The proposed municipal budget for 2021 includes almost $1.8 million in anticipated Payments In Lieu Of Taxes (PILOT), with at least two new developments expected to add $190,000 this year.
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The anticipated $1.796 million from 10 different developments would be some $300,000 more than the $1.492 million realized last year — which was also about $100,000 more than the $1.385 million originally budgeted for 2020, or about 7.7%.
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The two new developments expected to begin their PILOTs in 2021 are Reva Rahway, a 219-unit project at the former Center Circle site on Main Street, (an estimated $157,000) and The Willows, a 58-unit affordable housing facility on Central Avenue aimed at people employed in the arts industry (an estimated $32,000).
It’s unclear why other recent developments are not listed for PILOTs in the 2021 budget. The 42-unit Gramercy on East Cherry Street was completed in 2018; that’s the same year that The Willows was completed but this is the first year it’s appeared as a PILOT in the municipal budget. The first phase of The Mint, 116 units on Main Street, opened last year but it could since it was a two-phase project that the PILOT doesn’t begin until all phases are completed, as was the case with Park Square on Irving and Main streets.
Meridia Lafayette Village, a 115-unit building at Main and Monroe streets, saw the biggest jump in its PILOT from 2020, with the city realizing almost $250,000, compared to the $180,000 anticipated in the budget. The largest PILOT by far is Rahway Plaza Apartments, which generated $527,178 last year versus an anticipated $490,000.
PILOTs are usually based on 10% of annual gross revenue of a building, as stipulated in the PILOT agreement negotiated and then approved by City Council. The city receives 95% of the payment, with 5% to the county.
Last year, City Council extended the PILOT for the 115-unit Metro Rahway from 15 to 30 years, running through 2045. The original agreement anticipated an annual service charge of $265,000 but the project has yet to reach that level after a high of $231,000 in its first year (2016).
A PILOT for River Place is no longer listed as a line-item in the budget since the city in 2018 dissolved the Parking Authority and created a Parking Utility. The 136-unit development was built on property owned by the Parking Authority and a $340,000 annual payment was split about evenly between the city and authority.
City Council is scheduled to hold a public hearing on the 2021 municipal budget during a special meeting on June 17 at 6:30 p.m. The $58.6-million spending plan was introduced by the governing body during a special meeting in May. The municipal tax levy — the amount to be raised by taxation — is slated to be $39.1 million, up from $38.9 million, or about 0.39%.
Municipal taxes are expected to remain about $3,611 for the average home, assessed at $133,000, and the municipal tax rate would remain at $2.72 per $100 of assessed value.
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