Mayor Bob Patten hopes former Hightstown Rug Co. property can be redeveloped without offering tax breaks to the developer.
By: Mark Moffa
HIGHTSTOWN The mayor said Saturday that he hopes tax breaks won’t be necessary to entice a developer into redeveloping the Bank Street mill area.
Mayor Bob Patten briefly addressed the issue of a payment-in-lieu-of-taxes program during his address at Saturday’s Borough Council reorganization meeting.
"I dream that the redevelopment of the former Hightstown Rug Co. property, which was established 100 years ago, will fly smoothly with a tail wind and with the only ‘pilot’ being the council and the redevelopment agency," the mayor said at the meeting.
PILOT programs are an incentive to attract developers and entice them into investing in community redevelopment. Annual payments are made in lieu of taxes over a designated period of time.
The mayor said Wednesday that he’s hoping a PILOT program won’t be necessary, but said that since the borough has not selected a redeveloper or received a site plan, it’s too early to rule out a PILOT program.
"It creates controversy," the mayor said.
PILOTs often are used as a carrot to attract business to an area. The program would apply only to the commercial and office land, not residential property, which would be taxed at the usual rate.
"It could be a very positive thing for any municipality," Mayor Patten said.
But, he added, the school district would bear the brunt of any potential PILOT.
In a PILOT program, a developer would be allowed to pay only a portion of the normal tax on a property for a period of five to 30 years. The payment would go to the borough and the county. The borough would be responsible for distributing that money, and would be under no obligation to give the school district anything.
Normally, the school district would get almost two-thirds of all property tax money collected by the borough. Right now, the borough gets about $40,000 in total tax revenue from the former mill. The mayor said he hopes to collect $400,000 after the land is developed.
As an example, the mayor said a five-year PILOT program would require the developer to pay 20 percent of the total tax the first year, then 40, 60, and 80 percent in the second, third and fourth years, until paying 100 percent in the fifth year.
The Redevelopment Plan calls for the construction of new retail and office space and includes the erection of 72 condominiums within the mill zone and up to 10 townhouses along North Academy Street.
As part of the plan, a new municipal building, a police station and permit-only parking spaces could be constructed at the expense of the proposed developer, Greystone Capital Partners of King of Prussia, Pa. In return, the borough could surrender its municipal building and police station to the developer. As of yet, the names of any other developers have not been mentioned.
The mayor said the borough has been meeting with Greystone, and is waiting for the company to prove its ability to finance the project. He said the borough will not rule out changes to the plan, including abandoning the idea of having a new Borough Hall built or having work done in phases.
"Let’s be flexible," the said, noting, however, that he would prefer if the Redevelopment Plan stay the same. The plan was passed as an ordinance after much debate among council members and significant revisions to the original plan.
Staff Writer Michael Ross contributed to this story.