Despite a couple of objections from residents, the Bayonne City Council unanimously approved a 30-year payment in lieu of taxes (PILOT) agreement that will bring a 40-acre commercial development to Harbor Station South.
By Katherine Guest
With the financial agreement, construction of the future retail center, located off of Route 440, must begin within a two-year time frame.
Peter Franco, a longtime Mayor Jimmy Davis critic who has voiced his concerns about PILOT agreements, stressed his concerns about whether or not the Bayonne Board of Education has enough financial security.
Considering the school’s district current budget crisis, Franco also suggested “educational oversight” from the city council.
During last night’s meeting, the council explained that the BOE has no voice on PILOTs the council approves. The council later noted that the school board’s financial issues are more due to overspending.
Earlier this month, the BOE asked the council to reconsider allocated only five percent of revenue from PILOT agreements to the school district.
Resident Mike Morris applauded the city for publicly acknowledging that the BOE’s spending is “out of control” and called for a federal investigation.
Third Ward Council Gary La Pelusa, who typically votes against PILOT agreements, said taxpayers will receive the millstone of the PILOT discount. He then commented on how the Board of Education should be accountable for their overspending saying, “The board of ed should run as a business.”
“Ultimately, why I haven’t been a part of PILOTS [is] because the taxpayers really bare the burden of the PILOT discount where you get the developer locked into the discount and that’s the unfair part of it. Who’s paying for this?” he questioned.
“If the tax levy is high, all of us are going to pay for that,” he also stated, but ultimately determined that the positive financial outcome for the city far outweighs the detriment.
The PILOT will direct two percent of the project’s cost to the city in payments incrementally increasing to 3.2 percent over time.
The project’s total cost is estimated at $21,075,000. Overall, during the construction period, is estimated to generate approximately $421,500 in annual revenue for the city annually, according to a copy of the agreement.
According to city officials, 90 percent of the revenue gained will go to the city while 5 percent will go to the school district and county.