New Jersey law provides that towns with areas designated “in need of redevelopment” may consider a Payment In Lieu Of Taxes (PILOT) arrangement with a redeveloper. The goal is to attract redevelopment that otherwise would not likely occur in a blighted area.
How is a PILOT established?
The municipality and the redeveloper negotiate the terms of a PILOT within parameters defined in the state statute. The PILOT is then adopted by the town as an ordinance. As with all ordinances, there is a first reading at a council meeting, followed by a public hearing and a vote at a subsequent meeting.
PILOTs are common for large redevelopment projects in New Jersey. They are not common in Hunterdon County due to our rural nature. We already have one PILOT, though, at the Herman E. Kapp Center at 62 Church St.