Dear Friends, I am trying stop our local government from giving billionaire developers huge tax exemptions which we residents will have to pay for. So far, they have promised over $150 million of our tax revenue to Birchwood, South Ave and 750 Walnut developers, with plans to offer more such exemptions to developers at North Ave/Springfield, and beyond.
These exemptions cost our schools over $70 million in lost revenue which we residents will have to pay for out of pocket. It’s roughly an additional $2,000 a year in extra taxes per household for 30 years so that the developers can make more profit off of our backs. It’s a scheme being perpetrated across NJ towns, and is only successful because residents are kept in the dark and told false narratives.
I filed a lawsuit in Superior Court to challenge the latest PILOT (Payment in lieu of Taxes) tax exemption offered to Hartz Mtn. LLC, the developers of 750 Walnut Ave. and interviewed our Committee members and the developers’ attorneys under oath. The interviews confirmed our suspicions that none of these huge 30-year tax exemptions are necessary or legally required in any way. Nor were any of the publicly stated reasons for awarding them accurate. Committee members admitted to having had little to no understanding of the financial implications when they voted for the exemptions, and confessed to relying entirely on the directions of the Town’s attorneys and never thought it necessary to question that advice.
Most concerning perhaps, it was revealed that the Town attorneys intentionally hid our financial advisers’ report from the Committee members which states unequivocally that the PILOT tax abatements are excessive by over 20% and should be renegotiated.
In the quest to uncover the truth as to why our Committee members would vote for such an extraordinary tax giveaway to a billionaire developer the following facts were uncovered which run contrary to everything the public was led to believe for the past several years.
- A PILOT means a huge loss in tax revenue to the Town. A PILOT agreement is when the developer pays @10% of their "self-reported" annual revenue to the Township instead of paying taxes. The problem is that in NJ where PILOT agreements are made, municipalities receive on average only @13-15% of the revenue that they would receive if the developer paid their taxes.
- The Township was never legally obligated to offer any PILOT or tax exemptions whatsoever to the developer.
- Cranford’s attorneys approached the developer Hartz Mtn. LLC first and asked them to accept a PILOT and 30-year tax exemption, not the other way around.
- Cranford had already met its Affordable Housing quota before negotiations with Hartz even began and so was not in jeopardy of being sued over unmet Affordable Housing.
- The Hartz threat to build 905 apartments without a PILOT was never actually a real threat. The huge project would have never been financially feasible for Hartz or any developer.
- The conventional taxes from the Land at 750 Walnut which the public was made to believe were bonus revenue we would receive, are actually being refunded every year to Hartz Mtn. LLC as a Land Tax Credit so we actually receive no bonus.
- The State can require a Township to create Affordable Housing but the State can never require a Town to offer 30-year tax exemptions or PILOT deals. If a developer owns land zoned commercial and the Town has not met its affordable housing than the developer may sue the town to force the rezoning of their property to residential. However even if a developer is able to successfully sue a town the developer can never force the town to give them a tax exemption or PILOT.
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