West Orange Mayor: No PILOT For Essex Green Shopping Center

WEST ORANGE, NJ — The owners of the Essex Green Shopping Center won't be seeking a PILOT agreement as they proceed with a large-scale renovation project, according to West Orange Mayor Robert Parisi.

Earlier this week, Parisi reported that CLPF-Essex Green LLC, owner of the shopping center, isn't asking for a a payment in lieu of taxes (PILOT) to redevelop the property, which the Town Council recently designated as an "area in need of redevelopment.”

“This is a major success for the community,” he said.

PILOT agreements – also known as tax abatements – are deals that enables a developer to switch their standard tax payments for a property with a fixed, yearly payment to a municipality. Some officials have lauded the agreements as useful tools to attract development to distressed or blighted areas of town. But their use has also drawn criticism that the deals can enable a big developer to skip out on paying their fair portion of property taxes. (Learn more about PILOTs here)

After Clarion Partners purchased the shopping center in 2016 for $97 million as part of "one of the largest retail sales in New Jersey in the last two years," developers announced plans for a large facelift at the property, citing a double-digit vacancy rate among its tenants.

The shopping center has seen a mix of national, regional and local tenants, including ShopRite, Macy's Backstage, an AMC Theatre with dine-in service, Total Wine & More, Sears Appliance/Outlet, Petco, TGI Fridays, Panera Bread, GameStop and GNC.

In January, the West Orange Town Council approved a resolution designating the shopping center and an adjacent office park on Executive Drive owned by North Haledon-based PAG Investments as an "area in need of redevelopment.”

The designation - which is intended to help cities fight urban blight - allows a municipality to issue redevelopment area bonds and tax abatements to encourage developers to invest in and develop the "blighted" areas.

• See related article: Essex Green Redevelopment Gets Key Vote From West Orange Council
• See related article: Does Essex Green In West Orange Need 'Redevelopment?'

Not all West Orange residents have been enthusiastic about the idea of a tax deal for Essex Green, however.

"I was disappointed that the rest of the council voted to create an area in need of redevelopment that falls so clearly short of meeting the requirements of the state law," Councilman Joe Krakoviak said after providing the lone dissenting vote against the designation in January.

"In contrast to the law's intent of helping areas that can't attract private capital, the owners recently paid nearly $117 million," Krakoviak charged. "This action opens the Pandora's Box for the mayor to offer tax abatements that will likely further enrich wealthy real estate developers at the expense of taxpayers. Without these multi-million-dollar 'incentives,' the owners would still spend more of their money to protect and maximize the return from their substantial investment."

In April, one of New Jersey's largest labor unions, 32BJ SEIU, blasted the idea of offering developers a PILOT as "unnecessary tax cuts to a wealthy company at the expense of township residents."

• See related article: No Tax Cuts For Wealthy Company In West Orange, Union Demands

An online petition titled "Say no to the taxpayer subsidy of Essex Green Shopping Center" has gathered 317 signatures as of Aug. 30. (Article continues below video)

ESSEX GREEN: PILOT OR NOT?

As part of an Aug. 29 news release trumpeting the newest turn regarding Essex Green, Parisi emphasized that there will be “no tax abatements” for the property… with “no” written in boldface type.

“Redevelopment worked,” the mayor wrote. “The township has a seat at the table and was able to obtain significant investment in the center with no tax abatements."

Parisi said that Essex Green ownership may be considering leases with “new specialty fitness and restaurant uses," and will not be seeking to add residential units to the property.

According to Parisi:

“Ownership has indicated that it will meet with the Eagle Ridge Condominium Association and other neighboring communities and apply to the Township Zoning Board of Adjustment seeking approval to add approximately 45,000 additional square feet of retail space at the center… No approval for a residential component will be sought at this time.”

The proposed upgrades at Essex Green will go before the Zoning Board of Adjustment in the autumn, when full consideration of all issues will occur, the mayor said.

When asked to comment on the mayor's press release, Krakoviak offered Patch the following statement:

“This is the worst attempt at spin I’ve seen in my 35 years in journalism and PR. But it illustrates a great win-win for West Orange, as the community will benefit from these improvements to Essex Green without taxpayers forfeiting millions of dollars in property tax revenue.”

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