Cranford taxes to climb $34 for average home; Birchwood PILOT introduced

CRANFORD, NJ — The township committee adopted a $38 million municipal budget at its April 10 meeting and also introduced a financial agreement with the the Birchwood Avenue apartment complex developers that will generate $588,173 in its first year.

The introduction of the ordinance specifying a payment in lieu of taxes, or PILOT, agreement, to be paid by Birchwood Developers Associates, passed 4-1 with Commissioner Patrick Giblin casting the only vote against it.

“I did not vote on the PILOT for Birchwood,” Giblin said. “But I do want to acknowledge it. “This township committee has come up with a process to dedicate tax proceeds to the board of education.”

“We do expect to come up with something at the next meeting,” Giblin continued. “I have been in close communication with the superintendent and the business administrator of the schools.”

Giblin’s comment was the first mention of earmarking a portion of the PILOT for the school district, which would not typically be involved in negotiating or receiving such payments.

O’Connor expressed agreement with Giblin on the designation, aimed at mitigating the impact on the school budget by the planned Birchwood apartments.

When asked what percentage of the taxes would go toward the school district, township Administrator Terence Wall said that discussion is still pending.

Superintendent of Schools Scott Rubin and BOE President Kurt Petschow did not respond to LocalSource queries regarding the PILOT prior to press time this week.

The complex is slated for 69 one-bedroom units, 149 two-bedroom units and seven units with three bedrooms.
Fifteen percent of 225 apartments, or 34 units, are to be designated as “affordable” under the New Jersey Supreme Court’s Mount Laurel mandate, with proposed monthly rents estimated at $941. The one-bedroom market rate units are slated to have estimated monthly rents of $2,200.

Lisa Ryan, of the Office of Communications for the state Department of Community Affairs, said there are eligibility requirements to qualify for subsidized housing beyond income.

“Generally, approval to lease an affordable unit is based on review of the applicant’s final application and supporting documentation, minimum and maximum income restrictions, credit criteria, criminal history check and the applicant’s financial ability to rent the apartment,” Ryan said.
The 30-year agreement between the Birchwood developers and the municipality will generate $588,173 for the borough in the first year, or 11 percent of the estimated gross revenue, according to a copy of the agreement obtained by LocalSource.

The 11 percent of gross revenue will remain in effect for the first 15 years of the agreement and then switch to a percentage of the assessed value during the final 15 years, starting at 20 percent and climbing to 80 percent in the final years of the pact.

The agreement also states that the apartment complex will create approximately 246 full-time equivalent construction jobs for the duration of the construction period, and create approximately 12 full-time permanent jobs in connection with its operation.

Without the PILOT agreement, the developers said they would not be able to finance and build the the complex, and offer the affordable housing units.

Developer Tony DiGiovanni told LocalSource that, following additional approvals, the project will begin construction Sept. 1, and take two years to complete.

With regards to the current year’s budget, it passed unanimously, including a tax levy of $23 million, an increase of 1.39 percent or $312, 976 from last year’s $22.7 million. This includes an increase of $34 for the average home assessed at $182,057, according to finance officer Lavona Patterson.

Thanking Patterson for her work at the meeting, Township Commissioner Mary O’Connor said, “the budget is a huge process every year,” adding that it “has a good outcome for our taxpayers.”