Friday, December 18, 2015

State Report Has Guidance for City on PILOTs

A 2010 state report on municipal tax abatements supports a city resident's call Monday for a cost-benefit analysis before any "payment in lieu of taxes" plan is approved.

Among other recommendations, the report said "abatements should be granted only when necessary to attract development that would not otherwise occur," which was exactly why another resident spoke in favor of the PILOT approved Monday for Sleepy Hollow Developers Urban Renewal LLC

Richard Loosli spoke against the 30-year PILOT agreement, calling it "inadequate and unfair to current residents," but Alan Goldstein challenged Loosli's estimation of revenues and said chances of getting more were "very slim."

Loosli and Goldstein were the only speakers at a public hearing before final approval of the agreement, which was stalled last summer despite the developer's plea for action so the site could be cleared before winter.

The neighborhood to be developed currently has about a dozen homes and businesses, some vacant, that would be acquired and cleared to make one big lot for a 212-unit apartment complex with many amenities, close to the Netherwood train station. The developer estimated $3.8 million in revenues from the existing properties over 30 years, in contrast with a $10 million yield to the city from the PILOT plan. The deal is regarded by some as almost a test case for more developers choosing Plainfield, which has not yet met with as much favor for development as other municipalities along the Raritan Valley Line.

As more development comes in, more financial agreements are sure to follow. The City Council approved another one Monday for Plainfield Genesis Affordable Housing LLC, which with the YMCA is converting 60 single-room occupancy units to 30 studio apartments for young people aging out of foster care. The housing will come with many kinds of support to  help the residents become self-supporting.

The city previously had 10 PILOT agreements. ( This link also has a pitch for the state report.)

An agreement made about 30 years ago has now become the subject of a lawsuit over alleged payment miscalculations, as reported in the Courier News earlier this month. In 2008, a typo on a PILOT amount had officials scrambling for ways to avoid a $1.7 million tax deficit.

All of the above points to the need for closer attention to PILOTs, whether old or new.

--Bernice

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