One of the issues in the upcoming Municipal election is PILOT’s. What is a PILOT? A PILOT is an agreement between a developer and the City whereby the developer is given a tax incentive to build a project. It stands for Payment in Lieu of Taxes. The project can be residential, commercial, or industrial. Examples of each would be the Bayonne Energy Center II, Barnabas Hospital, and 19 East 19th. The first two have been completed and the last is well underway. All told, in the last 45 months there have been 26 long term PILOT agreements. Each and everyone of these projects, when completed, will pay property taxes. Taxes on the land as well as the PILOT. The PILOT is a tool authorized by the State of New Jersey for a Municipality to attract development. Both Hoboken and Jersey City made extensive use of PILOTs to achieve their developments.
For years and years Bayonne has lagged behind most of the County in developing. The reason – reluctance to use the development tool called PILOT. As a result lots stayed vacant, rundown buildings remained standing, and Bayonne stagnated. The school system suffered from a lack of revenue growth and the City’s budget hole grew. Since PILOTs are often misunderstood by the public, it was a brave and bold move for Mayor Davis and the City Council to travel the path of using PILOTs to spur development. But they did and it has worked. Everywhere you look you see new developments happening. New hotels are being proposed. Residential towers are being planned and being built. New commercial development has opened on Route 440. Bayonne has become a boom town. When these projects are complete the combination of property taxes and PILOT revenues will have increased during the life of the PILOTs from $51,000,000 to $510,000,000. That’s $460,000,000 of new revenue coming to the city. Even the Board of Education benefits by receiving 5% of the funds collected on many of the PILOT agreements. That’s new money for our school system on top of the property taxes currently being received. The kicker – most of these projects produce few if any new children for the school system.
Without a PILOT agreement, most if not all of the projects would not happen. Without a PILOT agreement most banks will not finance a large project, or financing becomes more expensive and kills the project. The best part of a PILOT on residential projects, the more successful the project is the more money the City receives. The City becomes a partner in the project’s success.
To summarize, PILOTs mean fewer vacant properties and fewer dilapidated properties. PILOTs mean more money (a lot more!) to the City and the schools. PILOTS mean construction jobs for our citizens. PILOTs mean new residents moving to Bayonne, eating and shopping in our local establishments – again creating more jobs for our residents. PILOTs mean we are a City that is attracting attention throughout the region. PILOTs mean the a budget hole is on a path to being closed. PILOTs mean that we will have ferry service in Bayonne. (No development equals no ferry.)
To Mayor Davis and his City Council, thank you for taking the heat and moving our City forward. Thank you for your courage and foresight. Don’t let the naysayers hold you back. Continue developing our City so that we are once again the gem of Hudson County. Shoot, make that the gem of the State of New Jersey.
To those opposed to PILOTs what is your plan? The past plan of doing nothing produced nothing. Development does not happen by itself. We must use the tools available to us if we are going to compete in the modern world of development.
To the candidates running against the Davis team, what is your position on PILOTs. Please don’t say shorter PILOTs, PILOTs that make more sense, or PILOTs only when appropriate. You know that PILOTs are the key to development. Don’t mislead people. If your position is that there should be no PILOTs then say so; but also be honest and tell voters that no PILOTs mean no development.
PILOTs are not a giveaway to greedy developers. PILOTs are the key to Bayonne’s future. Bayonne deserves quality hotels. Bayonne deserve new gleaming residential buildings. Bayonne deserve construction jobs. Bayonne deserves hundreds of millions in new revenues. Bayonne deserve a revitalized Broadway. Bayonne deserves new shopping and dining opportunities. Bayonne deserves a new ferry service. Most of all, Bayonne deserves a future.
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