PLUMSTED – Residents came out seeking a response and time table to fix an issue regarding a PILOT (Payment In Lieu Of Taxes) program between a leading building firm, (Lennar) and the township during a recent Committee meeting.
Resident Dominic Griffo of Temple Road returned to address the governing body, restating that as a result of the PILOT, owners of their Lennar units are ineligible for certain federal benefits.
A Payment In Lieu Of Taxes is a deal between a developer and a town. Instead of the developer paying property tax, it pays a set amount, which would be lower. It’s an incentive to get builders to work with towns. Lennar’s PILOT program is for 30 years and for the first five years, the builder will pay a reduced rate based on taxes and then after year five, years six-30 will be at the regular rate. The development is located off Province Line Road, and is called Venue at Longview.
“We respectfully request your response and a plan of action to correct this issue within the next 30 days,” Griffo said. He also came to the township for help months ago.
He wasn’t alone in expressing his frustration. Other residents also came forward to talk about the PILOT program and put the governing body on notice that they want a solution.
“We discovered that we are a party to a contract that was negotiated for over two years between the township and Lennar to develop an over 55 (age restricted) community. It appears that Lennar will not have to pay real estate taxes during the construction period,” Griffo said.
“They were able to buy land from the township, a very beneficial transaction. They were able to market a five-year tax abatement which we believe was part of the purchase price,” Griffo said. “The township will be able to declare the area a redevelopment zone.”
The agreement allows for the construction of a water and sewer system that will support local businesses. The PILOT program also allows the township to collect PILOT funds for 30 years instead of taxes on the buyers of the completed units.
There is information explaining what a PILOT program is on the township’s website. Griffo said he was disappointed to learn that this information was originally “buried in the Municipal Utilities Authority section of the webpage and not placed or positioned in a more relevant area.”
The website explanation states in the first paragraph that after “the closing of your home you entered into the PILOT program and will no longer be paying property taxes. Therefore, you will not be eligible for any totally disabled veterans, veterans, Senior Freeze, Homestead Rebate, ANCHOR or other incentive programs.”
During an interview with The Jackson Times, Griffo said, “it is very disheartening because they created a program without the disclosure to residents about what the program was. They created this program so that they can basically maintain 95% of revenue generated from that program which is basically in excess of $115 million over 30 years to fund the sewer project which according to the mayor (Robert Bowen) will cost the town $59.4 million.”
“I’m not saying that the savings should equal what the costs are but at the end of the day when you are putting a burden on an age restricted community almost well over two times the amount that you need, that is just out of line,” he added.
Griffo stressed that while the transaction is a win for Lennar and the township, buyers of the units were uninformed that they were party to a financial agreement between the Plumsted and Lennar. “Nowhere were we told that we would not be eligible to apply for the Senior Freeze program. We are in an over 55 community, does that make sense?”
“The ANCHOR program deducting payments from our statements means we are not able to file an appeal. This is our community and we need you to help the existing owners of the development and just as important, for future owners,” Griffo said.
Griffo said he had a meeting with Mayor Bowen, Committeeman Leonard Grilletto and a member of the township’s finance department where he outlined his thoughts on how the program could be structured.
He said township officials contacted the New Jersey Department of Consumer Affairs (NJDCA) that administers these programs and heard nothing back from that agency. “You don’t need to go to the State Department of Consumer Affairs, this is your program, you got approval from them to do it because you needed to fund this project, fix it.”
Mayor Bowen responded, “you have requested, and I think the Committee is in agreement, that the best solution would be for residents to be eligible for these state programs after the five-year reduced fee.”
“We are being told we are not eligible for these programs,” Griffo said.
“For me, the best possible result would be for you to be eligible for these state discounts. We are, as we said we would do, in discussions with the state and we are awaiting to see what their response is,” the mayor replied.
The mayor said, “we are approaching them to see whether or not there is an opportunity for you to be eligible for these options after the five-year discount. We are in discussions with the Department of Taxation and NJDCA. In addition, to me, the ideal solution would not only be that but also significant amounts of the PILOT money in the future, be used for community wide property tax relief.”
Mayor Bowen said this would also include Lennar. “If we are able to get the state programs reinstated for you and to your benefit but also the entire community, property tax relief with some of the dollars coming out of the PILOT program, you would get your benefits and a tax reduction. That would be the best possible outcome.”
Griffo and several other residents requested a timeline as to when the state might respond. He said, “you are telling me that we are at the mercy of the state which doesn’t make sense.”
“No one on this panel was involved that I know of with the setting up of the PILOT program so we are all inheriting it and this is where we are. That means we have to get permission from the state to be eligible. I think there is widespread support to do whatever we can in the future to reduce property taxes for the entire community which would also include Lennar,” the mayor added.
Committeemen Dominick Cuozzo and Michael Hammerstone also addressed members of the development during a private meeting last month.
During the Committee meeting Cuozzo said the exclusion of senior programs to Lennar residents was “not fair. Every other taxpayer in our town gets them except for the people that live in Lennar and have the PILOT program. That is not what they requested. He gave in writing what they requested which was an actual reduction in the percentage over the long term. Right now, they are at 55% so that would go up to a different rate but not up to 100%.”
Cuozzo added, “that is what was proposed and to try and blame this on the state is disingenuous.” He noted that not all of the financial figures have been released.
Mayor Bowen said he asked the township’s financial department staff member to follow up last week but Cuozzo said the mayor had not. “You told them not to run my numbers. I am being hindered.”
Griffo told the mayor he ran the numbers. “My estimates showed that you would generate funding that was 10% in excess of your needs. I’m sorry sir I’d rather use that money to plan a vacation for my family then you make the decision on where it goes.”
Lisa Wilner of Emerald Road said “I understand you inherited this but didn’t it send up a big red flag when you were building a senior community that didn’t allow senior benefits? Do you really want to see us have signs in all our windows to say beware of PILOT programs? Can’t we sit down with the right people and figure this out?”
She added, “Lennar didn’t do full disclosure and neither did the township and that is New Jersey law. We can’t even sell our places because we have to disclose this and who is going to buy our home in a 55+ community when you don’t get 55 and older benefits or veteran benefits? Can you give us a date on this please?”
“I cannot,” the mayor said.
“Keep passing the buck. You guys aren’t doing your jobs. Figure out what can be done,” she added.
Several residents said that Lennar was currently advertising the development having a five-year tax abatement. “This is clearly a misrepresentation of what the program is. It compounds the fact that members of the community are now ineligible for various benefits that they otherwise might be,” Griffo said.
The Lennar development is close to completion and will be accessible on Province Line (main entrance) or on Jacobstown Road.
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