The Township Council has approved a memorandum of understanding that would require Princeton University to contribute a minimum of $50,000 a year, plus the adjusted cost of inflation, in lieu of taxes for its farmland-assessed “Sarnoff frontage” property.
The PILOT (payment in lieu of taxes) agreement, approved during the council’s October 26 meeting, stems from a verbal agreement made in 2002, when the university purchased the 81-acre property fronting Route 1 from the Sarnoff Corporation. Until 2008, when the property was downgraded to farmland assessment, the university paid taxes on the parcel.
Kristin Appelget, the university’s director of community and regional affairs, said during the meeting that even though there has not been an approved formal agreement with the township, the university made a voluntary contribution of $50,000 to the township in good faith that an agreement would be reached in 2009.
Township Attorney Michael Herbert told the council that prior to 2008, the university had been paying taxes on the property at a much higher rate than the $50,000 approved in the agreement. Now because it is assessed as farmland, the township can not legally receive as much money for the property, unless it is through voluntary contributions.
The agreement, which states that the university is providing the voluntary contributions as part of its “commitment to provide some assistance to host municipalities as a responsible citizen,” establishes that the university will begin making the annual payments in 2009. In addition to the $50,000 annual payments, “in recognition of inflationary factors, the university will increase this voluntary payment annually by the established cost-of-living index.”
Prior to voting on the agreement, Councilwoman Linda Geevers asked whether the township would still be guaranteed the $50,000 even if inflation factors for some reason drove the value down. Herbert said the township would be guaranteed at least $50,000.
Council members also asked how the township could ensure it would still receive the voluntary contribution if the university should sell the property. Appelget said if that were the case, the township would have to work out a new agreement with the new owner, and that the university would no longer be responsible for making the contributions. However, she added, “the university is not selling this property.”
