I was at the West Windsor Council/Planning Board meeting on 4 June to review the plans presented by Hillier. I am very concerned. ##M:[more]##First, in spite of the recent election results, and the mayor’s call for a “modified” “consensus” plan, Hillier’s plan is still basically the same as the one presented in the third workshop, and the firm clearly favors the 1,”000 housing units. The “reduced scale” plans simply reduce that plan to three-quarters, half, or quarter size.
I have a number of specific concerns with the Financial analysis presented by ERA.
1) The analysis depends upon a Payment-in-lieu-of-taxes (PILOT) agreement. Hamilton showed some of the problems with PILOTs. Dr. Katz also expressed several concerns with this. ERA said that school funding (at current per-student rates) would be allowed for. Fine. But a PILOT means an agreement, for fifteen to thirty years, on a fixed payment schedule in place of tax rates determined every year. If school or municipal costs are higher than projected, the PILOT payments will not increase as fast as taxes in the rest of the township, placing an unfair burden on the rest of the town and effectively subsidizing the residents and businesses in the redevelopment area.
2) On page 9 of the ERA analysis (Click Here.) it says: “Approximately 55 percent of the municipal budget is funded by local taxes.” The analysis assumes that this percentage will stay constant. The other 45% came (in 2007) from Municipal fees (14.9%), use of existing surplus (12.8%), State aid (9.6%), Interest income (4%) Back taxes (1%) and State/federal grants (0.4%). None of these are likely to expand in proportion to the tax base with redevelopment, most won’t expand at all. And “Surplus” and “Back taxes” still derive from property taxes. Thus the ERA analysis underestimates the tax impact of services to new development by more than 40%, or roughly $10 million per year.
3) ERA projects two sources of value to the township: 1) excess of tax payments over incremental costs, and 2) “Residual Development Value” or “Amenity value”. This is, in effect, the developer’s potential profits (those more than 15%) which the developer may share with the township, either through a cash payment, or more likely, by building infrastructure for the township. But there is no guarantee that a developer will agree to devote ALL of the “residual value” to the township. Probably only a portion of this will be available, and we don’t know how much. Based ONLY on the actual tax collections, ALL of the scenarios are TAX NEGATIVE as compared to the “of right” scenario, that is development based on the existing zoning. Only if all or most of the “residual” value is captured is even the 1000 unit plan value-positive.
Hillier dismisses a zero-housing option as requiring no development at all, because of affordable housing. He overlooks the option of providing such housing elsewhere in the township.
I hope the new Council will scrutinize redevelopment plans very carefully indeed.
David E. Siegel
17 Berrien Ave.
