Wayne Homeowners' Taxes Could Increase Thanks To Toys R Us

WAYNE, NJ — The pending shutdown of the Toys R Us headquarters on Geoffrey Way could cause local property taxes to increase, negatively affect the township's credit, and put a dent in the local economy, according to Moody's Investors Service.

Moody's noted on its weekly credit outlook that Toys R Us' bankruptcy and pending shutdown of its stores and huge headquarters will be a "negative credit factor for Wayne."

Toys R Us is the third largest taxpayer in Wayne. The once-dominant retailer's annual tax payment on the 107-property was $2.1 million in 2016. That accounts of 2.5 percent of the township's total operating revenue, said David Jacobsen, a spokesman for Moody's said. The property's assessed value is $38.5 million.

And that $2.1 million might not remain that high if the building and property remain vacant.

"If the property is put up for sale, it would take some time for a new tenant to take over, which could increase the possibility of delinquent taxes," said David Jacobsen, a spokesman for Moody's said. "The assessed value of the property could be depressed if the building becomes unkempt with a prolonged vacancy."

Wayne's assessed values declined annually from 2009 to 2015 because of softening of the housing market after the recession; assessed values have only begun to recover recently, Moody's said.

A Toys R Us spokesperson previously said that she did not have information regarding what would happen to the headquarters after the May 14 layoffs.

The laying off of the company's 1,159 employees at the 107-acre headquarters May 14 will contribute to two things: The overall local unemployment rate and local business activity, Jacobsen said.

The headquarters is located off of Berdan Avenue, which leads to the Preakness Shopping Center, the Point View Shopping Center and lots of downtown retailers and restaurants.

The property is located in an office-research zone. If Toys R Us, or another future owner, wants to build retail or residential units, it will have to get approval from the Board of Adjustment first.

Despite Moody's concerns, the town's "solid fiscal position" is likely to "mitigate" the loss of Toys R Us, Jacobsen said. The town should be able to absorb any decline in tax revenue that might occur if the headquarters closes.

Related: What Toys R Us Shuttering Stores Means For Wayne
Related: Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy
Related: Toys R Us Will Sell Or Close NJ Stores, Company Confirms

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