Council Approves PILOT For Princeton Seminary Site
PRINCETON, NJ — Princeton Council met on Dec. 19 and approved an ordinance granting a payment in lieu of taxes (PILOT) agreement to the redeveloper of the Princeton Theological Seminary site.
HP 108 Stockton Urban Renewal LLC plans to build a multi-family residential development of 240 units, which includes 48 affordable housing units.
The PILOT agreement exempts the developer from paying taxes for 30 to 35 years. During this time, 95 percent in special payments will be made to the Municipality and 5 percent to Mercer County.
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Sherry Tracy, of Phoenix Advisors, said the project has a great concept plan that goes beyond satisfying Princeton’s affordable housing obligation.
“Obviously costs are more than they would be if we were just developing a square, rectangular box of apartment units. With that, as with a lot of projects, it does necessitate the need for a PILOT,” said Tracy, who is the financial advisor for the Municipality.
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“Through our financial analysis, just in order to be actually financiable, the margins are very thin even with the PILOT. This is something that has been worked on very carefully.”
Tracy said officials were able to negotiate 12 percent from the PILOT program which would benefit the community greatly.
Earlier that day, Princeton Public Schools released a statement urging the Council to share funds from the PILOT program with the school district. The Board of Education argued that with new housing, the district will have to accommodate more students while maintaining the quality of programming in schools, for which additional funds would be needed.
Council President Mia Sacks said the BOE and Council would like to set a model of collaboration in the state, but the issue was “legally complicated.”
“It is possible to direct PILOT funds towards facilities, upgrades, and expansion. The Council has said publicly on many occasions in the last five years that they are open to that. One of the issues is whether that is more cost effective for the taxpayers,” Sacks said.
She brought up the upcoming referendum saying if constructed in a certian way, it provides 40 percent in reimbursement. “But the question is whether the Municipality is directing funds for what would othersie be goign to referendum, then we would not be eligible for that 40 percent from the state,” Sacks said.
Council president said the officials from the Municipalities and state have grappled with the question of whether or not PILOT funds could be committed to operational expenses.
Former Councilwoman Jo Butler criticized the current Council for passing the important ordinance at a time when people are districted by the holidays.
Citing several issues with the project, Butler said, “I don’t want to subsidize a luxury, vanity project. This proposed rents are outrageous and come at the expense of surrounding neighbors and the schools.”
She said the PILOT makes Princeton more expensive for residents. “I would urge you to postpone this decision for a few weeks to give the public the time to get through the holidays and give this the attention it deserves,” Butler told Council.
Council voted unanimously on the ordinance.
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