Princeton Council approves 30-year PILOT financial agreement with AvalonBay for Thanet property
The Princeton Council voted unanimously on Monday night to approve an ordinance authorizing a payment in lieu of taxes financial agreement with apartment developer AvalonBay for a new 220-apartment complex that will be build at Thanet Circle. The development will include 11 affordable apartment units.
AvalonBay entered into a contract to puchase 100 and 101 Thanet, a former 110,000-square-foot office site, in 2019. AvalonBay will subdivide a 2.5-acre parcel at the 15-acre site and give it to Princeton for an age-restricted affordable housing development.
Under the PILOT agreement, AvalonBay will be exempt from paying taxes for the land and the improvements for 30 years. AvalonBay will instead pay the town an “annual service charge” or payment in lieu of taxes. In New Jersey, PILOT payments go into municipal coffers, with five percent going to the county, and no funding going to the school district. The municipality can choose to give the school district a portion of the PILOT payments.
For the first 10 years of the agreement, AvalonBay will pay the municipality an annual service charge of 11% of annual gross revenue.
For the following five years, the annual payment will be equal to 11% of annual gross revenue or 20% percent of the amount of the taxes otherwise due on the value of the property and the Improvements, whichever is greater.
For the following five years after that, the annual payment will be equal to 11% of annual gross revenue or 40% percent of the amount of the taxes otherwise due on the value of the property and the Improvements, whichever is greater.
From the first day after the twentieth anniversary of the annual service charge, the annual payment will be equal to 11% of annual gross revenue or 60% percent of the amount of the taxes otherwise due on the value of the property and the Improvements, whichever is greater.
For the final five years of the 30-year agreement, the annual payment will be equal to 11% of annual gross revenue or 80% percent of the amount of the taxes otherwise due on the value of the property and the Improvements, whichever is greater.
The owners of the Thanet site paid just over $150,000 in property taxes for the site in 2020. The assessment for the site was slashed from about $10.2 million to $6.5 million after the property was sold to a New Jersey real estate group.
According to property tax records, AvalonBay paid $1.6 million in property taxes in 2020 for the company’s apartment complex on Witherspoon Street, which is a 9-acre site that includes 280 units. Fifty-six of the units are affordable.
In the February 2020 application for tax exemption, AvalonBay estimated that the annual gross revenue for the Thanet project would be about $7.3 million, with the annual revenue for each market-rate unit being $34,121. The estimated annual PILOT payment is $801,579.
Krystal Knapp is the founding editor of Planet Princeton. Follow her on Twitter @krystalknapp. She can be reached via email at editor AT planetprinceton.com. Send all letters to the editor and press releases to that email address.
200 additional apartments, but the school district won’t receive any money for 30 years for those students?
And on Tuesday night, the Council voted for the AND plan for the Shopping Center that xould also remove the Shopping Center from the tax rolls. The town expects to break even with the PILOT payment from the Shopping Center, but the school district will probably lose quite a bit of yearly revenue.
Does the town council care about the taxpayers as school taxes on taxpayers will be increasing to make up the lost revenue? These projects are not helping the taxpayer, despite what the Council keeps saying. I would like to see an actual financial estimate, on paper, on what the financial outlook is going to be for the average taxpayer.
Well said. I’m not voting for any of these sitting council member, including the mayor if they don’t give the school a reasonable allocation.
LOL the mayor ran unopposed and the two people running for council are running unopposed. The PCDO machine does what it can to discourage people from running and would love for all races to be uncontested. Time to bring nonpartisan government to Princeton, but the machine will fight against it.
It is shameful that the council didn’t include the school district in the PILOT conversations. The council has not shown themselves to be masterful deal makers. Their short- sightedness will impact the school district for decades.
Interesting. We all want lower taxes, and then you have this. Can I be enrolled in ‘voluntary’ tax payment plan please?
By looking at the direction this administration is going, we are going to ‘pay our fair share’!
The average property tax for a homeowner in Princeton is now more than $19,000. What will these PILOTS do to our property taxes? What exactly is the goal of the council people and the mayor and who exactly benefits? Why would the government not require tax payments from anyone with money in the town – Avalon Bay, Edens, Princeton University, The Institute for Advanced Study… The town is basically run in such a way that all the companies and most profitable non-profits, which are also essentially for profit companies don’t pay their fair share of taxes… Is the goal to turn the town into McMansions of finance and Pharma folks and Plastic Surgeons who only live there while their children are in the underfunded, overcrowded public schools? How do you build a community when you just tax and tax regular people but not companies and no the alleged nonprofits who make all the money… What really is the strategy here and with the Shopping Center and why so many handouts to very wealthy developers… like why not charge the wealthy their fair share? What is the goal with these policies? If the goal is to make sure that only a certain type of person can live in the town for only a certain period of time, it would be good to be more clear about that with folks… Like hey my name is XXX and my goal is to make sure that no regular people can live in the town I sit on council for? The strategy here is not clear… Like who is running the convo and for whom and why?