NORTH CALDWELL, NJ — A settlement agreement over the Borough of North Caldwell’s obligation to provide affordable housing, which has been the subject of negotiations and judicial actions for nearly 11 years, may be drawing to a close, as North Caldwell is near inking a pact that could protect North Caldwell from so-called “Builder’s Remedy Lawsuits” for about a decade.

Concerns about tax implications of the influx of a large number of residents in proposed developments and its effect on borough schools and other services brought residents to Tuesday’s borough council meeting.

Due to several proposed developments in North Caldwell, the borough’s board of education is contemplating a potential referendum that could lead to an estimated $39 million in new school construction over the next several years.

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One of the developments under consideration is situated in the "Hilltop area" of the borough.

A history of the Hilltop development and the borough’s involvement with New Jersey fair share housing obligation regulations was outlined at the council meeting by Erik Nolan, an associate with Jeffrey R. Surenian Associates, the firm assisting North Caldwell with its response to fair housing legislation and litigation.

Nolan gave his presentation partially in response to questions raised at the meeting by resident Alex Opper, who said he has been to school board meetings concerning a possible facilities construction referendum. He wanted to know where the borough stood on the affordable housing situation and what number of affordable units were encompassed in the borough’s obligation.

Nolan explained that the state Council on Affordable Housing decided almost 20 years ago that New Jersey municipalities could be protected from Builders’ Remedy litigation if they were granted immunity by agreeing to provide for the construction of a certain number of affordable units.

He noted that builders’ remedy lawsuit, which stemmed from fair housing litigation involved the municipality of Mount Laurel, would result in builders being permitted to construct a certain number of housing units if they set aside a certain percentage of total units in a development for affordable or low-income housing.

In response to this, according to Nolan, North Caldwell began negotiating in 2006 for a compromise in its obligation and sought immunity from Builders’ Remedy litigation. In 2008, he noted, the borough began negotiating with K. Hovnanian Developers over a site known as the Hilltop area.

In 2013, the borough and Hovnanian reached an agreement through which five acres of the Hilltop area would be deeded over to the borough for development of 50 units of affordable apartment housing with Hovnanian allowed to build 62 single-family homes on 31 acres of the site, which formerly housed the Essex County jail annex.

North Caldwell then sought developers for the affordable housing development and 17 came forward with proposals, according to Nolan.

He noted that the list was first narrowed down to four contenders, and RPM Associates was selected last December as the developer of the site.

Nolan added that, under current state affordable housing regulations, RPM has until May 2 of this year to have tax credits approved to pave the way for moving the North Caldwell process forward. He said the borough planning board already has approved of the RPM plan.

The housing expert said that approved developers would be permitted to provide PILOTs (payments in lieu of taxes) to hosting municipalities.

He said 95 percent of the PILOTs would go to the hosting community and the other 5 percent to Essex County.

Nolan estimated the payments at $22,000 in the first years, rising to $40,000 after 30 years. During the 30 years, the property would be “deed restricted,” reserving it for affordable housing.

An ordinance granting a long-term tax exemption and execution of a financial agreement with White Rock Urban Renewal Associates, the parent firm of RPM, was also adopted at the meeting.

Borough attorney David Paris said that the ordinance was necessary to fulfill state statutes relating to the agreements concerning PILOTs.

Nolan explained at the meeting that, under development agreements such as the one between North Caldwell and RPM, communities were given a “two-for-one bonus”—meaning that they received twice as much credit for the building of each affordable housing unit.

Also factored into the equation, he added, was a ratio for vacant land still remaining in the borough.

Currently, he noted, it looks like the borough will have a credit of 50 units for the Hilltop project, with credits of about 14 at a number of sites scattered throughout the borough and some possible future “overlay zones,” where affordable housing could be built in zones not normally set aside for that use once the current uses on those sites no longer were on the sites.

The overlay zones, he said, would most likely be in the Bloomfield Avenue area.

Responding to a question from Opper, the housing expert said the Bloomfield Country Club site would not currently be considered as a potential affordable housing site because it still operates as a country club.

Nolan noted that the signing of a final settlement agreement would protect the borough from litigation for 10 years. He added that early negotiating figures had the township’s overall obligation as high as 607 units.

That figure, he said was eventually brought down to a possible 360 units, which would be reduced by the 14 mentioned previously.

However, Nolan noted, E-Consultants, a housing expertise firm hired by a consortium of municipalities potentially affected by affordable housing litigation, placed the number closer to 111.

Resident Julia Petrillo asked, however, which numbers the borough was anticipating in its negotiations for a final settlement.

Parish replied that the Fair Share Housing Corporation, which initiated the original fair share housing litigation, wanted as many affordable housing units as it could get constructed, while the Builders’ Association wanted to build as many units as possible. The borough council replied that it would like to keep the obligation as low as it felt it was obligated to build.

He said borough officials had to be careful in the numbers they spoke about because North Caldwell could face a declaratory judgment action that could force it to settle on a number it felt did not serve the interests of its residents.

Petrillo, however, said there should be more communication between the borough council and the North Caldwell Board of Education in order to keep the public informed and not have borough residents paying for school facilities that might not be needed in the future.

Petrillo’s comments were supported by West Essex Regional Board of Education member Judith Amorim Dias, who said the younger generation was more in tune with social media and borough and local school officials needed to make more use of online media in getting their message across.

Mayor Joseph Alessi said borough officials would look into increasing communications about the affordable housing plans and school referenda on social media, but council president Cynthia Santomauro noted the 6000-resident borough could not afford a large staff dedicated to social media like many larger communities.

Paris also noted that the council, in negotiations for the affordable housing development, tried to make them as close in character to existing development in North Caldwell by ensuring that each of the one-to three-bedroom apartments would have a garage and each unit would have its own washer and dryer rather than having communal laundry rooms in the development.

In response to questions from Dias, RPM vice president for development Joseph Portello said the units would be designed for families and not age-restricted.

Portello added that criminal background checks would be done on all potential tenants and each would have to prove they met United States Department of Housing and Urban Development income standards.

He also noted that the exteriors of the units would be Colonial in character and the interiors would feature stainless steel appliances in the kitchens with hardwood floors and upscale touches in the bathrooms.

One-bedroom apartments would rent for around $950 per month he said, with two-bedroom units around $1,150 and three-bedroom units at $1,319.

Income levels would range from less than $40,000 per year for the one-bedroom units to under $66,000 per year for three-bedroom units, according to Portello. He said the units would be designed to house two persons per bedroom.

Portello also said marketing for the units would start locally and would follow federal regulations beyond that.

On another matter at Tuesday’s meeting, attorney Carmen Campanille said his clients, who own property on Main Street near Hillside Avenue, had difficulty keeping retail tenants because of borough restrictions on commercial parking in the area.

A landlord who owns property that housed Sofia’s restaurant said his tenant was forced to shut down because his customers could not find on-street parking.

Council members and police chief Mark Deuer said they had little control over parking on Main Street because that street is located in Little Falls, not North Caldwell.

They also said residents of Hillside Avenue had complained in the past about truck and other commercial parking on the borough street. Additionally, they said, there are few spots available on the street because residents do not have garages and their driveways are not long enough to accommodate two cars that are common in many families.

Council members, the police chief and the mayor said that they would work to adjust parking regulations. They also suggested that the landlord work with establishments such as Mavis Tire, which recently took over the STS Tire franchise in the area to see if tenants could again lease space there as they had when STS operated its facility in the area.