroads into the city for years.

"There’s already enough of a congregation to support a church," Hawkins said. "It’s not a situation where we say, ‘Build it and they will come.’ The congregation is already there."

One of the newest Christian churches is Iglesia Centro Biblico La Hermosa, (translation: "Beautiful Bible Center Church"), situated at 86-88 Park Place in a building that used to house an unemployment office. Before that, it was the TW Machine shop. It came off the tax rolls in 2010, costing the city $10,724 in annual revenue.

The pastor, the Rev. Vargilio Hernandez, said the congregation is an offshoot of the Pentecostal Church of God, situated at 125 Hamilton Ave. Hernandez said the congregation was growing and needed more space.

Another recent addition is the Al Ansar mosque on President Street, which was built where a city firehouse used to be.

Blanco said he wasn’t overly concerned about the loss of ratables from houses of worship and said Passaic was typical of most cities.

"We have over 8,100 ratables in the city, and only about 8 percent of them are tax-exempt for religious purposes," Blanco said. "I think that is about normal for an urban area."

42% of land is tax-exempt

But some residents worry that with a large part of the city’s industrial base gone and property taxes rising, Passaic can ill afford to continue deeding land to religious non-profits. A grant application submitted by the Passaic Fire Department in 2010 estimated that 42 percent of the city’s 3.2 square miles was tax-exempt — when land set aside for parks, schools, railroads and public buildings was added in.

Margie Semler, who served as mayor from 1993 to 2001, said about one-third of the city’s land was tax-exempt when she was in office. The increase to 42 percent is almost entirely the result of the expansion of religious non-profits.

Semler said the Passaic Board of Adjustment has repeatedly caved into pressure from religious groups, granting variances for crucial quality-of-life amenities like parking to allow synagogues and yeshivas to be built.

"What good is the Board of Adjustment if they say yes to every application?" Semler asked.

But Menachem Bazian, the chairman of the Board of Adjustment, said the city is so old and dense that nearly every project requires some kind of variance.

"I can’t think of anywhere in the city, except maybe in the middle of a public park, where you wouldn’t need a variance to build," Bazian said.

Bazian said that houses of worship are considered an "inherently beneficial" use under zoning law, which gives them an advantage in seeking site plan approval. He said the Board of Adjustment isn’t allowed to consider the loss of tax ratables when deciding on a project.

"By law, we are forbidden from considering the tax implications," Bazian said.

Louise Ulan has lived in the same house on Terhune Avenue in Passaic Park since 1975. She has watched the neighborhood change dramatically the past few years.

The soy sauce factory that used to sit at Terhune and Main avenues was bulldozed about five years ago to make way for Yeshiva K’Tana. Then in 2007, the Board of Adjustment allowed a house across the street to be razed to make way for a new synagogue for Congregation B’nai Torah Agadas Yisrael.

Although the city’s zoning laws required the new synagogue to provide one parking space for every four seats in the temple, the Board of Adjustment granted a variance that allowed construction without any on-site parking. Instead, the board allowed the congregation to use the parking lot across the street at Yeshiva K’Tana.

Ulan said the arrangement hasn’t worked very well. The parking lot at Yeshiva K’Tana isn’t big enough, so congregants park on the street, sometimes blocking driveways.

"We were told that parking wouldn’t be a problem because most members of the congregation walk to the temple," Ulan said. "But they bring their cars on Friday night and park on the street until Sunday. They take up all the parking on the street."

Since the synagogue opened in September, Ulan has regularly attended City Council meetings to complain about the situation. She says her taxes have gone up and her quality of life has gone down.

"We pay $10,000 a year in taxes," she said. "I look out the window, and all around me, I see properties that pay no taxes."

Bazian said the synagogue complied with the Board of Adjustment’s mandate to supply parking in a nearby lot instead of having to build space for parking.

‘We risk a lawsuit’

City Council President Gary S. Schaer pointed to a federal law adopted in 2000 that favors houses of worship in zoning matters. Schaer pointed to a 2000 law adopted by Congress, the Religious Land Use and Institutionalized Persons Act, that tilts power toward religious non-profits.

A key element of the law holds that "no government shall impose or implement a land-use regulation in a manner that imposes a substantial burden on religious exercise of a person, including a religious assembly or institution."

Schaer added, "Federal law favors religious institutions. If we say no, we risk a lawsuit."

The mayor said that the three lots that the Mormons bought had been considered a prime site to build a strip mall. But the church bought the property first.

"We can’t tell a landowner who to sell to," Blanco said.

Schaer said that although the loss of tax ratables is regrettable, churches and synagogues enhance the quality of life in numerous ways. They provide schools, day-care centers and counseling, and boost the values of the properties around them, he said.

"Religious institutions not only fulfill a need in the community," Schaer said, "they provide jobs, services and investment."

Email: cowenr@northjersey.com

NorthJersey.com : News

December 23, 2011

Last updated: Saturday, December 24, 2011, 10:38 AM