The Sayreville Borough Council voted to approve a 25-year tax abatement for the Chase Signature housing development that will be built adjacent to Route 35.
The developer, Highview Homes, will pay the borough an annual payment-in-lieuof taxes (PILOT), which is projected to generate $7.3 million in revenue over the life of the agreement.
Democratic council members Mary Novak, David McGill, Ricci Melendez and Daniel Buchanan voted in favor of the agreement. The sole “no” vote came from Republican Councilman Art Rittenhouse, who said he supports the project but wants the Sayreville Board of Education involved in discussions.
David Thompson, CEO of Phoenix Advisors, financial consultants, said the analysis was prepared to paint a conservative picture of what the borough could expect from the deal, but added that the agreement is a “win/win scenario.”
“Our projections are more conservative than the developer’s projections,” Thompson said. “There are no rose-colored glasses here.”
Under the PILOT, the developer would pay 10 percent of the taxes that would be due without the tax abatement in the first year, and that figure would incrementally increase to 80 percent by year 15, Thompson said.
“Some of the numbers, when you add them up over the life of the project, get to be big,” he said.
Under the agreement, the borough would receive 95 percent of the tax revenues paid under the PILOT program, and the remaining 5 percent would go to Middlesex County.
The school district will receive no revenue from the PILOT, but will still receive funds from the municipal land tax, according to Thompson.
“We have, in our analysis, projected 12 students, which would likely be spread over several grades … and a number of classrooms,” Thompson said. “The municipal land tax portion, we project, would cover the increased cost [of additional students].”
The land tax would generate more money than it does currently, Thompson said in an interview, because the property would be more valuable once the new development is constructed.
However, Rittenhouse said he isn’t confident with projections that the new development would only add 12 students to the school district.
“I do have a concern with that 12,” Rittenhouse said. “Two or three students under today’s guidelines from the state might require another classroom, which would then throw off all of the figures.”
Rittenhouse, along with Mayor Kennedy O’Brien, said he would prefer to consult the Sayreville Board of Education prior to approving the tax abatement.
However, McGill said the council should approve the agreement immediately, citing the proliferation of crime in the neighborhood where the development is proposed.
“I live in that section [of town] and I’d love to see something done — I’d love to see something done yesterday,” McGill said. “I just don’t want to walk away from this, this time. “I’m a culprit in this also, but we seem to drag our feet at times, and I’d like to move forward on this as soon as possible.”
O’Brien said he disagrees, preferring instead to “build a consensus” between the council and the school board prior to moving forward.
He added that he is not against the project and expects it to be approved, but feels it is appropriate to include the school board in discussions.
According to Thompson, the development would represent little or no increase in costs for municipal services and is “significantly revenue-positive” in those regards.
“The impact on municipal services is some police calls, some fire calls and some EMT calls,” Thompson said. “It is not two additional patrolmen, it is not another fire district — it is relatively minor for this sort of project. In our opinion, it is, without question, revenue-positive for the borough.”
James Smith, a partner at Highview Homes, said the developer is awaiting permits before breaking ground on the 148-unit project to be built on 29.6 acres in the Route 35 redevelopment zone.
The rental units will include 22 age-restricted units, 67 one-bedroom units and 59 two-bedroom units.
“We’re pretty much at the end [of the approval process] and we’re hoping that construction will start in the late third quarter or maybe fourth quarter,” Smith said.