Editor’s note: This letter is addressed to Flemington’s Mayor and Borough Council regarding the Beacon report, but has also been submitted to TAPinto Flemington.


Let me begin by reiterating that we are committed to reversing the decline of Flemington Borough with a mixed-use project that will be the catalyst to a future defined by a robust downtown that rivals the best small towns in New Jersey. In that regard, we truly believe that our proposed $70 million-plus investment in this community makes us the real Friends of Flemington Borough.

As you know we received the Beacon Report along with the public late last week. We were pleased to see it confirmed several important points about Courthouse Square. First, it confirmed, in unequivocal terms on page 12, that without the PILOT “the project is not feasible to undertake.” Second, it confirmed that the Courthouse Square Project will generate approximately $600,000 in revenues (including the hotel tax described below) to the Borough, School District and County. Third, it confirmed that the Borough is responsible to fund the new Police Building; albeit at a much higher cost than is reasonable. And finally, the Beacon Report acknowledges that the proposed Courthouse Square Project has financial and other benefits well beyond those analyzed in the report. These include the restoration of the Union Hotel façade and continuation of a hotel use, redevelopment of vacant and underutilized properties, diversification of housing within the community, increased support for local businesses, community revitalization and indirect financial benefits that will result from a vibrant downtown such as reduced vacancies, higher rents and rising property values throughout the Borough.

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Unfortunately, however, the Beacon Report failed to account for several critical items that, consequently, skewed the results. This is particularly troubling because our counsel highlighted many of these issues almost four months ago in a letter sent to the Borough. These items are as follows:

First, revenues expected to be generated from Courthouse Square are understated. They omit the 3 percent Hotel tax; an amount estimated to be $113,880. They also omit the $2 million well contribution that must occur regardless of whether Courthouse Square moves forward.

Second, costs estimated to be borne by Borough taxpayers are significantly overstated as follows:

Assuming for this purpose, that the estimated number of school children is accurate and the increased cost to the two school districts for each new school child is also accurate (two assumptions we strongly disagree with) one cannot ignore the fact that the Borough taxpayers are not responsible for 100 percent of such cost. In fact, Borough taxpayers pay only a fraction of school district costs, less than 5 percent of Hunterdon Regional School District costs and approximately 10 percent of Flemington-Raritan School District costs. Not to mention that an argument can be made, using the “case study” method which applies a practical approach to the cost analysis, that as a result of declining student enrollment there is more than enough capacity in the classrooms to accommodate 25 students dispersed among grades K-12 without any impact.

The Beacon Report further states that two new police officers with two new vehicles at a cost of $190,000 will be required. We respectfully disagree with this assumption. The previous administration felt that there would be no increase in the police force attributable to Courthouse Square. Nevertheless, to be conservative we would agree that one police officer and vehicle be included in a fiscal impact analysis.

Based upon input from the Borough, the Beacon Report draws a far-reaching conclusion that a new Police Building will be required, as a result of Courthouse Square, that is three times the size of the current building. Not only is the size of this new 10,000-square-foot building unwarranted, the projected price used in the Beacon Report of $560 per square foot is excessive resulting in a ridiculously high estimated cost of $5.6 million. The Beacon Report further assumes that, after utilizing the sales proceeds of $1.1 million from the existing building, the new Police Building would have a net cost of $4.5 million. The report assumes financing at 3.5 percent requiring annual debt service payments of $317,000 for 20 years. Before even arguing the very high projected building costs, it should be noted that annual debt service could easily be reduced by $74,500 if it was financed over 30 years instead of 20 years. (Depending on the actual construction materials or the applicable statute pursuant to which the Police Building is financed, we believe a 30-year bond issue is legal and appropriate.) In that case, the annual payments would be $242,500 instead of $317,000. Further reducing the size and cost of the new Police Building to twice its current size (instead of three times) should further reduce costs by $94,500 (total savings of $169,000) in debt service over 30 years.

To recap the above, in round numbers, the impact to Borough taxpayers from new school children (assuming Beacon’s total cost estimate, using the most recent Rutgers report and the higher percentage of 10 percent) is conservatively $23,720 (not $237,200). Reducing the number of additional police officers to 1 makes the Borough budget impact $95,000 (not $190,000). And borrowing over 30 years instead 20 years for the Police Building saves $74,500 while reducing size of new Police Building (without reducing the per square foot cost) saves an additional $94,500. Finally, to be fair, we should be given credit for avoided debt service by the Borough for our $2 million contribution to a new water well. With these adjustments, a reasonable net direct fiscal benefit to the Borough is about $450,000.






ASC/Tax Revenues




Hotel Tax

$          0



Total Revenues








School District Cost


$ 23,720

$ 23,720

Municipal Costs


$ 95,000

$ 95,000

Police Building Debt Service




Well Debt Service Credit

$          0



Total Costs




Net Benefit/(Cost)




In addition, the multiplier effect will be in the millions as businesses flourish, property values increase, and a once proud downtown is restored to its former glory. Important historical buildings will be restored and placed back in commerce. Much needed water reserves will be expanded for all residents. In short, our $70 million-plus investment in the Borough of Flemington will be a game changer for decades and generations to come.

We believe any and all the differences in assumptions described above can easily be overcome and we continue to look forward to working with the Mayor and Council to find solutions for the mutual benefit of all taxpayers and residents in our community. We request that this letter be considered, and the Beacon Report be revised to address the issues raised herein.

Jack Cust