The PILOT program is a 30-year financial agreement in place of traditional taxes
Harrison Township Committee authorized two Payment in Lieu of Taxes agreements on second reading at last week’s meeting. The financial agreements will be based on the final property assessments for the new Mullica Hill Surgical Arts Urban Renewal Entity, LLC being built on Clems Run Road and the Route 322 Bypass, as well as the redevelopment of Naples Ristorante.
According to Mayor Louis Manzo, the program allows for traditional taxes to be replaced with a PILOT for 30 years based on the final assessment of the property improvements, while land tax remains in traditional form by law. Those participating in a PILOT program will typically receive a slight reduction for the first 10 years as an incentive and benefit to the agreement.
“Traditionally, the municipality would keep about 15 percent of taxes; under a PILOT, the township keeps 95 percent, with 5 percent going to the county,” Manzo said. “The benefit is multiples of what we would receive for a 30-year period.”
While traditional taxes are divided to include the school districts, at 55 cents to the dollar, the PILOT program does not require the schools to receive any of the generated revenue. At the meeting on Monday, Nov. 20, resident Steve Grimshaw asked the committee if there were plans to include the local and regional school districts in these new PILOT agreements.
“In the PILOT program, the municipality would receive a tremendous benefit from the revenue, but where does that leave the schools?” Grimshaw asked.
According to Manzo, by receiving 95 percent of the PILOT payments, the committee has the opportunity to decide where the money will be “best utilized,” including the schools. On an annual basis, he said, leadership of the school districts along with members of the township committee will review budgets and determine how much revenue is needed for upcoming projects and plans, for example new labs or the implementation of full-day kindergarten. A benefit to PILOT agreements for the schools is the program is not included in the 2 percent budget cap, therefore depending on the project, the schools are able to receive a payment of more than the typical 2 percent restriction.
Additionally, Manzo said, the township is only engaging in PILOT programs with commercial properties, resulting in no increase of a student burden for the districts.
While Mullica Hill Surgical Arts Urban Renewal Entity, LLC will be following a standard PILOT program, Naples Ristorante will be receiving additional tax abatements as an incentive for Main Street redevelopment and the business’ commitment to improvements for its recently purchased liquor license last year. The final payment amounts will be determined for both commercial properties once the improvements are complete and the county provides the final assessment.
In other news:
• Manzo was sworn in by Township Solicitor Brian Duffield to continue his role as mayor after the recent election. According to Duffield, the Municipal Vacancy Law does not distinguish between an incumbent and a newly elected committee member, therefore when a person is elected to fill an unexpired term, such as Manzo, the person must be sworn in immediately to take office. By doing so, the committee voted unanimously for Manzo to remain as mayor for the remainder of the year leading up to the reorganization meeting in January, where the mayor and deputy mayor will be determined as usual by a committee vote.
• Manzo suggested at a previous committee meeting there be an ordinance drafted to require notification for residents within 200 feet of redevelopment projects. At the time, the requirement does not apply to redevelopment projects by state statute, according to Manzo, however after hearing from residents and looking to remain consistent in the notification process, the ordinance would go beyond the state requirements and allow the township to mirror the notification requirements in place for non-redevelopment projects.
According to Duffield, the ordinance is expected to be on the agenda at the next committee meeting, scheduled for 7:30 p.m. on Dec. 4.
