In a brief but consequential meeting Tuesday, Morristown’s council approved tax agreements for two major apartment projects and adopted a $59.3 million municipal budget that will raise the average homeowner’s tax bill by about $10 a month.
Those votes were 7-0, though Councilman Robert Iannaccone objected to a key provision of the PILOT deals—Payments in Lieu of Taxes—for the 89-unit Lackawanna Place and 150-unit M Lofts developments.
While backing the PILOTs themselves, he opposed resolutions requiring developers to contribute $1.8 million over 20 years to the nonprofit Morris Educational Foundation (MEF), which awards scholarships and supports school programs.
Iannaccone said those funds should go directly to the Morris School District, warning that nonprofit donations create oversight risks. He cited the ongoing lack of financial records from a housing authority nonprofit involved in a 2023 embezzlement case.
Other council members defended the MEF’s record since its 1994 founding, and town officials have suggested the school board’s $150 million budget should cover operational needs.
Morristown has approved a dozen PILOTs, by Iannaccone’s count. They are controversial because they eliminate school taxes to incentivize builders.
Town Attorney David Minchello said the 20-year MEF pledge avoids political interference that might come with giving the school district a share of PILOT revenue. The school district still will receive taxes on the land under both developments, a novel twist proposed by the administration.
Third Ward Councilman Steve Pylypchuk, who has two children in the district, called the compromise “a step in the right direction.” The PILOTs, he said, will yield new municipal revenue—including $6.5 million over 12 years from a train station parking lot that yields no taxes now—and help fund traffic and infrastructure improvements. The projects also include 43 affordable units toward the town’s state-mandated housing quota.
“This makes growth happen on our terms, not by court order,” said Pylypchuk, who is running for Assembly.
SHORTER TERMS, ADDED BENEFITS
Bijou Properties will build One Lackawanna Place, a $45 million mixed-use project with 13 affordable units, at the train station. SJP Properties and Scotto Properties, developers of the adjacent M Station offices, will construct M Lofts, a $78.3 million project with 30 affordable units, on Spring Street. Most PILOTs run 30 years; these span 12 and 20 years, respectively. MEF donations will reduce the developers’ PILOT payments to the town.
The M Lofts partners also agreed to donate a small apartment house to Habitat for Humanity, open Whippany River access, and transfer to the town a wooded lot with ruins of an historic Black school.
Financial impacts on the town and school district remain unclear, as figures comparing revenue with and without PILOTs have not been released.
An MEF representative, Independent mayoral candidate Andrea Lekberg, and three Republican council hopefuls attended but did not speak. Earlier, Lekberg criticized the town on Morristown Green for “double-taxing” residents through PILOTs and a proposed open space levy.
School board member Cary Lloyd, also posting here, estimated the new housing will add more than 30 students, costing the district $12 million. But Councilman David Silva criticized the district’s performance for minority students and praised MEF’s fiscal oversight and programming. “It’s going to a good place,” he said of the developer donations.
Iannaccone said he’s supported only one previous PILOT—Max on Morris, which reserved 14 units for special-needs residents. He urged future developers to disclose PILOT intentions earlier in the approval process.
$59.3M BUDGET APPROVED
The budget drew little discussion. Town Administrator Jillian Barrick previously told the council the 1.9% property tax increase would cost the average homeowner an additional $119 this year.
“It’s a good, solid budget,” said Iannaccone, praising the administration for rebuilding reserves depleted during COVID-19. He cautioned that rising labor costs make future tax hikes likely.
“We’re getting it done,” said Mayor Tim Dougherty, who seeks a fifth term. While acknowledging recent tax increases, he said the pandemic drained municipal resources but not services.
“COVID came, and it was a rainy day for three years,” he said, noting no layoffs or benefit cuts. “We functioned as a government for three years because we were fiscally responsible for all the years leading up to that pandemic.”
OTHER BUSINESS
The council authorized town attorneys to negotiate a redevelopment agreement for 25 Market St., previously approved for a boutique hotel that stalled during the pandemic. The latest plan proposes 64 apartments.
Members also approved spending $550,000 from the sewer capital fund for upgrades, and authorized a $3 million bond sale to finance town-wide capital improvements.
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I think Chris has learned how to use A.I.? Maybe he will run for Mayor. He is very smart but seems very frustrated all the time that’s saddening and nonsensical often
The Self Insurance for health care approach the Town chose may leave many vulnerabilities: limits on health care, increases- not decreases in premium , and a general compromise on impersonal protections, and Hippa concerns. There’s no separation regardless of 3rd party admin.
No savings , more costs, less quality care, more red tape, more restrictions, no privacy. Not ideal. Why do municipalities choose this? Especially post covid?
Financial Risk: Self-insurance means the municipality is responsible for all claims and losses, which can be significant in the event of a major incident or a series of costly claims.
Administrative Burden: Managing a self-insurance program can be administratively complex and require dedicated staff or third-party administrators, which can add to the overall costs.
Fluctuating Costs: Unlike fixed insurance premiums, the costs of a self-insurance program can vary greatly from year to year, making budgeting and financial planning more challenging.
Actuarial Expertise: Setting up and maintaining a self-insurance program requires actuarial expertise to determine adequate funding levels and manage risk effectively.
Need for Claims Management Expertise: Municipalities must either develop in-house claims management capabilities or outsource this function, which adds to the administrative burden and expense.