City Council Special Presentation May 2, 2026

[music]
>> So, I want to say good morning,
everyone. Good morning.
Thank you for taking the time out, you
know, to come here and to get some great
information, some education,
um to get some information that you just
didn't know, you know, um matters here
in the city of Pleasant Grove.
Um I want to thank, you know, Tim,
Renee, and the crew, Mr. Archie. Who
else is there with the crew?
>> [laughter]
>> You know, um
just being engaged in this um in the
process of the PILOT program
for those who took the time out to go to
the League of Municipalities
to hear, you know, Mr. Keith and his
presentation, and to hear and to see,
you know, the benefits, you know, for
the our our our city of Pleasant Grove.
So, Keith,
how do you say your last name? Balla.
Balla. So, Keith Balla,
um
I want to thank you. I appreciate you,
you know, for coming here to our city so
we could get a a clear understanding of
what PILOT means for the city of
Pleasant Grove.
Good morning, everyone. I'm Chief Balla.
Good morning. First, I want to
apologize. I know I would have brought
donuts and coffee.
>> [laughter]
>> The sign says no food or drink.
>> [laughter]
>> But welcome everybody. I'm glad you
could come out to learn a a bit about
PILOT agreements.
So, to start out, I'm a partner in an
accounting firm and consultant firm
called PKF O'Connor Davies.
Uh
Scott, we're partners.
Uh
he does the audit work.
The area that I practice in is the
forensic litigation and valuation group.
So, I do investigative accounting,
forensic fraud investigations
in the government sector, as well as in
private industry.
So, I've been doing that work since
1988.
I had my first investigative municipal
investigation in the city of Newark.
And
that kept going on and on and on over
the years. I always have projects, you
know, to look at different things.
So, the forensic part, we dig deep into
the into the numbers of what actually
goes on with an activity. So, it could
be a pilot agreement where we've
actually investigated pilot agreements
in the city of Jersey City. We've done
that in the city of Newark, as well. Uh
with various agreements. So,
this today is to really give you some
education about what the pilot
agreements are and what they can do.
Okay.
So, I put this little PowerPoint
together.
Uh
this is myself uh just for my credential
and I'm a certified public accountant.
I'm a public school accountant in the
state of New Jersey. I'm certified in
financial forensics, which is separate
designation.
Uh credited in business valuation. So, I
value businesses.
Uh
and I've worked with a lot of different
businesses through my through my career.
So, I've worked with construction
companies, developers,
uh doctors, any almost any kind of
business, uh military contractors.
Uh
I've managed the accounting practice.
That's what a
management accountant does. I'm a member
of the State Board of Accountancy. So,
I'm the past president. I just stepped
down as president of the Board of of on
uh
April 1st. We have a new president. I'm
still a member of that board. Anything I
say today has nothing to do with the
Board of Accountancy.
Uh that's the regulatory board that
licenses certified public accountants in
the state of New Jersey.
So, that board, I was appointed years
ago by Governor McGreevey.
Uh
and you're supposed to be on there for a
2-year appointment, and I've been on
there for 25 years.
So, I as a as a holdover, basically. So,
I as a board member there, I have the
most experience on that board. Some
other members have transitioned in and
out of the board, but I've remained on
that board uh through various governors.
Uh so, I'm there at the pleasure of the
governor. The governor can kick me off
anytime, or put me back on. So, just as
an aside, Chris Christie, when he was
governor, did kick me off.
Uh
but then I did a lot of the work, so
then somebody on the board asked if we
could put me back on.
So.
But uh
I've testified in court as an expert on
uh accounting matters, damages,
and the former mayor of the Borough of
Watchung, New Jersey,
up in Somerset County. So, I served for
4 years as the mayor,
uh dealt with all the challenges you
deal with, you know, from the
administrative end there, but I was able
to apply
what I do in my profession as the mayor,
because we wound up having our big pilot
agreement in Watchung while I was mayor.
So, I negotiated that agreement with the
developer.
And I've appeared on TV a couple times
on Dateline NBC. I investigated a
televangelist for Dateline NBC,
uh News 12, and JAYN, and CN.
So, the first part of a tax tax uh
the the pilot agreement, it's a payment
in lieu of tax.
So, it's an agreement between a
municipality and and a developer. Uh
that's what that is. It's a making of
payments instead of paying the ad
valorem tax on the assessed value of the
property like every other property,
you know, the tax assessor assesses your
home or your business property, says
this is what it's worth, and you pay the
appropriate tax rate based on how the
budget kicks out, and they pass that
down. Well, on your pilot, they're not
They're not going to pay that ad valorem
tax. They're going to pay under an
agreement. The agreement's a negotiated
agreement. So, the municipality has the
ability to negotiate whatever they can
get the developer to agree to.
So, but before you get to that,
I'll go through a little bit of the
history. So,
tax abatement started in 1961.
Uh in the '50s, a lot of manufacturing
left the city of Newark, primarily
Newark and Camden. Uh
and areas became blighted. So, they
passed the Fox Lance Act, which was to
incentivize developers.
The developers in that Fox Lance have an
advantage, and it's a decisive advantage
to most municipalities.
So, then in 1991, they developed the
long-term tax exemption act,
which came in after that, various
amendments, and it was to create equity
between the municipality and the
developer through that act.
So, the developer
enters into an agreement, uh and they'll
pay a per-
Typ- Typically, they pay a percentage of
their gross revenue is what the what the
agreement is.
Uh but it's really to to
incentivize the developer. If you can't
make money in a particular area, let me
give you a good example. If you have all
affordable housing, the the owner of the
property is going to get less rent than
they would at market rate. So, they
can't make this payment profitable. So,
to incentivize them, you give them a
pilot agreement. So, it makes it uh
easier in terms of managing the dollars
uh since they can't get the market rate
rent, they'll pay less than on on the uh
property tax. So, they're going to pay
under their pilot agreement, a
percentage of their gross revenue to
temporarily.
But, it's really to
uh
help the community what whatever the
community's needs are. So, it's in
accordance with the town's master plan.
You want to have it in conjunction with
the master plan to achieve the
objectives you want to achieve.
Uh but, it it's the outgrowth of where
you had substandard, unsafe, unsanitary,
dilapidated
uh properties and not conducive for
living or working. So, that's basically
what an area in need of redevelopment is
that one category number eight.
You know,
substandard, unsafe, unsanitary,
dilapidated, not conducive to live or
work. So, that's
area in need of redevelopment. I can
give you a quick example of what I
didn't think was an area in my own town.
So, prior to being mayor, they
designated 44 acres of bucolic woodlands
as an area in need of redevelopment.
So, it was nice to have a park there or
something, but they said, "No, no, it's
an area in need of redevelopment. And
so, we're going to incentivize a
developer to build." Well,
any developer would have built on the 44
acres. It's a nice area to build. So, I
didn't think it met that definition, but
once the planning board designates it
and says that, it goes to municipality,
they designate it, it's pretty much done
whether it was or wasn't
in your opinion, you know, uh qualified
or not.
So, this is a picture of Jersey City. Uh
factory between towers is still there,
but it was along the waterfront. It was
a pretty blighted area. Uh
and an area that was definitely needed
redevelopment.
This also is along the waterfront. When
I looked at this picture the first time,
it looked like it was like somewhere in
China or something.
You know, with this with this uh thing
on the wharf, but you can see the twin
towers in the background.
Uh this property here was in Newark. It
was a varnish factory
uh where they made varnish.
Uh this was called
It's the Ironbound section of Newark.
Uh,
right along the rail line and the PATH
train.
Uh,
this is the Jersey City skyline today.
So,
through use of pilot agreements to
incentivize developers, and one
developer in particular was Lefrak
organization that did a lot of
development in Jersey City.
Uh, the train is full of that whole
waterfront. And it took time,
but over over time, you know, one got
developed, two, three, four, and
eventually the whole waterfront
is completely, you know, redeveloped
along the Jersey City and created its
own skyline.
With various businesses, residences.
Uh, same here with the the brownstones
of Jersey City.
An area along the park
uh, get the revitalized.
This is that factory in Newark now. It's
a luxury condos
uh, in that old warehouse factory. Uh,
it's a it's a beautiful building. It
took them a while to to clean it up, but
uh,
they really transformed that whole
building into a beautiful historical
property.
Uh, which is nice that they were able to
keep the old
Uh, this is one of the train stations
that was uh,
refurbished this year with the Summit
train station.
Uh, they did a lot of stuff with parking
decks
uh, they did uh,
incentivize commuters uh, to use the
train light rail and mass transit. Uh,
this is I believe the Madison train
station. It looks like an old church,
but it's a train station.
So, I'm going through the process.
Uh,
governing body adopts a resolution for
an area in need of redevelopment. They
send that off to your planning board.
Okay, so the planning board then does a
study or has a study done or conducts a
study to see is it an area in need in
need of redevelopment. Once that study
is done and they send it back then to
the municipal council to vote on it in
that process. So then it goes to the
council process and eventually becomes
an ordinance which is the last step.
Everybody adopts the ordinance for
redevelopment plan
to redevelop a particular area.
So but it's done in conjunction with the
planning board so there's usually a lot
of community input.
So you have public hearings, the general
public can give their input as to what
they like to see in a particular area.
Do they want apartments? Do they want a
combination mixed use with retail and
apartments? Do they want a specialized
industry? As an example in the in the
town of Kenilworth, New Jersey they
they have one of these AI companies
coming in right now with a $1.8 billion
investment in their in their town little
town
for an
AI center with an old power source, too.
So it's not going to take away from the
power of the community because they need
to take a
tremendous amount of power to use these
AI centers. Tremendous amount of
electricity.
But uh
so they're basically rehabilitating it's
an old Schering-Plough pharmaceutical
site. So
I grew up in that area as a kid. It was
called White's Laboratories and they had
you know pharmaceutical laboratories and
Schering-Plough bought it and then one
of the other pharmaceuticals bought out
Schering-Plough and now it's going to be
completely changed to a a tech I you
know a a tech center for AI
data center.
So and so the town it's like
transformational for for a small
community probably a big difference.
And that was the biggest taxpayer.
So once the pharmaceutical shut down
they were nervous like what's going to
happen is everybody's housing tax going
to go up down
because we don't have the big commercial
you know
occupant entity occupying property.
So you know that that's what their fear
was and they were fortunate to get
somebody to come in there. You want to
say something?
>> What kind of problems
do you have with that community? I'm not
I haven't researched what they're going
to do, but I'm I'm an advocate of these
small nuclear plants.
>> Right. The small nuclear plants are very
efficient.
And they're they're very different than
the old ones that they did in the 1960s.
Right. Those big plants. So, there's
space Are they are they used in this
country yet?
Uh I think our governor is is promoting
to to move that forward for New Jersey.
Salem and signed the bill for the one in
Salem. Oh, really? Yeah. Yeah.
Salem can join it?
He was just in Salem
and signed the bill for the Salem
district
using one of the small nuclear plants to
produce electricity. Oh, yeah.
So, the
questions come up areas that need to be
developed or are they not going to be
developed?
So, uh one of the instances is the state
supreme court uh their decisions to
create uh a fair share affordable
housing
uh which is statewide.
So, basically every community has to
have affordable housing to some extent.
Right. Uh a lot of municipalities put it
into their ordinance that they have a
requirement of 15% or 20% of any new
housing has to be affordable.
Uh
if they don't have the affordable, then
they're going to if they don't meet
their affordable housing obligation
under this
then it opens them up to what they call
builder's remedy lawsuits.
So, if the town doesn't comply with the
affordable housing, then the builder may
not have to abide by the density of the
local ordinance and may be able to
double it, triple it, or quadruple it.
And that's happened in a few communities
in New Jersey.
Where they fought against it, the
builder's remedy came in and then they
wound up with three times the amount of
units they originally would have had in
total. Total units.
Uh
So, basically it's it's it's the whole
pilot system is to encourage
redevelopment and revitalization in the
municipality.
Uh and it's important that the residents
are are active and vocal in speaking
about what they want in their community.
Uh
cuz the elected officials I was elected
official for years as mayor. You know, I
went out to the community and talked to
people like, "What do you want?" It's
not about I don't know. But what do you
want? It's It's our town together.
You know, so we want to do the best for
the for the community. So, you need all
that input.
Uh and the and they
Uh the residents
can really control the direction of
affordable housing and all of the pilot
agreement redevelopment that goes on.
Uh when this occurs, there's a financial
agreement that's put in place. And
that's all negotiated.
So, I'm fortunate that
I've worked for developers and I've
worked for towns in helping them in
negotiations. So, when I was mayor of my
own town, I negotiated with the
developer.
So, I'll give you a quick example. The
developer comes in and they do a budget
of here's the cost of construction,
here's how much we're going to have to
borrow. He and when we're done, it's
going to cost us X dollars. Say 10
million. And then
here's the rent we're going to get. They
have a projection on rent. And they
project the rent. They said, "Well,
based on the rent and our expenses, we
have this debt cuz we have loans. You
know, we can only pay a nickel for
property taxes." Basically.
So, when they came to me as the mayor,
they said, "Well, you know, we think we
only pay 8%."
8%? I said,
"I think your numbers are all wrong."
"What do you mean?" I said, "Let's go
into your numbers." So, that's the key
part of the whole negotiation part is to
dig into the details and get the real
numbers. So, what I found out with the
developer in my town that I was
negotiating with
cuz I told myself, "Look, I want 15%."
He goes, "15% there's no way you can
make any money."
You know, we might make eight. I said,
"No, I want 15% of gross revenue."
And what
these are all legal terms. So, you have
to define what's gross revenue.
Right? Cuz developers they're smart
people and they got smart advisors
advising them.
So, I said, "Gross revenue is every
dollar that comes into your business.
So, whether you sell stuff through
laundry or have community events, you
can have weddings in the in the
community building, any any dollars that
come in
is gross revenue. It's not just gross
revenue.
It's all the dollars that come in. So,
it's it's it's really tricky. Uh so, you
need you need
uh somebody really to help you, I think,
yeah,
to to advise you
uh when you're negotiating that. So, I
was negotiating with them and I said,
"Look, uh I think your construction
costs are too high cuz I represent
construction contractors. And I said,
"Prices you have on stuff here, I think
it's too high. So, you're inflating your
construction costs."
He was like, "Well,
you know, it's a cushion." It's well,
you're inflating your construction
costs. So, by when you inflate your
construction costs, now you're inflating
your debt cuz you have to borrow more
money. So, when you inflate your debt,
you're lowering then the income cuz you
have more interest.
So, I said, "So, you over inflate the
construction, you over inflate the debt
and that's why you're lowering your
profit. So, I'm going to adjust those
numbers on your projections." So, the
developer gives me his projections and I
adjust those to what I think the correct
numbers are. I said, "You're using a
higher interest rate than a real
interest rate you're going to pay."
So, that too, you're inflating the
interest.
So, then I went to the rent. I said,
"Okay. So, we did went through the
construction piece." I said, "Now, let's
look at the rent." So, I said, "Where'd
you get your rent?" He said, "Well,
Rutgers did a study. Rutgers does these
studies."
I said, "Rutgers?" I said, "Oh, it's
nice you used the Rutgers study." I
said, "I but I don't believe it. I
believe in
what is the real rent in my community?
So, they I said I went they went to a a
a development project that was 25 years
old
on a major state highway.
I don't know why everyone wants to live
on a state highway.
You know, I'd rather live in in a in a
quiet street than
busy thoroughfare. So, I said so their
rents are lower. And it's 25 years old
and it needs refurbishing, so their
rents aren't as good. I said where this
property is is up on the hill in the
woods. A beautiful area that people are
going to pay more rent than down on the
highway.
So, I said so you're understating the
rental income.
You're using a too low of a number. So,
I said I'm jacking that number up. So, I
jacked that number up. I lowered his
construction cost. And now lo and
behold, he's got substantial profit to
pay my 15%.
And that's how we got there. So, he
wasn't happy. So, then
I just tell you.
So, they hired uh
rest his soul, uh Senator Cody, Governor
Cody.
His son was one of their consultants.
And he was there. He goes, "Well, I came
I read your articles. You know, you
wrote about these PILOT thing uh
he goes, "I'm help trying to help these
guys." I said, "Well, that's nice you're
trying to help them, but I'm helping my
town."
I'm the mayor here. This is my town. You
don't live here.
You know, so I'm helping my town. So,
that's how we negotiated. We had a very
fair deal. And uh
they're in the process of building it
now. So,
Yes, sir. What percentage went towards
the uh tax relief for the residents in
the town from the property what is it?
Well, I want what percentage
The way the PILOT works is
100% money goes to the municipality.
Okay? And you have to give 5% to the
county. So, that's under the statute.
So, that's like fixed.
Nothing has to go to the school. But you
can decide where you want that extra
money to go to.
So,
because the school just so you so you
understand the way the finances work.
The school puts their budget together
for
their operations. So if they need $10
million for the school budget, they put
in $10 million. The town's going to give
them $10 million. Right. For the budget.
So if we have this
agreement with a pilot
and this developer is going to pay other
money that's going to come in to the
town
the school still getting their $10
million for the budget. So
you know, so so they're not getting
cheated in any way by this extra money
coming into the town. But it does come
into the town.
Um I I think that
I'm not sure if everybody knew that
there are three ways to collect money
for pilot programs. One is through the
phased in which we have always used and
that's mostly the 30 years and they
don't come to full payment of their
taxes until the 30th year. The other one
is like you said with the percentage of
cost. I believe it's 2% of cost is what
you can charge with everything included
and the other one is 15% of revenue.
Those are things that we need to see a
side-by-side comparison [clears throat]
of which is more beneficial to the city
of Pleasantville. For each project.
Right. For each project. Right. You need
to you need to chart that out and and
run through those numbers. So one of my
other partners works with me in this
arena.
He's he's spends a lot of time in
Woodbridge cuz Woodbridge has a lot of
pilots and he'll have to redevelop it.
>> [clears throat]
>> And the mayor of Woodbridge, John
McCormick, he's a former state
treasurer. He's a college classmate of
mine and directors.
Bright guy, knows finances, but he wants
somebody to go through those numbers and
say
what are we going to get at the end of
the day? And some of the great things
they've done with their pilots, I mean
they built a a indoor skating arena, a
hockey arena for skating for the
community. Mhm. Uh which phenomenal. It
is adding all these extra community
activities for its residents through
[clears throat] the use of pilot money.
Mhm. Uh,
and the schools are doing well, too. Can
I ask a question? Yes. So, with that
being said, within the pilot program,
is that the language in the agreement
towards uh
for the money to go towards the lower
taxes, a certain percentage, or like you
just stated, uh money go towards if you
want to say uh we want to add whatever
within our town. Is that the language
that has to be in the agreement in the
pilot program, or is that afterwards
once the city receives their part?
>> Afterwards.
>> Okay. It's that's afterwards because the
pilot agreement is between the
municipality and the developer. Right.
As to how it's fixed what they're going
to pay to the municipality.
What the town does with it afterwards is
up to the town to develop a plan. You
know, so we're kind of out of that loop.
So, let me
Let me understand. So, so we So, what
we're looking at out of their agreement
is how much money the city's going to
get out of it. Right. Plain and simple.
Right. And then And then how that money
is dispersed. That's based on the city.
The community discusses how we're going
to spend that money. Now, let me cut it
real quick just for my understanding.
So, the community
uh did you say decides how that money is
going to be spent, or is it up to the
city solely determines how the money's
going to be spent?
Well, it's it's your elected officials
who the community should be influencing
in their decision.
You know, the city decides that.
Okay. Can I Can I ask you something real
quick? Carla is one of us. Yeah, can can
I ask you something real quick?
[laughter]
It's coming from establishing your
municipal tax abatement policy through a
municipal ordinance. And I'm I keep
asking this question about the taxes.
Listen to this question. This is a
delegated balance because too little
subsidies may cause a municipality to
fail to realize the development
objectives, but too much may unduly
burden other taxpayers who must offset
the subsidies through their own tax
dollars.
So, what I'm getting at again
the tax dollars we as the taxpayers in
Penn Hills
we're looking for from the pilot
programs a certain percentage to go
towards lowering, you know, our property
tax what we're paying.
You know, cuz I was reading something
even last night in reference to
sometimes it can add up to $15 based on
the project cost. And then once you do
the math and break it down just for an
example if it's 15 if it's a $150,000
for an example. Once that's broken down
comes out to $15 that can go towards
lowering your tax dollar, your tax
payment is for each individual. Yeah, so
let me just get one of the
one of the other nuances in the
negotiation of the agreement
uh came up with schools. So, when I went
to the developer
he said, "Oh, you know, there's not
going to be any impact on your schools
with our development." And I said, "So,
I said, so woah woah woah woah woah wait
wait wait wait you're building 240
apartments."
They're like, "There's no kids?" They
said, "No no no no no no no no no no no
no no no no no no no no no no no no no
no no no
>> [laughter]
>> But I said, "What I'm going to do I'm
going to use that other project." So,
the other project had 400 apartments.
So, I went back to our school system and
said, "How many kids came out of the 400
apartments?"
I got the right numbers. So, then I
said, "Look, these are real numbers.
These are the kids that came out of the
400 apartments." So, you're still 40.
Here's the number. You're going to
affect our school district. That's why I
need more money.
And so, that's why you really need the
facts
You
We've got to You can't look at this as
like that they're going to lower our
taxes.
They are going to be contributing to the
tax base. And whatever we get extra
money if there is any because they will
be children going to the school
district. We only contribute 11% right
now towards our school district in the
city of Pleasantville. Um, but there's
other things involved.
11%
of our tax dollars.
No, a total a total of of 11 from the
city. 22 is from state from federal and
county. Yeah. And the state gives us
78%.
No, it's not you wish it was 22 but it's
not 22.
Cuz we'd be in collective despair
but there is an issue.
There are other things involved. We
reimburse for trash pickup in apartment
project. Yeah. In the city of
Pleasantville, the landings, all those
places, we reimburse that company.
When we build
pilot programs like this that are going
to have 180 apartments
this one coming up
on the plans
we're going to reimburse them.
Well, that's money out of our pocket
that we are not getting as property
taxes from this. So, that's coming out
of your pocket to pick up trash in this
project.
>> Can I Can I just say something? If I'm
not mistaken, that was something that we
negotiated where they going to have
their own trash pickup?
>> Yeah. So, that's not going to be a
problem.
>> has theirs.
>> No, no, no, no.
I'm I'm talking about this project.
This No, that was something that he said
they were going to put dumpsters out and
not have the service that they pick up
in the apartment complex.
>> had this discussion.
>> these are things that need to be
negotiated in a contract. But those are
things that never come out. Those are
small things that
actually are dollars and cents to the
taxpayers of Pleasantville that we need
to be conscious of as [clears throat]
taxpayers. It is not going to lower our
taxes. You're not going to see a
reduction in your taxes
at all.
Just
jump on that point as well. So, in in my
town we have volunteer fire department.
And so, this
this particular this particular project
is going to be
a four-story
building. You need a ladder truck. We
don't have a ladder truck.
So, I said, "Look, you're going to force
us to get a ladder truck. This is a big
cost to our other taxpayers just because
of you, for your development. We're not
getting anything out of that. That's to
save your residents. And then you're
making the money off of over there." So,
I said, "We need to factor that in,
too." And we went up negotiating
actually with a neighboring town to
jointly come together and get the ladder
truck cuz we have uh
uh a joint agreement with North
Plainfield, the surrounding town, and
our other surrounding towns.
So, let me
move a little forward here. So,
uh the key the key with these financial
terms, uh just uh
I didn't catch your name, Emma, but you
did mention there's a 30-year like
[clears throat] horizon here. And
ideally what happens is they're paying
the pilot agreement based on the gross
revenue, right? A percentage that is
15%.
And over time
by year 25, they're going to be at or
greater than your ad valorem tax,
probably.
You know, with the cuz if the rents keep
going up, the money keeps going up
that's coming in.
So, at some point though, it
it drops off. At 30 years, they'd be
paying your ad valorem tax like
everybody else based on the assessed
value of the property.
So, we look at some things in Jersey
City.
Uh we reviewed 19 out of 179 pilots.
It's a lot of 179 pilots.
Uh
where uh
property owners worked around the terms
of the pilot agreement.
So,
the developers knew the terms within the
agreement and they
shifted how they do their finances to
basically cheat the city, which
comes in as well cuz all of these pilots
required annual audit.
Uh but somebody's going to look at look
at them, too.
So, of the 19 properties, they
represented over a billion dollars in
real estate value
paying 39 million a year. So, 39 million
is a lot.
But it would have been 80 million a year
under the regular tax.
So, it's a big difference. And
So,
just speak I'll jump I'll jump on
it. I got a bunch of worries. So, so
Newark,
uh
we we had a case where the developers
set up since you're supposed to get
gross rent, right? A percentage of gross
revenue, right?
The developer was tricky, so he said,
"All right, I'm going to set up a master
lease with an affiliated company for a
lower rent." So, he rents the entire
building to an affiliate for, say, a
million a year. And meanwhile, that
affiliate then rents out all the all the
other apartments to everybody else and
taking 4 million a year instead of one.
So, they're paying tax on the 1 million
not the 4 million. So, they were
basically cheating the city of Newark.
Uh we have we uncovered that when we
went through and looked at some of their
pilots.
So, 53% of the entities that we sampled
failed with having the required annual
audit reports. They didn't They didn't
Developers are required to submit it
every year. They didn't have it in
there. This was in uh I think that was
in Jersey City.
Uh outside auditors could be contracted
to audit the pilot compliance.
So, uh your auditor is here, right?
He audits your your municipality, goes
through everything. The pilot compliance
is like a little sliver of the total
thing here. And I think you have what
eight agreements? Do you know?
Is it seven or eight? Seven or eight?
>> My office don't know. Yeah. It's not a
lot. You don't have You don't have a
hundred, but you you have a few. Yeah,
but they come down here.
Yeah, I think So
uh
these are legal agreements. And so the
language is
really specific and you need really good
definitions of what things are.
Don't have to have good definitions and
understood examples.
The likeness the outcome of the outside
is the profit making entities going to
try and cheat your city. So
I'm just telling you from my experience.
So
the definition of what the annual
service charge is, how it's computed
with examples, the annual audit report,
which whatever schedules you want. If
you want them to give you a list of
every tenant
uh and what the rent is, you put that in
the agreement. And then they have to
provide it.
Uh definitions of what net profit is. So
I have I have a case where
people think net profit is something
totally different than what I thought it
was.
You got to define what it is and how
it's computed net profit. Cuz not
everybody has the same definition. So in
a high-rise building and part of the
agreements was definition concerned on
how you going to receive the money
towards the municipality. If the
high-rise development has apartments,
but the lower level is storefronts. Are
they supposed to
get that money for the storefronts
as an extra or just on the rent?
The whole thing?
All of it? So you you can you can
actually negotiate the agreement. Mhm.
That's the retail. That's it. You get a
percentage of what the retail store is
If he goes Negotiate that. If he go back
and you find out and say a gentleman
like the self comes in and do a audit
and find out things was done kind of
scrupulous, right? Just follow me with
this. And you find out things were done
wrong.
Can the municipality recoup
anything from what was done? Yes,
absolutely.
>> Okay. Absolutely. So that happened to
Jersey City.
So, Jersey City uh they went back to
Lefrak.
Said, "Hey, you know, we went through
your agreements and we think you
underpaid." And they fought a little bit
here and there and then Lefrak came back
and said, "Okay." And they gave a
boatload of money. It's a lot. A real
lot they paid to settle the dispute.
So, but you definitely can get it back.
Okay.
So, definitely like I said mentioned
earlier, definition of project costs,
the duration of the agreement also over
30 years.
And I recommend that you look for a
minimum threshold percentage of your
real estate taxes. So, you don't want to
get any less than a certain amount.
So, you have like a threshold they no
matter what. I don't care if you made
money or not developer. We need a
minimum threshold of X dollars.
Doesn't matter what your rent was.
And under these agreements the land they
still pay the tax on the land. So,
they're still paying the ad valorem tax
on the land. It's the improvements that
are
is under the
>> [clears throat]
>> And that's tricky, too. So, like on ours
we we may then kick in as if it was
a higher assessment on the land cuz it's
farmland assessed at 44 acres. So,
they're paying like nothing.
So, we made them have to pay more.
They know
you know, to to go back.
Yes, it's farmland assessed but they're
paying like nothing.
$1,000 on the first 5 acres.
So, they paid the
uh annual service charge and the land
tax and they paid quarterly.
Uh there's audit reports and it would
have consequences if they breach not
giving you the audit report. You could
have accelerated amounts of money. But
these are all negotiable things that you
want to make sure you put in place to
protect the municipality.
Cuz you're weren't them a break. I mean,
they they are taking a risk [snorts] as
a developer. Believe me, there's a big
risk as a developer. They do have a big
risk. But
you know, you're taking a risk, too.
Right. So, and then limitations on their
profits and reserves. So, if it's based
on on something with their profits, a
lot of times they'll put in these
reserves. And the insurance companies
are great for this and all that.
States complain to me about the
insurance companies
because they put all these reserves and
they don't pay anything. That's right.
Build in more reserves and then they're
all, "Oh, we're sorry. We don't have
money."
You can adjust the reserves.
And then by adjusting the capital
capital to reserve fund requirement as
they see it.
And the reserve fund requirement, is
that how they would do that? By
adjusting the reserve fund requirement?
>> necessarily that, but
any kind of reserves is is a way to
it it should be based on some kind of
calculation that's like sets
the reserve.
Not just arbitrary cuz they don't want
to want to pay.
Uh issues raised in compliance reviews.
Uh management agreements where uh they
overpay expenses. We've had that, too,
where
they said, "Oh, we didn't make no
profit." Yeah, they have a management
agreement and they're paying all the
expenses over to a related company.
You know, it's not not realistic. You
know, the CFO is getting all this extra
money and all of his his relatives.
Uh
commingling multiple projects. We've
seen that, too, where they bury expenses
from the other project and they say,
"Oh, sorry. We're not making any money.
We can't pay you."
Uh
So, the municipality negotiates these
terms and uh like I said, you really
need to go through every little piece of
this. And there's extra things you can
kick in. You really can customize it to
your specific needs and what what you
want in the community.
Uh annual inspections of units and and
and fees. That's another one.
Uh
in the financial projections, so the
developer puts together financial
projections.
Uh we do those. We've done those for
developers and we've done them for
municipality, both.
And and
in my case when I was the mayor then I
critiqued it. You know, went through
each of the each of the items. So, there
is estimated project costs. You have
your land and land improvements.
So, that's pretty clear what what
they're going to pay for the land. You
have a contract for that.
Uh if it's hasn't been purchased yet. Uh
architects and engineer professional
fees you always have.
Construction costs. There's a lot of
latitude in construction costs.
And
uh
today versus 10 years ago, material
costs were significantly higher.
Way higher than they were 10 years ago,
so.
Then you have insurance, interest.
You know, the developer may may get a
really good interest rate because he has
a lot of other projects with his
financing with his bank.
Uh where where somebody first guy
project he's doing will pay a higher
rate.
Uh so, their financing costs, what they
get in permanent financing. Well, so the
developer during construction has
construction loans. They're paying it,
you know, interest only.
And then once once the project's
complete then they turn that into
permanent financing. So, they get a
mortgage like you do on your house.
So, they get a long term of some type.
The long long term amortization on it.
All right. They have marketing costs.
They pay for real estate taxes during
the process.
And during the process they pay the ad
valorem tax. Uh so, in my case when it
was Parkland the city said, "No, no,
during the process of construction
you're paying full boy ad valorem taxes
on what that land could be worth."
Uh in developer's overhead. That's
another one where they can wiggle.
Wiggle with developer overhead.
Uh project uh construction costs.
Uh challenging the amounts they're
using.
Look at the industry standards. You
know, what's standard in the industry
and are they deviating from the
standards of that industry?
They typically overstate the
construction costs, which overstates,
like I said, the the financing costs.
Uh
and
if if I'm the developer, I want to pay
the least taxes possible and make the
most profit from this project. That's
just a fact.
profit
Uh so, they like to overstate their
costs and understate what their
projected income is.
And uh
like the last one here, understate
projected number of children to attend
school. That one you really need to get
do your homework. Do your homework and
know how many kids are going to really
you think come out of this project.
Don't let them rely on their record
study.
Cuz that's all they ever do. So, we work
with other
We're we're a CPA consulting firm. We
work with other uh
business professionals that all they do
is like the calculations for these kinds
of things and they get to do the
financing.
Uh
and they they won't trust the record
study. So, in my town, we hired a
financial consultant.
And I disagreed with them.
I disagreed. You go, "No, it's it's
typically you get typically 10%." I
said, "I want 15." Really, you typically
get 10, I want 15.
Cuz they can pay 15 on units. You know,
so I'm not I'm not going to rely on the
record study. I'm going to go get the
actual what it's going to show up that
we're going to have to take care of in
our school system. Cuz that's the
driving cost. You have to build a new
school.
With eight teachers? Where can it all
fit in with the existing school system?
Okay, you're going to have here a
performa comparison of expected rental
income. Look at vacancies, you know.
They like to tend to overstate what
their vacancy rate is going to be.
I've never seen an apartment complex
with 100% vacancy. I've seen retail
space 100%.
Retail space, but never People want to
be in a place all day. So, the are never
100%
Uh
but they'll they'll they'll overstate
the vacancy rate.
Uh they'll overstate their expenses just
to show lower profits and same with like
I said interest and the debt.
So, you need to challenge those
projections, negotiate that.
Uh
research and find uh what can increase
the rental income or what can increase
the revenue to increase the driver
That's the driver for your pilot payment
that you want to get.
They'll they'll understate uh
the affordable units rental income as
well.
They I said they use the Rutgers study,
the school children
impacts on your schools, all right? So,
challenging the impact. It's worth
challenging the impact. You know, it's
big and and getting the right numbers.
Uh
in our case, maybe at the end of the day
we wouldn't have to I know we didn't
have to build the next
But maybe you have to get teacher or
buildings, some visual aids.
It depends on the on the project we're
talking about, how big the project is.
And a lot of lot of I don't know about
uh Pleasant Hill, but
there were a lot of towns that sold off
their schools when the population
dropped. It was like a popu-
population dropped. They're rebuilding
the old building.
>> a new one. We're building a new one.
Yeah. That is the key. Yeah.
School development, sorry. It's building
a new one,
not the city portion. Right.
Okay. Uh financial impacts negotiations
This will be This is in in the in the
stuff you can take to the voters. Mhm.
Um
In in any part of the
um
financial
aspects of this and any agreement,
does the developers start Do they pay a
school rate from the beginning or is
that not part of the or is that
something that has to be negotiated? The
sewer they have to negotiate for hookup.
So, I'll give you my example in
Watchung.
So, the closest sewer hookup was our
neighboring town called Berkeley
Heights. That's the closest. Berkeley
Heights said, "You're not tying into us.
Too bad. We're not We're not We have no
interest in letting you tie in cuz we
have our own developments going on."
So, they were shut out of Berkeley
Heights cuz it was the closest gravity
feed sewer.
So, then they said, "All right. Well,
we'll go to Plainfield." That's the next
one. Well, Plainfield, it's interesting.
They had to go down the mountain. It was
up on a hill. They go down the mountain.
Then they had to build a pump station to
run back up the hill to then come back
down the hill again to tie into where
Plainfield was.
So,
and that went through a a big
developer's property where he controlled
the sewer line.
So, if the town had to get involved with
negotiating with the existing retail
property owner who controlled that sewer
line to tie into the line to go through
his property. So, it was closer to
Plainfield.
And then we negotiated that you, the
developer,
are going to be 100% responsible and I
want reserves put up front
for when that's sewer pump station busts
because when that thing busts, you've
got 230 apartments pumping all their
sewage
and it's not going up.
You know, it's an emergency. The money's
got to be there way in advance. And you
got to put the money there now. Right.
Well,
the reason I asked is because like the
ACUA has a thing where
they don't have a meter, but they charge
each municipality by how much waste
comes into their system and that's how
our sewer bills are
sent out and adjusted for. So, if we
have Say we have a a program coming
online and they have 200 apartments.
In that amount of space that those 200
apartments are, maybe you could put 30
houses, which means maybe you have 60
toilets in there as opposed to the 200,
which maybe have at least 200 toilets if
not more that are going to be flushed
daily, which means that the the
homeowners of Pleasantville, their sewer
rates are going to go up because there's
more incoming waste into the
um ACUA.
So you want to force the developer to
pay for it. There you go. Apparently,
thank you. Yeah, you want to force the
developer to pay for that extra flow.
Absolutely.
First thing you you you got to make sure
they have the capacity to take the flow.
And that's the big thing.
>> And if they have the capacity to take
the flow, and if they do, you want the
developer paying the extra so your
residents aren't impacted by that.
Right.
I mean, one of the one of the things in
Newark is they still have their uh storm
drains,
a lot of them, that go into their sewer
system.
So they're pet paying the Sate Valley
Sewerage Authority for rainwater going
get processed through, which I think is
totally nuts.
You know, to pay for rainwater going
through there because they never
bifurcated and had a separate sewer and
stormwater.
>> [clears throat]
>> And it's and
I don't know I don't know if you have if
you ever did testing on your system
here, too,
you know, with with uh
is there water seeping into your system
anywhere?
You know, if there's cracked pipes and
there's water leaking in, you're paying
for more flow going through there.
You're paying for sewage through
rainwater flowing through your sewer
pipes.
So I know cuz in my town we did that. We
we hired the the
engineering firm to go in and put the
the lines through and they found where
there's leakage coming in
cuz there's a lot of streams and there's
so there's stream water going into the
sewers and our town's paying for that in
sewerage overall, even though the
residents are paying
whatever they're supposed to pay,
at the end of the day, they're paying
more than us. For the rain water. Is
rain water going in?
What what
in in the in the situation that the town
is already aware
that the sewer line is already
incapable and these not up to the
standards that should be.
And then you either have um
uh a new building right instead of the
line of the sewer system itself
throughout the whole city. How how how
can this also be
you know,
put into the
into the conversation in terms of
you know,
if we if we have a developer coming in.
Bobby has the answer to that.
>> All right, yeah. I I can answer that
point because the work on it um we
actually um
we actually recognize that that is the
case um especially in that location.
It's new development. So,
um that particular project is going to
require um
the the new obviously new um water
systems going in over there. Have you
been in 95 lately? Have you been in
there lately?
You see what is being done
That's it. That's that's pretty much you
know, the work that we're doing to make
sure
that they're able to um
take on that additional
load of
sewage. Let me just also say that based
on um
that same information
um
please understand that they will have a
sewer bill.
Their sewer bill
offsets that additional um
amount that you know, it doesn't go to
the to the other
property owners. They they they'll pay
their own sewer bill. Like they'll have
a sewer bill themselves. So, it's not
like they have to increase anything
[clears throat] for them.
It's you know, they're carrying their
load of flow
the amount of units that they have
and their own personal suit suit for
that project. So, who is paying for the
process that's going on now?
So, that's great that's a great
question. It's a
collaborative. You know, we negotiated
it out with the
both of us to do some of the stuff, and
then we've been able to get the state to
help us out with grants
to do some of it. So, none of it's on
the taxpayers right now.
Zero.
Okay, a couple other things just to to
keep me mindful of traffic issues,
traffic studies, road grading.
Uh
my project in Watchung is a there's a
right on a county road that's in
Somerset County, but there's an
agreement with Union County that Union
County controls the road.
So, even though it resides in Somerset
County, Union County controls. So, the
developer had to go to Union County to
try to get approval to put a traffic
light in because you can't get out of
his development without a traffic light.
And so, Union County said, "Well, you
know, we have nothing to do with it."
And they came to Somerset County and
Somerset County said, "Hey, there's no
light there now." And our town has no
traffic lights. So,
we don't have to maintain any. No, we're
not maintaining it.
And so, who's going to maintain that
light now?
So, it's all forced on the developer,
but the traffic study, I had to laugh at
that too because the roadway right now
it's between two state highways, Route
22 and Route 78. It goes between the
two.
In the morning, if you're from Route 22
up to Route 78, it's bumper to bumper.
People going to work and commuting. And
at night, 5:00, it's bumper to bumper
coming down from 78 down to 22 the other
way.
So, I said, "That it's like a the worst
road you could build to have more
density on."
And [clears throat] they said, "Well,
you know, uh
they got it Somebody's going to hear me
say, "Well, it's it's it's not that bad,
you know, that kind of thing." But, it's
terrible.
It's terrible. If you're If you're there
every day, you see it's terrible.
Uh
another one, negotiating pedestrian
sidewalks or bike lanes.
Same Same thing. This is the
opportunity, if you can negotiate the
pedestrian walkways or bike lanes for
safety reasons,
the factor that in there, too. Same
thing with landscaping.
You know, we have a lot of people that
wanted certain kinds of landscape,
certain kinds of trees.
We have the heavy tree ordinances in our
town. Like, you take a tree down, you
got to plant a new tree. They don't like
just uh
uh evergreen, they want oaks and maple
and everything.
Uh which is great.
You know, cuz it's it's a woodsy area.
That That lot of uh vegetation.
Uh
but the traffic lights, road widening,
of lanes, turning lanes,
uh
those are all things you got to account
for. And then lowering the speed limits.
Thank you.
Lowering the speed limits.
>> Thank you. So,
well, I tried I tried to get the county
of Somerset to go 50/50 on putting a
sidewalk that would go through the
entire length of our town, which is
about 3 miles long, I think.
3 or 4 miles long. And have a sidewalk.
There's no sidewalks at all. It's a
county road, no sidewalks.
I said it'd be a great thing to put
sidewalks the whole length. People would
walk, bike on it, much safer than, you
know, walking in the street or riding
your bike on the edge of the road there.
And the county's like, "No, no, no, we
don't want to do it." So, I said, "Then
lower it. How about lower the speed
limit?"
Cuz it's 40 40 miles an hour. And when
you're walking there, it's not that safe
walking at 40 mile an hour cars. Lower
it to 25. They said, "Well, well."
So, I did it just for the one section,
close closer to the borough hall.
But uh
on both sides of the borough hall they
did it, but they didn't do it for the
whole length of the roadway. Cuz if you
lower it to 25, then these people are
driving slower.
It's not not as That's unsafe.
Uh considering environmental impacts,
uh you're you got the water here. You're
on the water, right? And I'm sure
there's all kinds of wildlife in the
water. No, no. Birds,
birds, turtles, birds, and stuff.
There's a lot of stuff there.
Uh, so I know we we have we have to have
we we have the different kinds of birds,
turtles, That's all we have. and uh,
I personally believe that uh, they
should have developed it. They should
have just made it like parkland and then
the green acres. Uh, and then it's found
an engineer the engineer came in and he
did a study to send the DEP to get the
approval to build these units. And he
said, "Well, these species that you have
there, it's really not conducive for
them to be there." Mhm.
>> he's saying it's not conducive. It's
better that you have them, you know,
apartments and you know, first off these
animals.
You know, it's right. Now it's like you
have these animals that have been here
for thousands of years.
So, uh, big question on on flooding,
storm water, that's another one to watch
out for. This my particular project
didn't watch out for. This is at the top
of the hill.
Yeah, all this lush vegetation. You take
it all out and you put in 230
apartments, hardscape. Where's the water
going to flow? Down the hill.
Well, where is it flooding already? Down
the hill.
So, Route 22, that's state highway,
floods almost every time it rains and
now it's going to be a lot worse cuz of
all the hardscape the water's flowing
there.
So,
and so there should be a study as How
How do you mitigate that? You know,
where do they divert the water to?
This I already touched on the Jersey
City stuff.
This is a typical chart that we wind up
putting together. The developer put it
together and we'll put it together.
And it goes through the years, 30 years,
from year one to year 30.
Shows the uh revenues, gross revenues,
their operating expenses,
property tax filing, reserves, what
they're going to make in cash flow from
the from the property, how they service
their debt, pay down their debt.
Mhm. So, this is all like an accounting
uh nightmare to put that together, but
you know, that gets done basically, and
then each of the numbers gets evaluated
Does it make sense in The developer will
use these to basically sell the
municipality, "Yeah, look, I'm not
making money. I need a little pilot, you
know,
6% pilot versus 15% pilot."
And And on those annual audits, does
this get reviewed from from from this
base?
Does the whole program get um reviewed
from this base since it's set up from
this base? This This is all the
projection Uh to establish the project.
Yeah, once you have the agreement set,
whatever's in the agreement that you
want it based on whatever's in the
agreement. Mhm. And then there're actual
numbers. So, look at the actual
operations of what what occurred.
Now, you got your topic here, thoroughly
evaluate adequacy of the sewer capacity.
Mhm.
How you going to handle the sewage,
who's going to pay for it, emergency
services, EMS,
fire, Skilled labor resources. Mhm.
Uh
mass transit for affordable housing. I
said that
this [clears throat] My project's on the
top of the hill, and they're not
required to put a sidewalk to go to the
bottom of the hill with the bus
services. So, I said, "The poor people,
if they're affordable and they don't own
a car, they're going to walk down this
roadway that's 35 mph with no sidewalk.
That doesn't make any sense. They should
have to put the sidewalk in there."
But, always look to apply sound planning
for community growth and community
development.
You know, what's best for your
community? And I I I would say it's a
great idea to bring in more people from
the community,
get their feedback, get their ideas,
educate them, and this way you're going
to have a
you know, more cohesive community to do
what's best for everybody.
And consequences to the financial
agreement for non-compliance. If they
don't comply
with the annual audit or any of the
schedules that you want to get,
uh it should be reviewed, too. I've been
to a lot of municipalities they don't
even review it, they just kind of throw
it in the file cabinet. We got it, throw
it in the file, and that's it.
Makes sense to look at your review.
You'd be surprised what you'd find in
your review.
Tax assessor and tax collector need to
coordinate the control over the annual
reporting of the pilot agreements.
The timing of these audits can have a
significant effect on the
municipality's budget also, especially
in mind in the cash cases.
Basically, in New Jersey and we see a
lot of places where these audits are
delinquent, and they can greatly affect
the stream of revenue coming in to the
town.
Yeah, cuz they're paying the current
year based on a prior.
Until they do the audit.
So, wouldn't it be a good idea for that
it be part of the
the city's assessing and accounting to
know it's part of their job to be on
this is part of their job as an annual
process?
>> saying. That's all right. That's right.
They take
certain things that they have to file
on. Yeah, with them.
But I thought they uh
They occurred.
On the other account, have they
occurred?
These annual audits on the owner
occupied? Well, these annuals what he's
speaking of are
the
audits of the developers. They have
their own audits.
>> Specific to you. That they submit to the
town. Right. But for the eight that we
have existing, have they have they been
occurring on annual basis? Those They
come in, they come in, but they they
have been delayed. What we've seen is
that you're not collecting necessarily
what you expect to in any given year
because these audits have been delayed.
So, you're not getting everything until
the audit is filed. That's sometimes
that can if they're delayed one year and
they're delayed the next,
maybe you're almost made whole because
they were delayed. But, there are times
when it can have an effect on the cash
flow of the town. And again, in your
town currently is it pretty It's not a
significant revenue source at this
point. You said seven or eight.
What happens right right Yeah, no
consequence.
>> What happens right in the same If you
already That's That's my loss. If if the
reporting right in the same 2015
compliance Right.
Now, if the audit is in compliance right
in the same with with the initial
agreement, if you're talking about
you say annual audit,
same way you know, they they come out
and and and they evaluate my house every
year. If I grow another
1 in of grass, they want to charge me
more. But, again,
right in the same
what happens overall,
if those persons that are
responsible and it goes to the authority
that they're not that they're not
distinct, but they are just, you know,
Yes, it's fiscal.
>> No monetary penalty. Correct. We have
Have we ever collected one single dime
as a monetary penalty for these late
years? And my answer is going to be
probably not. Right. Except for
Because we We have never seen a report.
A report has never come before any of
these people on that side. This is
something that we have to do.
So so so
Yeah, so one of the one of the reports I
think is is beneficial to look at
each year
is the comparison of what the PILOT
revenue is
that you're getting as to if it was
fully assessed. Right.
So, if they were paying full bore
assessment like everybody else,
what's that difference? You know, cuz in
theory over time, it should come
converge together.
So, at the end they're fully compliant.
What do you What would you use as your
assessment though? I mean like I know
it's you know standard value,
fair value, market value. How do you
assess a property like that? That's
Typically the the tax assessor assesses
the commercial properties based on
revenue. And do we need commercial
properties involved in it? It does every
pilot require a commercial property No.
involved so it could be all residential.
Could be all residential, could be mixed
use, could be all commercial.
And the pilots don't necessarily all
have to be 30 years. No. No, there's
three ways of doing it.
But all of them 30 years. All.
I don't know if you know something about
it. I don't know about anything. I knew
about was 30 years. That's it.
30 years long time. Yeah, it must have
been my last slide.
Thank you. Question Question for you.
Yes.
And and thank you first of all. Yes.
Yes.
>> [applause]
>> Let's say
the volunteer and stuff like this is
big. It's it's hard to get people
willing to come out. Especially on a
Saturday.
We're starting this a little bit gang
going on somewhere that you're that
you're tied to. But anyway,
um
thank you. Um
my my question is simple
because there is a lot of information
and trust me since the legal list values
I always spoke um
we've been kind of digging in just to
make sure we understand every aspect of
it. In your experience, how has the
pilots been in your city and has the
risk uh justified the rewards for you?
Is it has it been a a good experience
based on
um
you're going through and making sure all
those things were done properly and has
the pilot actually served your city well
and development fund that has that surge
result. So, where where I where I was
the mayor
and we only had that one and they're
still under construction. So, they have
So, the other ones that you Hey, the
other ones where I I've actually worked
with our business,
our Newark and Jersey City, Woodbridge
and
a lot lot of them do real well. That's
what I was going to say. A lot of what
you just mentioned cities that have
transformed in the last
10 years in the state. Yeah, Jersey City
is like phenomenal the growth that
they've had.
So, they don't need more pilots. I
understand
what's that? Asbury Park has
gone through a major transformation and
it's the same thing with Newark. Yeah.
Yeah. Okay. Yeah. But what
what I was meaning from what you were
speaking of
in relationship to Mr. Laws' question
the thing that comes to my mind is with
the pilot program
are the key players in developing a
pilot program for the municipality?
Right. The professionals that have the
skills with pilot programs. That's the
key part and also with that you will
build a great agreement for the
municipality because developer has his
lawyers Right. with the developer
lawyers. Right. So, what we need are the
key players Yes. that will help
developers. Once it's developed then you
need the municipality to have the
individuals in place to watch over the
pilot program annually. Right. So, that
way you always follow the dollars and
make sure everything is accounted for in
the city. That's right.
And
and you know, we're talking about
municipalities, Jersey City, Newark,
even Asbury. These are all cities in
North Jersey that their proximity to
people coming and living in these areas
and working either in those cities or in
New York. Totally different from what's
down here. And I have to say that
probably Jersey City has had a
resurgence in gentrification.
Because if you're saying those
apartments, those brownstones were
expensive, you know darn well who's not
living in those apartments in those
brownstones.
It's a whole different ballgame in the
city of Pleasantville. First of all, we
don't have high-paying jobs anywhere.
As compared as to what is going on in
North Jersey, okay? So,
what were what the people are going to
be here are going to reflect what our
residents look like in the city of
Pleasantville. The other thing is, if we
bring in an influx of 200, 250 more
people,
what is the city are we building other
businesses to bring people into the town
to just spend money because of that? And
that's what we have to look for for our
pilot programs is what are they going to
bring in to us as a city to make us
without us having to expand any more
energy or any any more funds to bring
people in.
So, just finish.
What what city are you in, Summit? You
were the mayor of Summit? Of Watchung in
Summit. Watchung, okay.
You guys have a water water
front water way on Mary in Watchung? No,
we have a lot of streams that flow into
two lakes. Oh, nice. Nice. Okay. And the
two lakes converge in this one heavy
stream that flows down
into Plainfield. Right. Right. So, we
had a hurricane in it was when I was
mayor. Uh-huh. So, we had a deluge of
all that rain. The streams all went into
the two lakes. The lakes overflowed.
Where they converge, it's like a 40-ft
soaking ravine.
It was quarried out where the water
typically flows. It came up above the
40-ft and into the roadway. The cars
were boats. Wow. They were going down
the roadway. So, our police officers had
to save a lot of people. Can Can you Can
you speak to something I think there may
be a misunderstanding as well. Just
listening to the audience,
there may be a misunderstanding between
the community benefits [clears throat]
right over here on my left hand and on
my right hand, the negotiation of the
actual pilot. So, in the negotiation
[clears throat]
of the pilot and how that pilot
functions is one thing, whether it's 15%
or percent, you know, whatever, you
know, we negotiate within the pilot.
Those dollars get to be spent by the
city
at their discretion, right? But the
community benefits, that's something
totally different, right? And can can
you speak to those community benefits as
uh
in negotiations of a a pilot program?
Maybe you want to, you know, some
support of the the local sports teams or
you you dream of You can you can't
negotiate that development. Right. To
put it in. That's that's that's where
I'm going. Yeah, you
you can't do that. It's not going to
hold up. You can't do that. Right. Okay.
So, you want something specific for the
for the track, you know.
I mean, I was a big track guy in
Woodbridge.
So, that goes straight to them.
I always loved indoor track, you know,
but there's not many indoor tracks out
there. It's on German.
The information that we just received at
the past League of Municipalities
and it was the mayor
the mayor of North Woodbridge. John
McCormick.
Who gave the presentation.
But he also conjoined in writing the
same school board and with everyone else
that that one in
that they could that they formed a group
in terms of looking at the whole
re-
configuration of Woodbridge. I
I was able to see personally some of it
because one of the things that they
highlighted was the high was the high
school. The high school and the middle
school. And I had physically saw it go
up cuz I would go to work there every
day. And I physically saw it demolish
it, build it up. Looks like a college
campus. Now, again, when we are talking
about projects such as that, right? How
can we turn around and get something a
mindset of along that
here in the city of Temple Hill. Because
if I go and show you my my schools, you
would think that that's the county jail.
But it's
I think the biggest part is the people
communicating. So, I know John the
former as well.
He meets with his school superintendent
every week.
They meet weekly. So, it's not like your
school board does their own thing. The
town does their own thing, but if they
don't collaborate and work together, So,
he's the type person he wants to
collaborate. And so, he had the entire
school board connected.
And so, it's the elected officials, he's
the mayor,
and the school board people, they're all
together. This is what we're doing
that's best for our community, and it's
working. And so,
when it's fractured and it's like the
school board does their own thing and
the town does their own thing and
they're not talking to each other,
it's not as good. It's It's better if
you Yeah, I just answered that. And I
think some people just assume that those
relationships or partnerships aren't
happening, but those relationships and
partnerships, they do happen. The The
conversations are there in our
conference rooms and things like that.
So, we It It does happen, but I just
think here if certain people aren't at
the table, they just believe that it's
not happening. And they just believe
that, you know, what we're elected to
do, we're not doing our job because they
don't see it.
I I I go up to the school board
I go up to the school board every other
week.
But every other week I'll give them I'm
talking about conversation.
a number of these things.
>> Even even in my my town of Longshot
where I was mayor, my administrator
would meet with our school administrator
every week. We did collaborative
[clears throat] stuff and we did all the
planning for all the school property. We
and our town did the playgrounds and
stuff together in the baseball more
fields.
Uh it it helps because you can save a
lot of money if you work together like
that.
From what I was reading a while back
again under the power program um
Governor Murphy stated in reference to
uh
a certain location
that might be a real valuable location
in your town
that wasn't one of the sites under a
place of needing development that
Governor Murphy was stating when they
started this power program was a site to
get a power program.
Can you help me out with that one?
It it's
it's supposed to be an area in need of
redevelopment which like in that first
slide I had is a blighted area where you
it's not conducive to live or work.
So I'll give you a different example. I
I got a call from Chatham.
Chatham is a very upscale community that
has a train line that goes right into
New York City.
It's uh
It's Morris Morris County I think
Chatham.
It's Morris County. I go up to the
mayor. He's like, "Oh yeah, the
developer wants a pilot agreement to
redevelop this property next to our
train station."
That's the most valuable property in
your town. It doesn't need any pilot
agreement.
It doesn't need any incentive.
I'll get you 20 other developers that
will develop right there. But the city
of Pleasantville went ahead years ago in
their master plan and and deemed the
entire city in need of redevelopment. So
even our most valuable waterfront
property is deemed in need of
redevelopment.
That's how it happened. Every every inch
of the city is deemed in Well, only the
park has been 25 to 30 years since
they they've initiated some type of
movement over there and has not
happened. So, other than our park, what
what That doesn't mean it I'm just
saying other than our park over there,
what else has happened?
So, if you if you want to look at it, we
we have to understand that if
something's sitting there and almost
blighted, that's what that school's been
talking about. What what
We understand it's that approximately to
the water. But, all of West New York
City it's approximately to the water.
You're going to tell me that that Yeah,
it's valuable, but what does it look
like? I would like to I would like you
to finish what you were speaking of.
What was the ending on that? As far as
that town
wanted the pilot program, so did they
get it or they didn't get
They didn't They didn't meet the
criteria.
So, so the criteria is what we're
speaking of here. Uh we we have a a site
that's one of the most valuable sites
and it is waterfront. And like the
as Laura said, it's been sitting for 25
years. So, that necessarily says that
it's in need of redevelopment to fit the
category of area that needs
redevelopment because nobody has
developed the property.
I just believe what you got, man. That's
It's it's it's it's open to your
opinion. Like I said, like buying the 44
acres over there and
But, you have to designate it for the
area
in order to move forward and find a
developer. So, like they said, the whole
city's being redeveloped. Is it is is it
meets the criteria? It's open for But,
whether whether But, whether it's
designated as an element of area in need
of redevelopment or not, it's still what
happens is dependent on the agreements
you make. True. No matter how it's
designated, what happens is dependent on
the agreements you make.
between the developer and the city. Hold
on. Before you talk to the developer,
before it gets to Right, right, right.
>> Well, that's the regardless of that
point I'm saying it's still Yeah, it
will happen if it's in the language of
the actual agreements. Right. You get
me? Yeah.
Thank you. All right. Thank you
everybody. All right. Thank you very
much, sir. Have a great weekend.
[applause]
There's coffee [cheering] and donuts in
the back for anyone who wants some.
>> [music]
[music]