Opposition For PILOT Projects Grows Stronger In Parsippany

PARSIPPANY, NJ — Opposition continues to grow among Parsippany residents and one councilman to the practice of enticing developers with PILOT programs, which can free developers from paying ordinary property taxes.

Last week, an information session discussing the recently approved PILOT projects at 2 and 3 Campus Drive and 249 Pomeroy Road was organized by Councilman Justin Musella.

In town, four council members, Michael dePierro, Loretta Gragnani, Frank Neglia, and Paul Carifi, support the mayor's stance on the planned PILOT programs. Musella, the sole council member to vote no, has spent the last several meetings voicing concern over the use of PILOTs in the township.

Musella has continued to defy his Republican colleagues and the mayor on the issue. He invited residents to attend the town hall meeting last week, which was attended by several township residents.

On a Facebook live broadcast with more people streaming the meeting, Musella, Parsippany Board of Education elect Andy Choffo, and Ken Kaplan of KenKap Realty detailed the complicated process of negotiating the tax arrangements and why he opposed them.

When explaining the financial details of one of the authorized projects, Musella stated that without a PILOT, that development would have paid more than $110 million in taxes over the course of the 30-year deal.

"These developers receive the most generous possible terms imaginable. Thirty years and a land tax credit—what does a land tax credit mean? That means, on the land that they own, separate from the improvements of the land, you are rebating them for the taxes that they pay to the municipality," Musella said.

The PILOT reduces the tax bill to around $53 million.

"Now, who makes up that difference is the question everybody is asking… Well, you have an early Christmas gift; you get to make up this difference, not only for this building but for the other five buildings that are also receiving PILOTs," Musella said.

Read More: Parsippany Approves PILOT Projects Despite Public Backlash

PILOT agreements, also known as municipal tax abatements, are deals that enable a developer to switch their standard tax payments for a property to a fixed, yearly payment to the municipality.

Some municipal officials, like Barberio, have referred to them as essential tools for encouraging development in underdeveloped or neglected areas of town.

Opponents, however, have criticized their use, warning that the deals could allow large developers to avoid paying their full share of property taxes.

According to the mayor's views, the prolonged blight of unoccupied or demolished office buildings will greatly increase the tax burden for residents if PILOTs are not used.

Former Parsippany Township Attorney John Inglesino, who now represents housing developers, stated that a negotiated PILOT deal benefits everyone and that such agreements are widespread in the current real estate market.

One major point that Inglesino repeatedly brought up to the council was the statement that the three PILOT projects would not affect the school district.

"The school gets every dime. If the school board approves a budget, they are guaranteed every nickel that's been approved in their budget, whether there is a PILOT, whether there's not a PILOT...The school gets paid," Inglesino said.

Read More: PILOT Project's Financial Impact On Parsippany Schools Discussed

The school board, on the other hand, has repeatedly stated that they believe that the newly proposed PILOTs will underfund the school system even as new developments undoubtedly add additional kids and costs.

During last week's town hall, Musella agreed with the school board, noting that previous statements about the new developments not bringing school-aged children to the township were simply untrue.

"Don't kid yourselves; school-aged children will come from this building. How do we know that? The nearest comparable Avalon Bay is in Boonton, and that is a 350-unit building, and there's about 40 school-aged children coming from that one. This one that was approved is 430 units, so there are going to be school-aged children coming from this building," Musella said.

Three more PILOT agreements are scheduled for public discussion and a final vote at tonight's council meeting.

Musella has invited the audience to contact Parsippany's mayor and other council members, urging them to postpone the decision on Tuesday until additional information is available.

According to the published meeting agenda, the public comment period for the Tuesday night meeting has been moved to later in the agenda after the council votes on the second reading of the ordinances for the proposed PILOT projects.

The public comment period has traditionally come before the individual resolution section of the meeting.

The move to push back public comments could have to do with the pushback from residents and school board officials who protested the proposed PILOT programs to the council at the meeting two weeks ago.