PILOT program not automatic

Township to seek state ban of borough’s tax-break plan

By Vic Monaco, Managing Editor
   EAST WINDSOR — Saying tax-break plans like the one being eyed for the potential developer of the former rug mill in Hightstown is “patently unfair” to the township, “reduces critical school funding” and “constitutes poor public policy,” the Township Council will ask the state to bar such programs in towns that are part of regional school districts.
   In lieu of such a legislative prohibition, the council wants the state to compensate regional school districts for 100 percent of the lost tax revenue under such payment-in-lieu-of-taxes programs or require taxpayers in towns granting such PILOT programs to pay for that loss.
   Township Mayor Janice Mironov announced Wednesday that she, Deputy Mayor Walter Daniels and fellow council member Perry Shapiro plan to introduce a resolution calling for the state action at the council’s next meeting, Tuesday.
   The resolution, provided Wednesday, points out that Hightstown is considering a payment-in-lieu-of-taxes program with a “profit-making developer proposing to construct 130 multifamily residential units.”
   That person is rug mill owner John Wolfington, who has been talking to the borough about redeveloping the 7-acre Bank Street site for more than four years.
   Under the PILOT program being eyed for that project, the borough would be allowed for a period of 10 years to keep 95 percent of payments made by homeowners in lieu of taxes that normally would be shared in part with the regional school district. The revenue has been estimated at $750,000 a year once all the units are occupied.
   The PILOT would help the developer sell his residential units, planned mostly as condominiums, by offering potential buyers annual payments lower than normal taxes for the 10-year period.
   Some borough officials have indicated they favor sharing some of the revenue with the school district, perhaps based on the number of school-age children who live in the new development. Nonetheless, township and school district officials in September let borough leaders know that they are none too pleased with the potential PILOT program.
   East Windsor Township Attorney David Orron wrote a letter to Hightstown Mayor Bob Patten and the Borough Council at that time stating that the “granting of any tax breaks to the developer … could result in a direct impact by way of increased school taxes for East Windsor residents.”
   The Township Council resolution further states that “the property tax structure in New Jersey creates a tremendous burden upon property owners, and in East Windsor Township and Hightstown Borough school taxes comprise over 65 percent of the total tax bill.”
   Mayor Patten declined to comment on the pending resolution. Borough Council President Walter Sikorksi, who was a big proponent of the PILOT program but has seemed cooler to the idea of late, said it was premature to respond.
   ”It’s inappropriate to comment on a PILOT program that is not being required by the developer at this time,” he said. “Until I see a specific proposal … I couldn’t comment on all of its ramifications.”
   Mayor Mironov was asked Thursday her reason for announcing the plan for the resolution introduction ahead of time.
   ”We think this is an extraordinarily important issue to residents of both communities and wanted to let all residents know we’d be discussing this,” she said.
   She also acknowledged, when asked, that the township was involved in its own PILOT program about 10 years ago with the Wheaton Pointe development.
   ”That has nothing in common with this Hightstown situation of voluntarilygranting school property tax breaks to a profit-making developer to build130 residential units, generating school children,” she said. “The township agreement was in 1997 for Wheaton Pointe, a fully federally subsidized 85-unit senior-citizen apartment complex for lower-income seniors, and which generates no school children. It was to a nonprofitsponsor PH, as a required condition of the U.S. Department of Housing andUrban Development for a $9 million Federal Section 202 senior citizen housing construction grant and to annually subsidize the seniorcitizen rents.”
   Without that PILOT, she added, “there wouldn’t have been a project,” which she called “a blessing in the community.”
   Schools Superintendent Ron Bolandi, who said in September that classroom space is already at a premium, said he fully supports the resolution and hopes the school board backs it.
   ”I’m really happy that a local politician is willing to take on the state and say ‘You’ve got a problem here,’” he said. “It affects schools, it affects taxpayers, and I can’t commend her enough for doing it.”
   School board Vice President Bob Laverty said there could be discussion of the resolution at the board’s meeting Monday night.
   Asked if he thought the resolution could have an impact on state officials, Mr. Bolandi said, “I would hope so. I think it affects the entire state.”