Sandy Tax Gut Fuels Christie Rebuild Amid Cuomo Buyouts

Judy Aiello and her husband, Michael, settled 20 years ago at the New Jersey shore in a 1950s-era development with their backyard on a lagoon leading to Manahawkin Bay.

Five months after Hurricane Sandy sent a surge of water through the Beach Haven West neighborhood, about 35 miles north of Atlantic City, the Aiello house is more of a construction zone than a home. Damaged exterior siding lets in rain, and most of the floors are newly placed plywood, minus carpet or tile.

Governor Chris Christie, a Republican seeking re-election, is encouraging shore residents to rebuild after the storm, one of the costliest in U.S. history, imperiled billions of dollars in property values and taxes. It’s the opposite in nearby New York, where Democratic Governor Andrew Cuomo says rising ocean levels require a $400 million buyout of beachfront homes, an option the Aiellos are starting to envy.

“Nature really did a number on us,” Judy Aiello, a 60-year-old school secretary, said in an interview at her kitchen table. “It’s very tempting to leave. If an offer did come along, we’d have to consider.”

The contrast between Christie’s and Cuomo’s plans reflect a national debate over the role that scientists’ warnings on climate change should play in government decisions. In North Carolina, where barrier islands known as the Outer Banks draw tourists, a law passed last year bans the state from basing coastal policies on global-warming research. Rising sea levels in Norfolk, Virginia, have city officials debating steps to resist flooding.

Shore Tourism

Sandy crashed ashore in New Jersey on Oct. 29, leaving 2.7 million in the state without power, devastating some coastal towns and crippling mass transit. Christie, 50, has said it will cost $36.9 billion to repair the damage and prevent future devastation.

“We will rebuild,” he said Oct. 30 in a Fox News interview. “We are a tough, no-nonsense group of people in this state.”

Christie, a potential 2016 candidate for president, has staked a second term on recovery from Sandy. Last month, he proposed a $25 million advertising campaign urging vacationers to come back to the 127-mile-long Jersey Shore. Year-round residents, though, say they have worries beyond the reopening of dockside restaurants and boardwalk mini-golf.

“I couldn’t go through this a second time,” Mary Cleary, 59, of Union Beach, said in a telephone interview from Atlantic Highlands, where she and her husband are living temporarily. They halted all repairs to their home when they got conflicting information on raising the foundation.

“I never had high blood pressure in my life,” Cleary said. “I just had to go to a cardiologist. My blood pressure is to the sky.”

Property Values

Christie has no plans to return New Jersey’s Atlantic coastline to nature. Sandy-damaged Ocean and Monmouth counties have lost $5 billion in property value, for $77 million in tax revenue, according to the Star-Ledger of Newark. Shore visitors drive tourism, the state’s third-largest industry after pharmaceuticals and chemicals. Statewide, tourism spending and capital investment reached a record of $40 billion last year.

After Sandy, Christie said his job was to clean up, not speculate on whether climate change drove that storm or Irene, the 2011 hurricane that struck nine days after the governor thwarted Democrats’ efforts to stay in a regional cap-and-trade program that regulates carbon-dioxide emissions. He withdrew New Jersey from that initiative, even while acknowledging that “climate change is real” and “impacting our state.”

“It’s all economics,” said Debbie Mans, executive director of NY/NJ Baykeeper, a Keyport, New Jersey-based non-profit organization seeking to protect the Hudson-Raritan Estuary, where those rivers meet the Atlantic Ocean. “It’s not about nature.”

Roller Coaster

On Dec. 18, Moody’s Investors Service cited Sandy’s effects when it downgraded the borough of Seaside Heights to A3, the seventh-highest investment grade, from A2. In a community where beach sales contribute 41 percent of current-fund revenues, the big attraction now is the submerged Jet Star roller coaster, ripped off the boardwalk pier.

Up the coast in Sea Bright, the borough’s tax base of $518 million in assessed value has slid 20 percent “and counting” since Sandy, said Mayor Dina Long, 40, a Democrat. Moody’s rates the town’s debt A1, fifth-highest, with a negative outlook, meaning its credit could be cut.

Moody’s also assigned negative outlooks to three other Shore towns -- Belmar, Lavallette and Long Beach. On March 26, it downgraded Union Beach one step, to A2, the sixth-highest investment grade. The report cited a narrow financial position, a moderately sized tax base and the effects of Sandy.

Whole Blocks

Christie has applied for federal permission to spend $250 million in aid to acquire and raze flood-prone neighborhoods in areas such as Sayreville, South River and towns along the Raritan Bay. No master plan exists for which homes to buy, he said. The state would prefer taking entire blocks, rather than individual houses, and wouldn’t condemn properties, he said.

Seventy-three percent of New Jersey voters support buyouts of flood-threatened properties, according to a March 27 poll by Quinnipiac University in Hamden, Connecticut. Sixty-nine percent said it was a good idea for the government to build sand dunes or sea walls to protect oceanfront towns. The poll of 1,129 registered voters had a margin of error of plus or minus 2.9 percentage points.

Higher Ground

Along some parts of the shore, raising houses, building dunes and erecting walls “definitely reduce the risk,” said George Deodatis, who teaches civil engineering at Columbia University in New York.

“But it’s not a solution that can be applied blindly to the New Jersey coast,” he said. “Sea levels will rise. It will not rise dramatically next year or five years from now. A small number of communities might have to move to higher elevation.”

In North Carolina, the Coastal Resources Commission predicted a 39-inch (99-centimeter) rise in sea level by 2100. Lawmakers passed a bill in June to disregard that report. It became law when then-Governor Beverly Perdue, a Democrat, took no action.

On March 28, Christie submitted for federal approval a $1.8 billion plan including money to underwrite rebuilding for more than 30,000 housing units and 10,000 businesses in nine counties.

Staten Island

Cuomo, 55, has called for permanent retreat from New York’s waterside neighborhoods in Staten Island and the Rockaways peninsula in Queens. On March 12, he sent the U.S. Housing and Urban Development Department a plan to spend $400 million in federal funds on as many as 10,000 homes in floodplains in New York City and on Long Island.

“Climate change is real,” Cuomo said Nov. 12 in Manhattan. Storms similar to Sandy are “going to happen again. What do we do about it? How do we harden our systems?”

In the Staten Island neighborhood of Fox Beach, 170 of 184 homeowners have signed up to vacate, according to Joe Tyrone, 55, head of the Oakwood Beach Buyout Committee. Tyrone, a real-estate investor from the Castleton Corners neighborhood, said he expects $200,000 for the Fox Beach rental house he owns.

“This is the first time that we’ve seriously talked about ’Maybe we should move back, maybe we shouldn’t rebuild,’” said Orrin H. Pilkey, 78, an emeritus professor of earth sciences at Duke University in Durham, North Carolina, who studies shorelines and coastal geology. “It’s such music to my ears.”

Pilkey, speaking by telephone March 27, said rebuilding was the wrong move for New Jersey, where some beaches are “uniquely vulnerable” because they were constructed on filled-in marshes.

“Why should we be giving money?” said Pilkey, referring to U.S. taxpayers. “It isn’t us who are dumb enough to build right next to an eroding shoreline.”

Christie has 85 percent approval for his handling of Sandy, according to the March 27 Quinnipiac poll.

“He’s doing the best he can under the circumstances,” said Aiello, the Beach Haven West homeowner. Months ago, digging in and rebuilding seemed like a good idea, and now she’s weary of waiting for insurance money.

“We’re at the point where we’re seriously talking about leaving the state,” she said.

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