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Frequently Asked Questions About Open Space Trust Funds

Why are we voting on November 6, 2007?

On November 6, 2007, Hoboken residents will have the opportunity to vote on a referendum to create a local Hoboken Open Space Trust Fund. Here is what it says:

"Shall the City of Hoboken consider establishing a Municipal Open Space, Recreation and Conservation Trust Fund, pursuant to N.J.S.A 40:12-15.7 to be funded at a rate not to exceed $.02 per $100.00 of total municipal equalized real property valuation and used exclusively for:

a.) Acquisition of lands for recreation and conservation purposes.

b.) Development of lands acquired for recreation and conservation purposes.

c.) Payment of debt service on indebtedness issued or incurred by the City of Hoboken for any of the purposes set forth above."

Here are some commonly asked questions and our answers.

What is the Hoboken Open Space Trust Fund?

The Trust Fund assures that a portion of our local property taxes are set aside in an Open Space Trust Fund to be used only for creating new parks in Hoboken. These funds are separate from the general tax revenues and cannot be used for general city expenses.

How will the Hoboken Open Space Trust Fund be funded?

The Trust Fund would be supported by a new annual levy on owners of Hoboken real property and will not exceed 2 cents per $100 of the assessed value of the real property.  The"Assessed Value" for determining your levy is often much less than the actual value of your home or dwelling, and the amount of the levy will be based on that assessed value. Thus, a Hoboken house with a tax assessed value of $200,000 would have a levy of $40.

Why do we need an Open Space Fund?

Here are just a few of the reasons:

• Hoboken rates last in the county and last in New Jersey in the amount of open space for its population. According to Urban Park Standards, Hoboken should have should have over 112 acres of parkland for its 45,000 residents. Hoboken has only 38 acres of park. In an attempt to meet this park need, Hoboken’s Master Plan identified 30 additional acres of undeveloped land in the north, west and southwest of the City to be acquired for parks. (2004 Master Plan, page 34)  In less than 10 years, it is expected that Hoboken will achieve full build-out and there will be no land left to acquire for parks.More than 1300 school children must use Church Square Park because Hoboken schools have no playgrounds.
  

• More than 800 children and adults use Hoboken’s one softball/baseball field at Stevens Park

• More than 700 children and adults try to use Hoboken’s one soccer field at Sinatra Park

• Young children are forced to play soccer and baseball late into the evening because of the overwhelming demand for fields

• Many Hoboken adult and youth recreational teams must leave Hoboken to use fields in other towns

Can the Hoboken Open Space Trust Fund be supplemented with other funds?

Yes, Hoboken can use the Open Space Trust Fund to pay for the matching portion of grants from the New Jersey State Green Acres Fund. If Hoboken has an Open Space Trust Fund, Green Acres will match the City’s money up to 75% of the cost of acquiring land for parks and 50 % of the cost of park recreational facilities.  Also under Green Acres, Hoboken would qualify for zero- interest 30 year loans to acquire parkland and zero- interest 30 year loans to build park facilities. Hoboken will also be eligible for matching grants for park acquisition and construction from the Hudson County Open Space Fund.

What do parks do for my property value?

Studies in a wide range of urban areas have documented increases in real estate value for residences located near parks, with incremental increases in real estate value attributed to parks ranging into millions of dollars.

As early as the 1850s, landscape architect Frederick Law Olmsted justified the purchase of land for New York's Central Park by noting that the rising value of adjacent property would produce enough in taxes to pay for the park. By 1864, Olmsted could document a $55,880 net return in annual taxes over what the city was paying in interest for land and improvements. By 1873, the park – which until then had cost approximately $14 million – was responsible for an additional $5.24 million in taxes each year.

Enhancement value is the tendency of open space to enhance the property value of adjacent properties. It "is also explicitly recognized by federal income tax law”. U.S. Treasury regulation Sec. 14(h)(3)(i) requires that the valuation of a conservation easement take into account (i.e., be offset by ) any resulting increase in the value of other property owned by the donor of the easement or a related person.

According to the New Jersey Association of Realtors, the exact amount by which a home's value increases because of its proximity to open space varies by community. But many studies have shown that, in general, homes located adjacent to parks sell more quickly and are more likely to increase in value than homes not near open spaces.

How can the Open Space Trust Fund help my tax bill?

It is well established that each new residence built in Hoboken adds to the cost of running our city in the form of police, fire, emergency services, municipal administration, garbage pickup, sewer and water infrastructure and road use. Taxes generated by new residential development fall substantially short of the financial burden they create. In the long run, the cost of open space is a bargain when compared to the escalating expense of providing municipal services to residential developments.

How much funding will the Hoboken Open Space Trust Fund generate for parks?

It is estimated that the Hoboken Open Space Trust Fund will generate $600,000 per year which can be used to fund the debt service on long term bonds for parks and the matching portion of the Green Acres grant funds. Green Acres and other funding agencies look very favorably on local initiatives that show citizenry support of open space.

Have other towns established an Open Space Funds?

Yes, thus far, over 200 towns and over 20 counties in New Jersey have established open space trust funds and successfully created thousand of new parks acres.       

Sources: “A Handbook for Public Financing of Open Space in New jersey, Revised by ANJEC, December 2001”; .