Hillsborough officials grant tax abatement to developer

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An ordinance to grant a tax abatement for a residential developer was approved recently by the Hillsborough Township Committee.

The decision of approval for the ordinance came at an Aug. 13 committee meeting.

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The proposed tax abatement was granted for the developer, Concord Street Urban Renewal Associates, LP, which had filed an application with the township in an attempt to seek a 30-year payment-in-lieu-of-taxes (PILOT) agreement for an affordable housing project on Estelle and South 20th streets.

A tax abatement is defined as a reduction of taxes granted by a legislative body for a business or developer as an incentive to come to a township/city to develop or expand existing operations within the area.

The project, which was approved by the township’s planning board at a July 25 board meeting, proposed the construction of a total of 88 family rental units, 87 of which would be affordable housing units and one market rate unit in 13 two-story townhouses.

Affordable housing is defined as housing that is sold or rented at below market rates to individuals and families whose income meets certain guidelines.

The developer also proposed that a portion of the property will be subdivided through a future subdivision application. The proposed subdivided land parcel is approximately 32 acres.

The parcel of property pertaining to this ordinance is also known as the Sherman Tract, which is part of a redevelopment plan. The redevelopment plan for the parcel has come before the planning board and the township committee multiple times this year.

At a February planning board meeting, officials said the purpose of the Sherman Redevelopment Plan is to establish new land use standards for what is known as the Sherman tract off Camplain Road.

The property is zoned in a rehabilitation area to which the redevelopment plan refers. Officials explained there is a 65-acre tract that was purchased by the township in 2018 for the construction of affordable housing in an effort to meet Hillsborough’s court-imposed affordable housing obligation.

Officials explained that the goals of the redevelopment plan are to allow for the creative and flexible transformation of an underused tract into a productive and stabilizing development that will complement the surrounding residential neighborhoods and directly contribute to the production of affordable housing.

Officials also said that the current objectives for the rehabilitation area are to: provide parcels of land of sufficient size and dimension to enable an orderly arrangement of new land uses; create land use and building requirements specific to the rehabilitation area that are sensitive to environmental features, particularly those associated with the Royce Brook and nearby residential uses; and curtail the encroachment of non-residential uses into the immediate neighborhood.

The Sherman Property is framed by residential uses along Camplain Road and South 20th Street. Officials said the plan would prevent any industrial incursions into the residential neighborhood and require that all of the units constructed on the site meet low- and moderate-income affordability requirements.

Although the tax abatement is intended to benefit the developer, PILOT agreements can potentially lessen the amount of tax revenues paid back to taxpayers in the community, especially the school district and fire district.

Given the amount of revenue allocated away from these sources, multiple residents spoke out during the public comment portion of the ordinance hearing to discuss their concerns with tax payment percentages being allocated toward the school district.

Although residents said they were concerned the school district would receive little benefit from the tax abatement for the developer, the township committee said they would agree to discuss the matter with the Hillsborough Township Public Schools Board of Education at a later date.

Committeeman Shawn Lipani explained at the meeting that it would be “irresponsible” to commit a certain percentage of the tax abatement payments to the school district at an immediate time. Lipani said that due to the fact that neither the township nor school district has data yet as to how many students from the proposed development will be enrolled in the public school system, the matter needs to be discussed at a future time.

“It will be four or five years until [the development] is built,” Lipani said. “We don’t know how many students are going to be here. We can only guess. For us to say that there is going to be 50 students, so we will give ‘X’ to the school board would be irresponsible. In four years from now when we have a better idea of whether there will be 20 or 80 kids in this development, we can have a better idea of what the fair share should be and negotiate that.”

Following the public comment period, the committee then made a motion to approve the ordinance and passed it unanimously.

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