I have read the recent candidate statement as well as some social media posts which suggest that the Town somehow “missed out” on charging the owners of the affordable housing projects a surcharge or imposing a “development fee” as a condition of approving those projects. While I am sure this suggestion is well-intentioned, it shows a fundamental misunderstanding of what the affordable housing and Payment in Lieu of Taxes (“PILOT”) process allows. As an aside, the process and these projects have been discussed for well over a year and the concept of using a development fee to improve fields have not been brought up until now, 1 week before the election day.
Let me set the record straight: (1) You are unable to layer on charges such as an impact fee on affordable housing projects without the Town paying for it one way or another; (2) The PILOT is a tool in our toolbox to get better looking projects, lower density (a decrease in the number of units) and taxes coming directly to our town (95%) with 5% going to the County—Normally the County gets around 25%. When the Town Council negotiated the Kings and Locust properties (Connell is not eligible for one), they required lower density (Locust: 300+ market rate demand by developer vs. 196 age-restricted actual; Kings: 180 demanded vs. 150 to be built), plus better building construction design while meeting affordable housing requirements. Some examples we negotiated in ADDITION to the above requirements are: Locust Ave - Sidewalk enhancements along Locust to the Berkeley Heights Community Pool and a TRAFFIC LIGHT on Snyder and Locust; Kings property - negotiated all parking inside the structure and streetlight and sidewalk improvements to Sherman avenue all the way to Plainfield Ave. It is ALL ON the developer to add these enhancements not on the tax payer as well the TOWN gets the benefits of the PILOT payments. Additionally for Locust the developer originally wanted a 10% PILOT payment and we were able to negotiate a 13% payment. The Town can use this increased revenue to pay down debt, add to our surplus or for other capital improvements including fields. Our experts all examined this (Lawyer, Appraiser, Planner, CFO) from a financial, construction and legal perspective. It is very simple--By asking for another fee the developers would simply look for more money (lower PILOT payments), more units to pay for the extra costs of development fees, eliminate the construction enhancements, and go back to court.
The last thing we want is more units or blight in our small town. The Town Council did everything plus more to negotiate with developers while dropping the number of overall affordable units from 858 to around 200 hundred that will actually be built. I am very proud of what we have done as I believe it is in the best interest of the residents of Berkeley Heights.
Here are the links to the Pilot explanations:
Look at the Town Council Meeting starting at 34:56 when Matt Jessup who is the EXPERT discusses PILOTs. He is the Redevelopment Bond Counsel and Pilot Counsel. He even states that our requirements of aesthetics were strong and he very rarely sees a pilot negotiated over 10% and our Town Council negotiated 13%!
https://livestream.com/bhtwp/events/7860719/videos/164872709 Starting at 34:56
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