Lopatcong Council Debates $10 Million PILOT Deal for Warehouse Redevelopment

The Lopatcong Town Council meeting on February 5, 2025, primarily focused on a proposed Payment in Lieu of Taxes (PILOT) agreement for the redevelopment of the former Phillipsburg Mall site into a warehouse distribution center. The council deliberated on the financial implications, potential benefits, and community concerns surrounding the PILOT program, which is expected to generate more revenue than traditional taxation methods.

0:00The centerpiece of the meeting was a discussion led by an attorney about the PILOT program, designed to incentivize the redevelopment of the mall site. The plan involves transforming the area into a vast warehouse distribution center, spanning over 800,000 square feet, with Lopatcong controlling approximately 456,000 square feet of the property. The PILOT agreement allows the developer to pay an annual service charge instead of regular property taxes, a measure intended to make the project more financially viable while ensuring the township receives a fair return.

The financial architecture of the PILOT program was a focal point, with an explanation that, although regular taxes would not be paid during the PILOT period, the developer would remain responsible for land taxes. This arrangement enables the township to retain a higher percentage of revenue compared to a standard tax-sharing model. A concern raised during the meeting was the potential impact on the local school district, which typically relies on tax revenue. However, it was clarified that the school district would not lose revenue from its levy, as the PILOT funds would be allocated differently, and the warehouse would not contribute to an increase in school-age children.

The proposed 30-year duration of the PILOT agreement was scrutinized, with questions about the guarantees of payment over its lifespan. While there is no absolute assurance that the warehouse will operate throughout the entire term, state law mandates a minimum baseline payment. This baseline is a safeguard against potential revenue loss, given the property’s current low tax contribution.

12:23Some council members and attendees voiced concerns about the PILOT’s long-term implications, questioning if it might hinder future tax revenue growth. Comparisons were drawn to historical rental prices. Others speculated about potential adverse effects on homeowners and tenants, who might bear the financial consequences of decisions regarding commercial developments.

Public comments included skepticism about the necessity of incentivizing another warehouse project, with suggestions that PILOT funds could be partially allocated to local schools. Despite these concerns, proponents of the agreement pointed out that the township would gain approximately $10 million more over 30 years compared to regular taxes, retaining 95% of PILOT revenues. This was contrasted with the typical distribution of taxes among various entities, including the county and school district.

The financial expectations and timeline for the warehouse’s construction were also outlined, with the developer aiming for completion by the end of 2025. The PILOT agreement would commence after the issuance of a Certificate of Occupancy, at which point the township would begin receiving payments. Concerns about the project’s financial viability were alleviated by noting the developer’s experience in similar ventures along the Eastern Seaboard and their due diligence.

27:27The meeting also addressed other matters, such as the approval of several ordinances and a sewer agreement update from the mayor. Notably, a financial request from the Lopatcong Athletic Association was approved, covering costs for lights used in the previous fall. Announcements included the resignation of a Deputy OEM Coordinator and the appointment of a new sergeant to the position. Reports from various departments highlighted ongoing projects, traffic and fire department activities, and community engagement initiatives.

43:00The Shade Tree Commission presented plans for tree safety projects and an Arbor Day celebration involving local students, while a public comment period raised issues about the PILOT program and its potential tax implications. Concerns about audibility during meetings prompted calls for improved sound systems.

Note: This meeting summary was generated by AI, which can occasionally misspell names, misattribute actions, and state inaccuracies. This summary is intended to be a starting point and you should review the meeting record linked above before acting on anything you read. If we got something wrong, let us know. We’re working every day to improve our process in pursuit of universal local government transparency.

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