April 6th Meeting Summary

We had a very short meeting on Monday, April 6th.

The most significant action that the Council took was to introduce an ordinance to allow for a PILOT agreement for the project at 885 Bloomfield Avenue. The ordinance was introduced with a vote of 3 to 1. I voted against introduction.

A PILOT agreement is a long term tax abatement for a property. Instead of receiving taxes on the improvement on the property, the Township will receive a fee. As part of the process the Council just went through to comply with affordable housing mandates, the Council settled with this developer and agreed to give this developer a PILOT. Councilwoman Holland and I both voted against that settlement.

The terms of this PILOT are unusual as this is a for sale townhouse development - not a rental. The fee, which is called the Annual Service Charge, will be 10% of the Annual Gross Revenue. Since this is a for sale development, the Annual Gross Revenue will be the combination of two calculations. The first will take the sale price of each unit and assume that the unit was 100% financed with a 30 year mortgage. The interest and principal payments would be part of the Annual Gross Revenue. Then added to that would be the condominium association fees, which is the second part of the calculation. As these units are resold over time, the Annual Gross Revenue will change higher or lower depending on the new sales price. The unit owners pay the Annual Service Charge to the Township.

As part of what was discussed at the meeting, we negotiated with the developer to create a schedule where the unit owners will pay the greater of the Annual Service Charge or a percentage of what taxes would have been owed if no PILOT agreement was in place. Over time the percentage increases, from 0% for the first six years to 20% years 7-12, 40% years 13-18, 60% years 19-24, and 80% years 25-30. This helps to get the project to the point where the owners of each unit, towards the end of the 30 year deal, are paying close to full taxes on the property.  Depending on the sale price and the estimated taxes, at some point the owners will flip from paying 10% of the Annual Gross Revenue to the percentage of taxes that would have normally been owed.

One final note about the PILOT agreement, which is an ordinance and will have a public hearing and vote at our next meeting. Nothing about this agreement procludes the Council for sharing the Annual Service Charge with the Board of Education. That would be a seperate conversation and negotiation that could occur between the two governing bodies.

You can send your questions on this ordinance to the entire Council in advance of the meeting by sending us an email here: https://www.veronanj.org/councilcontactform.

Other actions we took at this meeting of significance:

• We designated 251 1/2 Grove as an Area in Need of Redevelopment. Expect a redevelopment plan to be on the Council agenda in the near future. This project is part of our recent affordable housing settlement.

• We passed our annual CAP Index ordinance and an ordinance making changes to zoning rules around private pool construction.

• We re-introduced an ordinance on pest control, which addresses property demolition.

• In an addendum, we had a change order to our sewage treatement plan primary clairfier pump station upgrades and we bought an electric vehicle for the Department of Community Affairs.

Our next meeting is Monday April 20th. Any comments for the Council should be sent to all five of us here: https://www.veronanj.org/councilcontactform.