Will another PILOT fly in Morristown? Special council meeting will decide, July 26

Revised rendering of proposed 'Live-Work' apartments on Morris Street, at Morristown redevelopment meeting, Valentine's Day 2019. Photo by Kevin Coughlin
Revised rendering of proposed 'Live-Work' apartments on Morris Street, at Morristown redevelopment meeting, Valentine's Day 2019. Photo by Kevin Coughlin
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It has gone by different names, and assorted iterations. But one thing about this Morris Street redevelopment project hasn’t changed:

People still are getting riled up over it.

The 85-unit apartment building, successor to a self-storage center shot down amid intense public opposition, was approved in 2019. Now, citing pandemic spikes in construction costs, the redevelopers want more: A tax break known as a PILOT.

That’s short for Payments in Lieu of Taxes.  Such payments eliminate school taxes. That’s the controversial part. Redevelopers save money, and the town actually reaps more cash than it would get from property taxes.

Morristown has granted at least seven PILOTs over the last decade. And the council is likely to support this one, too, at a special virtual meeting on July 26, 2021. 

Stefan Armington was renamed council president at virtual reorganization, Jan. 5, 2021.

Council members conveyed their opposition last year, when a subsidiary of Hampshire Realty offered scant public benefits in exchange for a PILOT, Council President Stefan Armington told Morristown Green this week.

But Armington says a pledge extracted by town officials tips the scales: 14 apartments for people with special needs.

The compromise was suggested by Robert Iannaccone, the lone council member to vote against a PILOT for the M Station office redevelopment last year.

“I believe this proposal represents an appropriate application of a PILOT model,”  Iannaccone said in a recent message to his First Ward constituents.

“I have talked with many parents in our community whose biggest worry is where their special need child will live when they can no longer care for them. This is an opportunity to proactively create the housing they need,” close to transportation, jobs, shopping and neighbors, he said.

Financial sweeteners for the town need ironing out: The new units won’t cost Hampshire much because of state subsidies, according to Iannaccone. The council also wants a clause stipulating an independent audit later, to verify Hampshire’s project costs and impose penalties if claims have been inflated.

Such questions, and the last-minute delivery to council members of the PILOT agreement negotiated by Hampshire and Mayor Tim Dougherty’s administration, prompted the council to table the ordinance introduction at Tuesday’s meeting, and schedule a special hearing for later this month.

‘WHY DO WE NEED TO APPROVE THIS?’

Former zoning board Chairman Cary Lloyd called this week’s virtual meeting to urge the mayor and council to call Hampshire’s bluff and reject the PILOT.

“It would eliminate tax payments to our school district for 25 years while adding apartments that Morris School District students can live in…and it’s Morristown’s residents that are going to be footing the bill for a development like this not paying any school taxes,” Lloyd said, warning it will beget more PILOTs.

The redevelopers previously testified they would not seek this tax break, Lloyd said. Now, “interest rates have fallen, (and) the demand and interest in Morristown is still very strong. Why do we need to approve this?”

“The schools always get their taxes,” Dougherty said, without elaborating.

Calling Hampshire’s bluff is risky, Armington said.

“We can sit on this vacant property for another five or 10 years and hope another developer comes along,” the council president said.

Armington said the town receives roughly $17,000 of $35,000 in annual taxes on the lot, formerly home to an oil company and an auto shop. (Schools and Morris County get the rest.)

The town’s take would jump to $250,000 in year one of the PILOT, which would run for a quarter-century, he said.

Councilman Robert Iannaccone after learning he had won a second term, Election Night 2019. Photo by Kevin Coughlin

Other details, including lost taxes for the schools, are not available. Town Clerk Margot Kaye denied Morristown Green’s request for a copy of the PILOT, calling the draft “deliberative material” not subject to the state Open Public Records Act.

Initially, the redeveloper agreed to provide for 13 affordable units, half of which could be built off-site.

The PILOT calls for construction of four three-bedroom family units onsite, along with 14 apartments for special needs adults, according to Tuesday’s tabled ordinance.

Ten of those special apartments will have two bedrooms. Each bedroom counts as one unit towards the town’s court-mandated affordable housing obligation. Morristown may get credit for 28 affordable units, Iannaccone calculates.

THEY CAME OUT IN DROVES

The council designated the property as needing redevelopment in 2012.

A few years later, droves of residents packed meetings to crush plans for a five-story storage facility.

The redevelopers responded in 2018 with the “The LW,” pitched as  “Live/Work” apartments with movable walls, a communal conference room and coffee shop for work-from-home professionals.

An updated redevelopment plan was approved in April 2019, recognizing Hampshire Realty subsidiary Morris Street 2015 Urban Renewal LLC as the redeveloper.

FRANK DISCUSSION: Attorney Frank Vitolo, left, and architect Frank Minervini present concept for LW Apartments, Dec. 13, 2018. Photo by Kevin Coughlin
FRANK DISCUSSION: Attorney Frank Vitolo, left, and architect Frank Minervini present concept for LW Apartments, Dec. 13, 2018. Photo by Kevin Coughlin

By the time a redevelopment agreement between the town and Hampshire was struck that summer, the project had been re-christened as “The Revolution,” according to project attorney Frank Vitolo.

In a departure from customary practice, the council approved a developers agreement before a planning board review.

The board gave its blessing in January 2020, granting site plan approval for 85 apartments, 115 parking spaces and 610 square feet of retail. A satellite shop of South Street’s SmartWorld Coffee was contemplated.

In June 2020, the council authorized hiring, at the redevelopers’ expense, Nassau Capital Advisors LLC, to scrutinize PILOT requests by Hampshire and M Station, also a Vitolo client.

IN OTHER COUNCIL BUSINESS

This week was closing time for on-street dining along South Street and Speedwell Avenue, town Administrator Jillian Barrick said.

Pandemic permission enabling restaurants to place tables in curbside parking spaces was ended by the state Department of Transportation, Barrick said. South and Speedwell are state thoroughfares.

The council unanimously approved the Morristown Partnership’s $1.2 million Special Improvement District budget.

Armington also created a subcommittee to nudge redevelopers to subsidize public art. A 2013 ordinance requires them to contribute up to $100,000 for murals and other public installations.

Murals for train trestles never got painted because nobody could reach consensus, Mayor Dougherty said.

“We’re working hard on this, and what I found through the art world is, art means a lot of different things to a lot of different people,” he said. “It’s subjective.”

Council members Sandi Mayer and Tawanna Cotten will serve on the subcommittee.

Cotten also asked the administration to explore an ordinance banning smoking in town parks.

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5 COMMENTS

  1. Margaret misses the point that 99.9% of property owners within the Morris School District do not want to foot the bill for someone else’s kid to attend the schools free of charge. I’m all for compromise for projects like M Station, the hospital or other commercial developments that don’t add additional headcount to the school system.

  2. JT misses the point of the comprise, which provides needed housing for those with special needs, near the resources they need.

  3. The PILOT program should not be available to residential units, otherwise, the residents of Morristown, M. Township and Morris Plains will be picking up the cost of education for any children living in this complex. There are plenty of childless households in the 3 towns that would like to eliminate their school taxes as well, but it’s unlikely to happen.

  4. Good article. Why cant some of the PILOT money just get sent to the school system? They are getting 250k the first year in the requested PILOT – the town can write a check to the schools for 10% of that, and everyone is better off.

  5. This informative article highlights much important information for every Morristown resident and taxpayer to consider.

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