SPRINGFIELD, NJ - In the last official government meeting before ballots were cast, the Springfield Township Committee heard the first reading of an ordinance designed to help move downtown development forward.
After the Springfield Planning Board passed a resolution in their November meeting allowing SPDSAIL to begin construction at 226 Morris Ave., the Township Committee looked at an ordinance that would allow for a long-term tax exemption on the site. In the Oct. 23 meeting, Committeewoman Diane Stampoulos and Committeeman Chris Capodice both said they were uncomfortable moving forward on what would be a 30-year tax abatement at the site without further clarification.
Specifically, both committee members were looking for clarification on why it would be prudent for the committee to move forward on such a lengthy agreement, and what benefit the abatement would have over charging a regular tax rate.
Matthew Jessup, an attorney with the McManimon, Scotland and Baumann law firm who specializes in public finance and redevelopment issues, was brought in by the Township Committee to clarify the information Stampoulos and Capodice were looking for. Jessup consulted with the township committee and also spoke in public at the meeting.
Jessup said that the program, know as Payment In Lieu Of Taxes (PILOT), is a way for municipalities to collect revenue from improvements made to areas in need of redevelopment in their towns. In an email response, Jessup laid out exactly what factors are calculated to figure out the PILOT.
"The agreed upon PILOT amount is the product of the redeveloper’s project pro forma, which includes construction costs certified by an architect or engineer, project operating and maintenance expenses once the project is complete and occupied and the projected residential and commercial rental revenue generated by the project," he said. "All of that information is first validated by the township’s independent financial consultant, and then used to determine what PILOT percentage can be charged that provides fair tax income to the Township while still providing a return on investment to the redeveloper and his investors that meets market demands."
Along with the information he provided about the PILOT, Jessup said at the meeting that the 30-year term of the abatement would address stability in the redevelopers finances and help them figure out what they would be paying for a longer range of time.
After Jessup presented his testimony, the township committee voted to approve the first reading of the ordinance and send it forward to the second reading. That second reading will be presented at the Township Committee meeting on Nov. 27.
After the meeting, Committeeman Chris Capodice said his reservations about moving forward on the abatement were put to rest by Jessup's testimony.
"As I said in the last meeting, I certainly had my reservations about the tax abatement as it spoke to the PILOT," Capodice said. "But after meeting with Matt Jessup, based on his experience and his breadth of knowledge about these types of cases, I am more than confident that we are definitely on our way to finally seeing the vibrant downtown that we all can come to expect."
The next township committee meeting in Nov. 27 at 7:00 p.m.