• Lee Roth

The Concept Of PILOT Programs


PILOT agreement in the center of Flemington

In 2017 I began to look at the concept of pilot programs after learning that the Flemington government was proposing to enter into a PILOT agreement in relation to the redevelopment of the center historic district of Flemington.

My reading led me to discussions of the history of the concept. It seems that the original use of such programs, and the passage of laws providing for them, were to deal with situations where organizations exempt from paying local taxes, such as the state or federal government, might have substantial property interests in a particular municipality.

In those circumstances the municipality would be providing the same services to those government owned properties as they were to privately owned properties. That is they would be providing police services, access through road construction and maintenance, snow removal, and other publicly available services provided and paid for by local taxpayers.

In some municipalities the portion of government owned to privately owned properties was found to be substantial. It seemed only fair and reasonable that the superior government agencies contribute some of the costs that were required by the properties owned by those government agencies. Thus negotiations took place between municipalities and superior governmental units. Those negotiations often resulted in agreements to make payments in lieu of taxes, that is PILOTs, where taxes could not be forced upon or collected from the superior governmental entity without the agreement of those property owners.

Properties Paying No Taxes

My search led me to look at the property located in the Borough of Flemington. I did a search of the publicly available tax assessment records and found that there were 13 separate properties listed in the name of the "County of Hunterdon". Those properties were paying no taxes. They had an assessed value in the municipal assessment records of $23,624,700. With a tax rate of .0314 Flemington would have expected to have collected taxes, if the property was privately owned that year, in the amount of $741,815.58.

Perhaps the Mayor and governing body of Flemington should arrange for a similar payment of at least half of what the taxes would be if the property were privately owned. Doing so would be fulfilling the basic and historic concept behind the idea of a PILOT.

One of the properties, among the 13, is the county parking lot at 111 Main St. It has an assessed value of $367,700. Perhaps Flemington could start by negotiating with the county to arrange to have that parking lot conveyed to the municipality to assure its use and availability for public parking into the future. With anticipated increased development of one kind or another in the Main Street area, that parking would be not only useful but essential.

Get the County to Pay a Fair Share

Go for it Mayor. Getting the County to pay a fair share of municipal costs would be a feather in your cap. It would also be a great benefit for the tax payers of Flemington. It is a way to lower taxes for business and home owners.

#government #BusinessGrowth #EconomicDevelopment #Taxes #CommercialRealEstate #Flemington

Copyright 2020 - Lee B. Roth  | 91 Main Street, Flemington, NJ 08822 

908.782.5317 | lbr@lawroth.com 

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