At this week’s Evesham Council meeting, a resident raised concerns over the PILOT for a portion of the Renaissance Square development.
Evesham Township officials have once again publicly defended the township’s use of the state’s Payment In Lieu of Taxes program in recent years as a factor in the township’s recent economic redevelopment.
Officials discussed PILOTs at last week’s Evesham Township Council meeting in response to a resident who brought forward concerns about the township’s 20-year PILOT agreement for a portion of the Shoppes and Residences at Renaissance Square development on Route 70.
PILOT agreements allow municipalities to enter into financial agreements with developers where municipalities seek to spur redevelopment by agreeing to forgo collecting full property taxes on a property for a number of years.
Instead, municipalities usually agree to a multi-year phase-in of a property’s full tax bill, or municipalities agree to collect a percentage of the annual gross revenue generated by a redeveloped property for a set period of time.
In the case of the Shoppes and Residences at Renaissance Square, formerly known as Tri-Towne Plaza, the township approved a PILOT agreement in August with project owner and developer Evesham Owner Urban Renewal, LLC.
Through the agreement, the township will collect a percentage of the gross revenue of newly constructed buildings at the site through increasing increments during the next 20 years.
Buildings that already exist on the site from the former Tri-Towne Plaza are not subject to the PILOT agreement and will be taxed through the township’s standard method of assessment.
However, unlike the standard property tax collection process, taxing entities such as school districts or fire districts are not entitled to funds gained from a PILOT agreement.
Legally, only municipalities are required to receive any money from a property through PILOT agreements, outside of 5 percent of funds to be set aside for the county in which the property is located.
With the Evesham Township School District, Lenape Regional High School District and Evesham Township Fire District not receiving funds from recent PILOTs in town, resident Mike Carroll spoke before council at last week’s meeting to ask the township to consider what he described as a more equitable sharing arrangement concerning the 20-year agreement at Renaissance Square.
“Some of these apartment properties are certainly going to generate children for the school district, and I would just urge the council to consider whether it makes sense for these longer-term PILOTs and to consider a more equitable sharing arrangement where the township isn’t getting 95 percent of the service charge and the school district and the fire district are essentially getting a 30 or 40 percent cut because they’re no longer getting taxes,” Carroll said.
However, Mayor Randy Brown pointed to PILOT agreements as spurring development that eventually benefits taxing entities such as the school districts.
Brown referenced the PILOT agreement with the Marlton Gateway Apartments at the site of the township’s former municipal building on Main Street, which was previously owned by the municipality and sat vacant for about 15 years before the township entered into a five-year PILOT with a developer.
While the school district and fire district have not yet realized money from that property, which officials say is assessed somewhere between $7 million to $8 million, officials expect the property to bring revenues of more than $170,000 in 2019 under the current tax rate, which would be split between all taxing entities in town.
Officials also said they believe the property has never had more than one or two school-aged children living there at one time.
“You have a property that has maybe one school-aged child, but meanwhile, now when that five-year PILOT is over, you got $7 million in value where 65 percent of that money is going to go to the school district … should the school district give us the money back because there are no children coming out of Gateway apartments?” Brown questioned.
Councilman Ken D’Andrea also noted that when the township was dealing with loss of revenue due to tax appeals as a result of the economic recession, it was the township that had to make up the difference for any settlements while other tax entities were not forced to return any monies.
“The township is left holding the bag for the most part,” D’Andrea said.
Evesham Township Manager Tom Czerniecki also noted the township’s fire district has never asked the township for any money generated from a PILOT agreement.
During the meeting, council also approved a new five-year PILOT with the developer of a new, three-story medical office to be constructed at the site of the former Olga’s Diner that sat at the former Marlton Circle where Route 70 meets Route 73.
