AvalonBay Tax Program Rejected By Council
Bloomingdale Council majority members said they did not believe PILOT program would benefit borough's taxpayers.
The Bloomingdale Council voted against adopting an ordinance to move forward with a Payment in Lieu of Taxes (PILOT) program with luxury apartment developer AvalonBay on Tuesday night.
The PILOT program would have granted the borough payments over the next 30 years in lieu of the developer, currently building an apartment complex on Union Avenue, paying taxes. The municipality would have recouped the bulk of the benefit from the payments, bringing in 95 percent of the money, while the county would have received 5 percent. Aside from money from a land tax credit, the school district would not have received money from the developer for the length of the PILOT program.
Council members discussed the program over the course of at least three meetings, including one special meeting that lasted more than five hours. The ordinance was originally expected to be voted on that night, but two council members were absent.
Councilman Ray Yazdi, who helped develop the negotiated PILOT program between AvalonBay and the borough, along with Mayor Jonathan Dunleavy and Borough Attorney Fred Semrau, delivered PowerPoint presentations on the expected revenue from the program. On Tuesday, Semrau said the negotiated amount, which would have granted the borough a minimum of $550,000 per year, expected to grow by at least 2 percent per year, was a good deal and more money than he has seen other municipalities receive through a PILOT program.
Earlier in the meeting, Dunleavy made a presentation in response to comments made in an editorial published in last week's Suburban Trends by former Councilwoman Linda Huntley. In it, she blames "the mayor and his cohorts" for bonding frivolously for projects in the borough and using the AvalonBay PILOT program as a way to pay off debt. Dunleavy and Yazdi have said all of the money brought in through the PILOT program would be used to pay down the borough's nearly $12 million debt and stabilize taxes.
Dunleavy displayed Huntley's voting history over six years on the council and said just as he and other Democrats have voted for projects that required bonding, so have the Republicans. In fact, more, he said, as debt increased more under Republican control.
"Everyone bonded, that's how you run a borough," Dunleavy said, explaining that there is often not enough cash on hand to complete necessary projects.
These projects have included purchase of a new firetruck, new firehouse, constructing a new Department of Public Works building when the existing structure was deteriorating, road repairs and more. But in order to move forward with a vision plan for the borough, Dunleavy said private money is needed, like the money that would have come from AvalonBay.
"We're a small town, it should be about what's best for Bloomingdale," Dunleavy said.
But some residents, including former Councilwoman Jennifer Altfield, were concerned about giving less money to Passaic County than the county would have received through standard taxation. Semrau said residents should not worry about how much the county would be losing through the program.
"I really wouldn’t worry about the county in this context," he said. "The county budget is $400 million. Bloomingdale’s budget is $10 million. The $100,000 [the county would receive through standard taxation] over their $400 million budget, they won't miss it as much as it’s a benefit to the borough."
Other residents, and Councilman Mark Conklin, were still concerned about the school district not receiving money. Conklin said he felt AvalonBay should be subject to standard taxation like others in the borough and not receive a benefit and that he disagreed with the figures presented.
"I don’t believe most of these numbers," he said. "We’re giving them something we don’t need to give them."
Resident Dawn Hudson said she did not care what benefit AvalonBay received as long as there is a benefit to Bloomingdale included.
"If this program is going to stabilize my taxes and pay off the debt in Bloomingdale, I'm all for it," she said. "I don’t care what AvalonBay is getting."
Another resident described the program as a "golden opportunity."
"You have it before you. You can go down in history being known as the council that did something for the benefit of this town and the taxpayers," he said.
Bloomingdale Planning Board Member Bill Graf spoke to council members before they voted and reminded them of the process the ordinance has gone through before the expected vote Tuesday night. Graf said there were months of planning for the redevelopment zone, which needed to be established before the PILOT program could move forward, by the planning board and hired professional planners. He said the planning board believed the work they were putting in to consideration of the redevelopment zone was going to lead to Bloomingdale's first PILOT program.
"You wouldn't have sent it to us in the first place if you weren't going for a PILOT program," he said.
Dunleavy has said that he thought AvalonBay could be the catalyst for more development in the borough and Yazdi said the borough has already received interest of development in Bloomingdale from other companies. The council later agreed to have Borough Administrator Ted Ehrenburg publicize Requests for Proposals for redevelopment plans on Union Avenue and Main Street.
Councilman Glenn Schiffman, who spoke as a resident and not as a council member, as he is recused from voting on the issue, questioned the legality of making that section of Union Avenue a redevelopment area while considering a PILOT program with AvalonBay. But Semrau said the borough went through the process properly.
"Everything was done in an appropriate manner," he said.
But Councilwoman Linda Shortman disagreed and one of the reasons she gave for rejecting the ordinance was that she did not feel that the area of Union Avenue designated for redevelopment was "blighted," as is commonly the case with developments offered PILOT programs. Shortman said she did extensive research and was not confident the program would ultimately benefit the borough.
"This development, in my opinion, does not meet the needs of our taxpayers," she said.
When the vote was taken, even Yazdi voted against the ordinance moving forward with the PILOT program. But he said he did so only so that conversation could continue on the topic at a later date. Councilman John D'Amato was the only member who voted in favor of the ordinance.
What do you think? Should the borough have moved forward with the AvalonBay PILOT program? Participate in our poll below and then let us know your thoughts in the comments.