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City administration and downtown Asbury Park developer Sackman Enterprises have worked out a tentative agreement on five years’ worth of payments owed to the city on the Steinbach building.

The amounts  are owed under a payment in lieu of taxes [PILOT] agreement for the residential portion of the restored building located in the downtown business district.

The city neglected to bill the developer for the payments on the Steinbach building and the 550 Cookman Avenue apartment complex apartment complex until December of last year, which had by then amassed to about $700,000.

Under the tentative agreement, Sackman will pay a total of $603,480.06 on the Steinbach building split into payments, one $500,000 payment by May 9 and remaining balance in 24 monthly installments beginning June 1, according to City Manager John “Jack” Kelly.

Sackman paid the balance on the 550 Cookman Ave. apartment complex in February.

An 18 percent interest rate is allowed under the PILOT agreement for the Steinbach building, which started accruing the day after the city sent Sackman a bill for the payments on December 26.

Carter Sackman, president of Sackman Enterprises, initially planned to seek arbitration in the matter, claiming the city miscalculated the initial start date for payments and, to boot, mistakenly billed the developer $200,000 for a sewer connection fee that was pre-existing and not augmented during building’s restoration.

By the time Sackman discovered the overpayment the statute of limitations in the matter had expired, rendering the developer unable to sue the city to recoup the payment, he said.

Under the tentative agreement, the city will waive the accrued interest and Sackman will waive arbitration and the dispute over the sewer payment, Sackman said.

“I think it’s a good settlement,” Kelly said. “The city gets 100 percent of the balance and there is no cost for arbitration.”

Sackman is hopeful to have the issue resolved and to move forward with further development, he said.

“I’m doing a lot more in the city and I want to continue to work with the new government,” Sackman said. “In my view, there is still a lot more that needs to be done in the city.”

If Sackman defaults on any of the payments, the agreement states the building will be subject to the city’s annual accelerated tax sale, Kelly said.

The PILOT agreement on the Steinbach building expires in August of 2016, at which point the building will be subject to regular taxation, Kelly said.

The agreement leaves the building’s residential parking requirement still under negotiation, Kelly said. Parking is currently being satisfied on a nearby surface lot adjacent to the Press building which Sackman Enterprises owns.

The city council must approve the settlement. A vote on the matter is scheduled for the May 7 meeting.

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