§ 696. Tax incentives. Upon the consent of the governing body of any
municipality in which an urban development action area project is or is
to be located, the real property of a project may be exempted from local
and municipal taxes, other than assessments for local improvements and
land value, to the extent of all or part of the value of the improvement
included in such project, for a period of twenty years from the first
date on which taxes otherwise would become due in the absence of the
exemption, during the last ten years of which the exemption shall be
decreased in equal annual or biennial decrements according to a formula
established by the governing body at the time it gives its consent to
the tax exemption, pursuant to this section. If the project consists of
new construction, the land value for purposes of determining exemptions
permitted by this section shall be the lesser of the assessed valuation
immediately prior to commencement of construction or the assessed
valuation of the land appearing on the assessment roll in the first year
after completion of construction. Such exemption may only be made
available where the urban development action area project includes the
construction of a new structure or the renovation, rehabilitation or
conversion of an existing structure where the cost of such renovation,
rehabilitation or construction is at least equal to one hundred percent
of the assessed value of such structure as determined in the tax year
immediately preceding the governing body's grant of tax exemption to
such project. Any lease of real property and appurtenances thereto for a
period not exceeding twenty years shall require payments to the
municipality in lieu of taxes. Such additional payments shall be
required to be in equal annual or biennial escalating amounts over the
life of any lease for a period not exceeding twenty years so as to
ensure that payments in lieu of taxes made during the final year of such
lease shall be equal to all local and municipal taxes. All renewals of
any lease shall include provision for payment of rental and in lieu of
tax payments greater than or equal to those required during the final
year of the original lease. Any lease of real property and appurtenances
thereto for a period in excess of twenty years but not exceeding
ninety-nine years shall require payments in lieu of taxes. Such payments
shall commence in the tenth year of such lease and increase in equal
annual or biennial amounts until the twentieth year so that such
payments commencing in the twenty-first year and continuing until the
conclusion of the lease shall be equal to all local and municipal taxes.