Letters to the Editor

What is True Cost of PILOT Tax Program?

To the editor:

Flemington Borough Council has failed to answer the fundamental question of what the proposed tax abatements for Jack Cust will actually cost county taxpayers, and for how long.

A two-page explanation on the use of PILOT (Payment in Lieu of Taxes) programs, written by but not credited to Mayor Phil Greiner, was posted to the borough’s website, HistoricFlemington.com, on Feb. 21. Essentially it says that tax abatements are complicated and our borough and county government is to be trusted to serve public interests.

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At the Feb. 27 regular meeting of the Flemington Borough Council, it was announced that Council will proceed with a vote to move forward on the developer agreement. Details the PILOT program would follow later as a separate ordinance for vote sometime in the future. Again, trust the Borough Council.

Mayor Greiner presents that a separate vote on the PILOT program is a safeguard, however the 2010 state Report of the Comptroller, “A Programmatic Examination of Municipal Tax Abatements” offers the following caution:

“[such] processes ... tend to limit meaningful public involvement ... In addressing particular projects, the public generally is limited to the ordinance process. This gives them little opportunity to influence outcomes since internal committees make most specific determinations before an ordinance is introduced and, as reported by the local officials we interviewed, these ordinances generally are assured of passage once introduced.”

The Comptroller’s caution should be heeded in Flemington. When has this Borough Council ever voted anything but full approval for the Cust plan, at any stage? Remarkably, Council meetings have also not been recorded since Jack Cust presented in August, 2016. This summer the proposed six-story development, already 50 percent higher that the approved 2015 Master Plan called for, grew to seven and eight-stories which is double the approved height, and Mayor Greiner commented that it “it looks like our town now.” Really?

The substantial height and density sought by Jack Cust has gone unchecked, dismissed as necessary to make the deal economically feasible. However, like other aspects of this project the developer’s claims of cost, and his ability to finance this enormous project have never received critical, transparent review. How can this community have any faith in their representatives to negotiate the best deal for the borough? What evidence is there of “negotiation” when advocacy for the interests of one developer, who secured his position as the designated developer on the basis of buying a liquor license, is their focus?

It may have been easier for the Council not to put the current redevelopment effort for the Union Hotel block out for competitive bid, not making Requests for Proposal. However, this action undermines the process and credibility of the Council. Unlike the Global Ag site redevelopment, the tried and true strategy here has been to play on fears that there are no alternatives and to ignore that the sweetheart deal afforded to Jack Cust will set a dangerous precedent for future projects.

Again, a caution from the state Report of the Comptroller:

“Many municipalities told us that long-term abatement applications in their town were rarely, if ever, denied, bringing into question the robustness of cost-benefit analyses being undertaken. Many local tax assessors reported not being involved in the process at all, even though they would seem relevant to any review of tax impact. Some municipalities have committees of municipal officials who review abatement applications and make recommendations to the governing body. Notably absent from these committees, however, are county and school district representatives, another example of the current system’s failure to adequately consider these interests. Even the temporal span of particular long-term abatements seemed to be tied more to how conservative the municipality is towards abatements than to calculated determinations of how long the development needed a subsidy. In short, current requirements and processes could be enhanced to ensure that comprehensive analysis occurs to distinguish worthwhile projects from unnecessary giveaways.”  

Greiner and others can stick to their story that the PILOT program is complicated to avoid the details, but real leaders can explain solutions in simple terms. Rather than just promising the borough and surrounding municipalities that the project won’t increase taxes, let’s start with an account of the tax revenue that the current Union Hotel block project should generate without a PILOT. Then specify what is Jack Cust’s proposed payment in lieu of taxes. We can figure out the rest.

Michael Harris

Flemington

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer. Click here to submit a Letter to the Editor.

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At the Flemington Borough Council meeting on Aug. 22, 2016, Jack Cust presented his Main Street redevelopment plan, and when questioned if it would increase taxes for Borough ratepayers, the developer promised that “any infrastructure costs would be absorbed by the development.” Cust made the following ...