CRANFORD, NJ – The Cranford Township Committee approved an ordinance authorizing a PILOT (Payment in Lieu of Taxes) agreement with Birchwood Developers Urban Renewal Associates, LLC at Tuesday night’s meeting.
Under the agreement, Birchwood Developers will pay the township 11 percent of its annual gross revenue for the next 30 years.
“This is the final component in a long-term commitment that this township committee and previous township committees have tried to implement in order to reduce the density of the Birchwood project and I believe we’ve been successful,” Mayor Thomas Hannen, Jr. said.
Resident Allison Mennor questioned the use of a PILOT and asked what will happen if the Birchwood apartment complex remains vacant.
“This agreement also has a calculated vacancy rate that has been factored into the overall payment, so consistent with that the township will be paid these revenues not withstanding whatever the vacancy rate eventually becomes,” Hannen said.
He also mentioned that developers who do not have a PILOT agreement are able to ask for a tax reduction if they have vacancies.
“When one major development reduces their taxes, we all have to make that up somehow,” Hannen said. “This locks in the amount that the developer is going to pay over the next 30 years, so it kind of gives a guarantee to the taxpayer as to what you can expect from this project in terms of municipal reimbursement.”
Menner also stated that she hopes this ordinance does not set a precedent for future developments. In response, the committee said they purchased the property to begin with so they could reduce the density and minimize the impact on Cranford schools.
The committee also pledged to donate a portion of the payment to the board of education.
“The reduction in density is pretty close to removing the Woodmont development from that site,” Deputy Mayor Ann Dooley said. “The concerns about the schools were very significant. When you do a PILOT, the school’s not entitled to any of that, but the township committee purchased Birchwood and reduced the density to ameliorate the burden on the schools. Consistent with that, we’re giving a very significant percentage of the PILOT to the schools that they would not ordinarily get.”
Dooley, Hannen and commissioner Mary O’Connor voted “yes” to the ordinance. Commissioner Jean-Albert Maisonneuve was absent and commissioner Patrick Giblin responded “no vote.”