Tax incentive program rehabs coastal city of Wildwood, New Jersey
In March 2022, the city of Wildwood, N.J.’s, Board of Commissioners voted to continue a popular tax incentive program designed to encourage development and home improvements throughout the coastal community. It is a program that began in 2015 and has increased property values and revitalized blighted areas of the city with newer housing and commercial projects including hotels, restaurants and retail stores.
A diamond in the rough
Prior to the launch of the 2015 tax incentive program, Wildwood was designated “an area in need of rehabilitation” in which a significant portion of structures were deteriorated or in a substandard condition. There was a continuing pattern of vacancy and abandonment as well as a need to prevent further deterioration while encouraging new construction. City leaders initially offered the tax incentives within the business district on Pacific and Rio Grande avenues, then expanded it to include the whole city.
Under the plan, new residential construction is eligible for a reduction of 30% of the assessment of the finished value for single-family and multifamily projects. Existing homes, those older than 25 years, are eligible for an exemption of the first $25,000 in value for improvements and additions made to the property. Commercial projects are eligible for a five-year phase-in of the value of the new project, which starts at $0 for the first year, increases to 20 percent for the second year and 40 percent during the third year until the full tax bill is applied in the final year. The incentive has the added bonus of being transferrable in the event the property is sold.
“The program allows a new project to be built and not immediately saddle the owner with a hefty tax bill,” said Wildwood Tax Assessor Jason Hesley CTA. “It is believed that the granting these exemptions or abatements attracts development to the city that would otherwise not occur.”
In the years since, the program has had a tremendous impact on the community and has resulted in several construction projects that might not have been previously considered. Instead, several have been built and construction continues throughout Wildwood.
Of course, no program is perfect. Hesley is quick to point out how challenging it can be to balance the benefits to new property owners against the taxes being paid by current residents.
“Many believe that allowing newer properties to pay a lower portion of the full tax bill places a burden on the other taxpayers in the district,” he said. “However, it is important to note that if not for the incentives granted, many projects would not be built. This would result in the city receiving no added tax revenue.”
In addition, due to the age of the program, there are properties aging out of it. This has resulted in $1 million in ratables being added to the tax base from those properties whose exemption has expired.
“From 2011 to 2018, losses in ratables from tax appeals outnumbered the gains in ratables from development and new construction. However, after the implementation of the five-year tax exemption or abatement program has seen a steady increase in our ratable base,” Hesley said.
Generating interest
Incorporated as a city in 1912, the city of Wildwood is part of five distinct communities in Cape May County, N.J., collectively known as The Wildwoods. The area developed as a resort town near the end of the 19th century and experienced something of a building boom during the “Doo-Wop” era of the 1950s and 1960s, thanks in part to the completion of the Garden State Parkway in 1955.
The Waves Motel is one of the newer developments thanks to Wildwood’s tax exemption/abatement program that allows builders to phase in their tax assessment costs. (Photo provided by Wildwood, N.J.) 
The Corkyard Bar gives a neighborhood a lift while also offering developers a tax reprieve thanks to Wildwood, N.J.’s, tax exemption/abatement program. (Photo provided by Wildwood, N.J.) 
The Mudhen Guest Homes are among the new developments to benefit from Wildwood tax exemption/abatement program, which allows owners to phase in their tax assessments over five years. (Photo provided by Wildwood, N.J.)
During this period, approximately 300 motels were constructed with all the neon, color, angles and kitsch character for which the decades were known; and though some of the travel lodges have been demolished, those that remain have been organized into the Wildwoods Shore Resort Historic District – including the restored Caribbean Motel and the Chateau Bleu Motel, the Oceanview Hotel, among others. One of the most notable resorts was the Hofbrau Hotel, which many consider the original home of rock and roll. Bill Hailey and the Comets performed “Rock Around the Clock” on the premises over Memorial Day Weekend 1954.
The nostalgic charm of Wildwood is beloved by locals and tourists alike. They flock to the Boardwalk to enjoy 38 blocks of shops, waterparks, eateries and entertainment for folks of all ages. And although the city is keen to encourage modern developments, city officials also believe in preserving the past. The tax-incentive program offers a benefit to both worlds.
Hesley said that communities considering a similar abatement program should put together a competent review committee made up of professionals within the municipality and from the private sector so that all valuable viewpoints can be explored. However, just as the program can be successful in generating interest in development, it is also important to consider when such a program has achieved its goals.
“Having a clear plan on when to wrap things up can be helpful,” he said.
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