Editor's note: In an email sent after this article was published, Mayor Phil Greiner explained that he used the example of the development adding 50 students for purposes of illustration, and not as an estimate of exactly how many students the development is likely to add to the school systems.
FLEMINGTON, NJ – Borough Council was peppered with questions at its meeting yesterday about how Jack Cust’s proposed Union Hotel redevelopment plan might affect local property taxes.
The hotel and the rest of the block south of the hotel extending to the building just across Chorister Place will all be part of the plan – and will be exempt from property taxes, Mayor Phil Greiner explained. Instead of paying the taxes, the project will be part of what’s called a PILOT program, or payment in lieu of taxes.
“A PILOT is general revenue to the borough that reduces the tax levy,” Greiner said. But some worry that the tax exemption will result in higher taxes for others.
The concern is especially acute in Raritan Township. Township resident JoAnne Elacqua asked last week how that might affect her school taxes, because the borough and township are each members of the Flemington-Raritan and Hunterdon Central regional school districts.
Township municipal attorney Jeffrey Lehrer said last week that it depends on how the PILOT program is negotiated. The borough could include school costs in the PILOT calculation, he said, or could choose to use some of its revenue towards school taxes.
Terms of the PILOT would be enacted by ordinance, Greiner said, and could extend for up to 30 years. But in response to questions last night from borough resident Richard Giffen, Greiner said the terms of the PILOT agreement won’t be part of the borough’s redeveloper’s agreement with Cust.
That agreement “would include an understanding ... that there will be a PILOT,” Greiner said. “But the PILOT itself will have to be adopted as part of a separate process” outside the agreement.
“We have an idea of what it will be,” Greiner said of the PILOT payments. “We’re just not at a position yet of divulging what it will be. We’re not there yet. You don’t negotiate this stuff in public.”
An argument in favor of the borough’s planned PILOT is on the borough website, which Greiner said he wrote. The project “should primarily attract millennials and baby-boomers who do not tend to come with school-age children,” it states, “but there will undoubtedly be some students added to the school system.”
In the analysis, Greiner estimates the 200-250 proposed residential units could add 50 students to the system.
“Spread over 13 grades, that is three or four students per grade, which is unlikely to require an additional classroom or teacher,” he wrote.
“I thought we were trying to attract millennials,” said Council member Susan Peterson, whose anti-demolition platform helped her win election last year. “So that if we have 250 apartments, I think we may have more than 50 kids.”
Giffen told the mayor he couldn’t understand how the redeveloper’s agreement could omit detail as critical as the PILOT payments.
“If the Council concludes with public input that it is not a good financial agreement, then you don’t adopt” the redeveloper’s agreement, the mayor answered. “But we’re going forward on a number of issues where we are optimistic they will work out so the project will continue.
“But until you get there, you don’t know,” Greiner said. “We don’t know that the Planning Board will approve this thing.”
It isn’t just the Planning Board’s approval that’s in doubt.
Former borough councilman Alan Brewer called Flemington a “community divided” between those who favor Jack Cust’s plan and those who oppose it, often because it will likely involve demolition of the historic hotel.
Brewer, who plans to run for Council again in the fall, said that while getting signatures for his candidate’s petition, just one in 15 residents support the redevelopment plan.
Brewer proposed that officials send a survey to residents to gauge their preference, a request to which only Peterson responded.
She called a survey a “wonderful” idea and added, “I think it’s our responsibility to find out what the public opinion is.”
The plan won the endorsement of county freeholders at their meeting last week. Referring to the project as Courthouse Square, the group approved a resolution, stating that the plan “addresses many economic development objectives and supports long term economic viability for Hunterdon.”
The resolution states that the freeholders want to “encourage responsible redevelopment and investment in our downtown centers while retaining its rural character.”
Freeholder Rob Walton abstained from the vote. “It’s a first,” he told his fellow freeholders, with Freeholder Matt Holt absent from the meeting, “for this board to ask for a resolution to support a development project.
“I’m not necessarily opposed to the project,” Walton said. “I’m just not enamored with government endorsing projects. I don’t think that’s our place.”
Freeholder Director John Lanza noted that the project is in the county seat and has been “undertaken as a result of action by the governing body and Planning Board of our county seat and municipal government and ... I think this project will breathe some life into this town, which is so desperately needed.”