Revenue from Payments In Lieu Of Taxes (PILOT) increased last year by 30 percent, about $845,000, and this year’s municipal budget anticipates another increase of 26 percent, or almost $720,000.
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.City Council introduced the municipal budget during a special meeting on July 3. A public hearing and final adoption of the spending plan is scheduled during the governing body’s Aug. 12 meeting. The $66,190,973 budget includes a tax levy of $42,390,396. The entire 2024 municipal budget is available here.
Overall PILOT revenue is anticipated to be $3,733,668, which comprises about 5.6 percent of the entire budget, and is significantly more than the $2.995 million in the 2023 budget. PILOT revenue is comprised of three aspects: redevelopment projects, affordable and senior housing developments, and state-mandated nonprofit hospital payments. PILOT revenue for the first two typically based on a percentage of a building’s annual rental revenue.
Redevelopment projects, new and old, made total payments of $3,163,339 last year, more than the $2,216,000 budgeted, almost $1 million more than the $2,216,000 budgeted, or about 42 percent. The same developments are anticipated to generate slightly less this year, some $3,039,000.
In this category, the largest increase came from Meridia Water’s Edge, which had anticipated $174,000 in the 2023 budget but realized $585,578. After several years of falling well short of the $216,000 estimated in the original PILOT agreement, the 108-unit building is anticipated to generate $585,000 again in the 2024 budget. Water’s Edge usually paid in the neighborhood of $180,000 since it opened in 2018. UPDATE, Sept. 14: The mayor’s office responded to questions about PILOT revenue in the budget, explaining that the balance of $283,577 from Water’s Edge in 2022 was received in 2023. Excluding the 2022 balance, Water’s Edge PILOT revenue would come to $302,001 for 2023.
Another boost came from The Mint, likely a result of the second phase, a 108-unit building at Poplar and Main streets, becoming operational. The Mint previously generated $112,000 but realized $409,000 last year and anticipates $360,000 in 2024, in line with its original PILOT agreement estimate.
Here’s a break down of the PILOTs in the 2024 budget:
| PROJECT | 2023 | 2023 | 2024 | PILOT |
| Anticipated | Realized | Anticipated | agreement | |
| The Brownstones | $468,000 | $604,779 | $624,000 | $489,000 |
| Water’s Edge | $174,000 | $585,578 | $585,000 | $216,000 |
| REVA Rahway | $509,000 | $583,976 | $550,000 | $383,250 |
| Rahway Plaza Apts | $480,000 | $508,054 | $500,000 | n/a |
| The Mint | $112,000 | $409,549 | $360,000 | $360,000 |
| Lafayette Village | $244,000 | $268,554 | $265,000 | $156,000 |
| Metro Rahway | $137,000 | $202,849 | $155,000 | $265,000 |
| The Gramercy | $92,000 | n/a | n/a | $78,000 |
It’s unclear why The Gramercy has incomplete information in the budget. UPDATE, Sept. 14: According to the mayor’s office, $187,074 was received from The Gramercy for 2023 but PILOT revenue for 2024 was still to be determined.
Of the eight redevelopment projects with PILOTs, Metro Rahway is the only one that hasn’t yet reached the estimated payments outlined in the original agreements. The 116-unit development on Campbell Street, between Elm Avenue and West Cherry Street, had its PILOT extended from 15 years to 30 years in 2020.
PILOTs via five affordable or senior housing totaled $407,946 in 2023, about $100,000 less than the $509,343 anticipated for 2023. The 2024 budget anticipates $403,000. A line item identified as Housing Authority anticipated $116,000 in 2023 but did not have a total realized that year or anticipated in 2024. It’s unclear whether that might be related to the reconstruction of Capobianco Plaza (look for a future post on that in the coming weeks).
| PROJECT | 2023 | 2023 | 2024 |
| Anticipated | Realized | Anticipated | |
| Housing Authority | $116,000 | n/a | n/a |
| Senior citizen housing | $323,000 | $341,280 | $340,000 |
| Meyers Sr Residence | $29,000 | $32,379 | $30,000 |
| The Willows at Rahway | $16,343 | $18,752 | $18,000 |
| Rosegate | $25,000 | $15,545 | $15,000 |
UPDATE, Sept. 14: Revenue for both 2023 and 2024 from the Housing Authority was received in 2024, according to the mayor’s office, explaining why there was nothing in the realized 2023 or anticipated 2024 columns.
Among the largest increases within PILOT revenue is almost $1 million jump from RWJ-Rahway Hospital, up from anticipated $270,000 to $1.245 million in realized revenue. The 2024 budget anticipates $291,668. It’s unclear what’s behind the massive anomaly for 2023. The state in 2022 instituted a law requiring nonprofit hospitals make a contribution equivalent to $3 per day for each licensed bed. UPDATE, Sept. 14: The spike in revenue for 2023 was a result of a settlement amount from court proceedings regarding if New Jersey hospitals should be tax exempt, according to the mayor’s office.
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